BayCom Corp

Previous wording

our geographic footprint, which now includes the San Francisco Bay area, the metropolitan markets of Los Angeles, California; Seattle, Washington; Denver, Colorado; and Las Vegas, Nevada, and community markets including Albuquerque, New Mexico, and Custer, Delta, and Grand Counties, Colorado, provides us access to low cost, stable core deposits in community markets that we can use to fund commercial loan growth. We strive to provide an enhanced banking experience for our clients by providing them with a comprehensive suite of sophisticated banking products and services tailored to meet their needs, while delivering the high-quality, relationship-based client service of a community bank. At June 30, 2025, on a consolidated basis, the Company had approximately $2.6 billion in total assets, $2.0 billion in total loans, $2.2 billion in total deposits and $330.6 million in shareholders’ equity.

Current wording

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

Previous wording

Wecontinue to focus on growing our commercial loan portfolios through acquisitions as well as organic growth. At June 30, 2025, our$2.0 billion total loan portfolio included $261.5 million, or 13.1%, of loans acquired through business combinations (all of which were recorded to their estimated fair values at the time of acquisition), and the remaining $1.7 billion, or 86.9%, consisted of loans we originated or purchased not as part of a business combination.

Current wording

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

Previous wording

Changes in market interest rates, the slope of the yield curve, and interest we earn on interest earning assets or pay on interest bearing liabilities, as well as the volume and composition of interest earning assets, interest bearing and noninterest bearing liabilities, and shareholders’ equity, usually have the most significant impact on our net interest spread, net interest margin and net interest income during a reporting period. During the second half of 2024, the Federal Open Market Committee (“FOMC”) of the Federal Reserve lowered the target range for the federal funds rate three times, resulting in a target range of 4.25% to 4.50%, which is where it remained at June 30, 2025.

Current wording

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

Previous wording

For investments, the Company evaluates available-for-sale debt securities in an unrealized loss position to determine whether the decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors. Such situations may result from either a decline in the financial condition of the issuing entity or, in the case of fixed interest rate investments, from rising interest rates. In making this assessment, management considers the

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Total assets. Total assets decreased $42.1 million, or 1.6%, to $2.6 billion at June 30, 2025, from December 31, 2024. The decrease primarily was due to a $72.4 million, or 19.9%, decline in cash and cash equivalents and a $2.2 million, or 100%, decline in loans held for sale, partially offset by a $47.4 million, or 2.4%, increase in loans receivable, net.

Current wording

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

Previous wording

Cash and cash equivalents. Cash and cash equivalents decreased $72.4 million, or 19.9%, to $291.6 million at June 30, 2025, from $364.0 million at December 31, 2024. The decrease primarily was due to a $71.0 million decrease in federal funds sold and interest bearing balances in banks, as excess funds were used to fund loan growth and deposit withdrawals.

Current wording

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

Previous wording

Investment securities available-for-sale. Investment securities available-for-sale decreased $8.6 million, or 4.5%, to $184.7 million at June 30, 2025 from $193.3 million at December 31, 2024. The decrease was primarily attributable to routine maturities, principal repayments, and calls of investment securities, partially offset by purchases of investment securities and an upward fair value adjustment related to unrealized gains on investment securities available-for-sale.

Current wording

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

Previous wording

Equity securities. Equity securities decreased $255,000, or 1.9%, to $12.9 million at June 30, 2025 from $13.1 million at December 31, 2024, primarily due to mark-to-market downward adjustments recorded during the six months ended June 30, 2025.

Current wording

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

Previous wording

Loans receivable, net. We originate a wide variety of loans with a focus on commercial real estate (“CRE”) loans and commercial and industrial loans. Total loans increased $47.4 million, or 2.4%, to $2.0 billion at June 30, 2025 from $1.9 billion at December 31, 2024. The increase was due to $227.2 million of new loan originations and $20.6 million of loan purchases, partially offset by $199.8 million of loan repayments and $3.4 million of loans sold.

Current wording

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

Previous wording

Acquired loans. As of June 30, 2025, our total loan portfolio included $261.5 million, or 13.1%, of loans acquired through business combinations (all of which were recorded at their estimated fair values as of the time of acquisition), of which $128.3 million had no remaining net premium or discount.

Current wording

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

Previous wording

As of June 30, 2025, acquired non-PCD loans totaled $123.5 million, with a remaining net premium of $1.6 million, compared to $140.6 million with a remaining net premium of $1.8 million as of December 31, 2024. The net premium for acquired non-PCD loans includes a credit discount based on estimated losses in the acquired loans, partially offset by any premium based on market interest rates on the date of acquisition.

Current wording

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

Previous wording

As of June 30, 2025, acquired PCD loans totaled $18.0 million, with a remaining net non-credit discount of $1.3 million, compared to $24.0 million with a remaining net non-credit discount of $1.5 million as of December 31, 2024.

Current wording

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

Previous wording

Nonperforming assets and loans. Nonperforming assets generally consist of nonperforming loans and other real estate owned (“OREO”). Nonperforming loans include nonaccrual loans and accruing loans 90 days or more past due. Nonperforming assets increased $6.9 million to $16.4 million, or 0.82% of total loans, at June 30, 2025, compared to $9.5 million, or 0.48% of total loans, at December 31, 2024. The Company also held no OREO at either date.

Current wording

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

Previous wording

Nonperforming loans totaled $16.4 million, or 0.82% of total loans, at June 30, 2025, compared to $9.5 million, or 0.48% of total loans, at December 31, 2024. The increase in nonperforming loans was primarily due to seven new commercial real estate loans (secured by various types of real estate) totaling $5.2 million being placed on nonaccrual status during the six months ended June 30, 2025, and a $2.8 million increase in loans 90 days or more past due and still accruing, which were in the process of collection. These increases were partially offset by payoffs of four nonaccrual loans totaling $1.9 million and one fully charged off nonaccrual loan of $105,000. The rise in nonperforming loans reflects elevated credit risk primarily within the commercial and industrial and commercial real estate portfolios. At June 30, 2025, nonaccrual loans included $599,000 of loans 30–89 days past due and $5.3 million of loans less than 30 days past due. The $5.3 million of nonaccrual loans less than 30 days past due consisted of 16 loans, all of which were placed on nonaccrual due to borrower-specific financial concerns rather than delinquency. At December 31, 2024, nonaccrual loans included $643,000 of loans 30–89 days past due and no loans less than 30 days past due.

Current wording

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

Previous wording

Of the nonperforming loans at June 30, 2025, approximately $610,000 were guaranteed by governmental agencies, compared to $2.0 million at December 31, 2024. The decrease in government-guaranteed nonaccrual loans reflects the runoff of previously guaranteed balances without comparable additions during the current six-month period.

Current wording

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

Previous wording

Modified loans to borrowers experiencing financial difficulty as of June 30, 2025 and December 31, 2024, totaled $2.4 million and $2.7 million, respectively. All such modified loans were on nonaccrual status as of each respective reporting date. Modified loans that are accruing and performing in accordance with their modified terms are not classified as nonperforming loans, as they continue to accrue interest and demonstrate satisfactory payment performance despite their modified terms. There were no such modified loans at June 30, 2025 and December 31, 2024. The related allowance for credit losses on individually evaluated modified loans was none and $24,000 at June 30, 2025 and December 31, 2024, respectively.

Current wording

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

Previous wording

Interest foregone on nonaccrual loans was approximately $370,000 and $639,000 for the three and six months ended June 30, 2025, compared to $226,000 and $709,000 for the three and six months ended June 30, 2024. Interest income recognized on nonaccrual loans was approximately $31,000 and $66,000 for the three and six months ended June 30, 2025, and $79,000 and $86,000 for the three and six months ended June 30, 2024, respectively.

Current wording

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

Previous wording

losses based on three categories: (i) originated loans, (ii) acquired non-PCD loans, and (iii) acquired PCD loans. The allowance for credit losses reflects management’s estimate of current expected credit losses inherent in the loan portfolios. The computation includes elements of judgment and high levels of subjectivity.

Current wording

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

Previous wording

At June 30, 2025, the Company’s allowance for credit losses for loans was $18.7 million, or 0.94% of total loans, compared to $17.9 million, or 0.92% of total loans, at December 31, 2024. Management currently believes that the $18.7 million allowance for credit losses at June 30, 2025 is adequate to absorb expected credit losses inherent in the Company’s loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio.

Current wording

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

Previous wording

The increase in the allowance for credit losses at June 30, 2025 as compared to December 31, 2024, was primarily attributable to growth in the loan portfolio, an increase in the reserve for pooled loans, an increase in the reserve for individually evaluated loans, and the replenishment of the allowance during the period. The increase in the reserve for pooled loans reflected changes in portfolio mix, including growth in higher-risk loan categories, changes in the risk level of one qualitative factor, as well as updated historical loss rates and modest changes in forecasted economic conditions. Specifically, the Company incorporated an increase in forecasted national unemployment, partially offset by improvement in projected national gross domestic product (“GDP”) at June 30, 2025, as compared to December 31, 2024. Both of these are key economic indicators used in estimating expected credit losses under the current expected credit loss, or CECL, model.

Current wording

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

Previous wording

As of June 30, 2025, the Company individually evaluated $18.2 million in loans, inclusive of the $13.5 million of nonperforming loans as of that date. Of these individually evaluated loans, $2.3 million had a specific allowance totaling $839,000 million as of June 30, 2025. As of December 31, 2024, the Company individually evaluated $17.4 million in loans, inclusive of the $9.2 million of nonperforming loans as of that date. Of these individually evaluated loans, $2.7 million had a specific allowance totaling $392,000 as of December 31, 2024.

Current wording

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

Previous wording

Management considers the allowance for credit losses for loans at June 30, 2025 to be adequate to cover losses inherent in the loan portfolio based on the assessment of the above-mentioned factors affecting the loan portfolio. While management believes the estimates and assumptions used in its determination of the adequacy of the allowance are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future losses will not exceed the amount of the established allowance for credit losses for loans or that any increased allowance for credit losses for loans that may be required will not adversely impact our financial condition and results of operations. A further decline in national and local economic conditions due to unemployment levels, labor shortages, the effects of inflation, a potential recession, slowed economic growth or otherwise, could result in a material increase in the allowance for credit losses for loans and may adversely affect the Company’s financial condition and results of operations. In addition, the determination of the amount of our allowance for credit losses for loans is subject to review by bank regulators, as part of their routine examination process, which may result in additions to our provision for credit losses based upon their judgment of information available to them at the time of their examination.

Current wording

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

Previous wording

Deposits. Deposits are our primary source of funding and generally consist of core deposits from the communities served by our branch and office locations. We offer a variety of deposit accounts with a competitive range of interest rates and terms to both consumers and businesses. Deposits include interest bearing and noninterest bearing demand accounts, savings accounts, money market accounts, certificates of deposit and individual retirement accounts. These accounts earn interest at rates established by management based on competitive market factors, management’s desire to increase certain product types or maturities, and in keeping with our asset/liability, liquidity and profitability objectives. Competitive products, competitive pricing and high touch client service are important to attracting and retaining these deposits.

Current wording

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

Previous wording

Total deposits decreased $47.4 million, or 2.1%, to $2.2 billion at June 30, 2025, compared to $2.2 billion at December 31, 2024. At June 30, 2025, noninterest-bearing demand deposits totaled $616.1 million, or 28.2% of total deposits, compared to $689.0 million, or 30.8% of total deposits, at December 31, 2024, representing a decrease of $72.9 million. Time deposits increased $432,000, while higher-costing money market accounts and lower-costing NOW and savings accounts increased $13.5 million and $11.6 million, respectively, from December 31, 2024 to June 30, 2025. Time deposits included no brokered deposits as of June 30, 2025, compared to $35.5 million of brokered deposits at December 31, 2024. The decline in total deposits compared to December 31, 2024, primarily reflects a reduction in noninterest-bearing demand deposits, partially offset by growth in interest-bearing NOW and money market accounts. The shift in deposit composition reflects continued customer migration toward interest-bearing products in response to the prevailing rate environment. The decrease in brokered time deposits also contributed to the overall decline in deposit balances. Management continues to monitor deposit mix and pricing strategies in the context of funding cost, liquidity needs, and interest rate risk.

Current wording

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

Previous wording

We consider our deposit base to be seasoned, stable and well-diversified, and we do not have any significant industry concentrations among our non-insured deposits. We also offer an insured cash sweep product (ICS) that allows customers to insure deposits above FDIC insurance limits. At June 30, 2025, our average deposit account size (excluding public funds), calculated by dividing period-end deposits by the population of accounts with balances, was approximately $61,000. See “Note 17 – Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q for information regarding our top ten depositors.

Current wording

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

Previous wording

At June 30, 2025 and December 31, 2024, we had the ability to borrow up to $581.6 million and $540.2 million, respectively, from the FHLB of San Francisco. At both June 30, 2025 and December 31, 2024, there were no FHLB advances outstanding.

Current wording

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

Previous wording

The Bank has been approved for discount window advances from the FRB of San Francisco secured by certain types of loans. At June 30, 2025 and December 31, 2024, we had the ability to borrow up to $440.3 million and $41.9 million, respectively, from the FRB of San Francisco. At both June 30, 2025 and December 31, 2024, we hadno FRB of San Francisco advances outstanding.

Current wording

The Bank has been approved for discount window advances from the FRB of San Francisco secured by certain types of loans. At September 30, 2025 and December 31, 2024, we had the ability to borrow up to $43.4 million and

Previous wording

At June 30, 2025, the Company had outstanding subordinated debt, net of costs to issue, totaling $63.8 million compared to $63.7 million at December 31, 2024.

Current wording

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

Previous wording

Shareholders’ equity. Shareholders’ equity increased $6.2 million, to $330.6 million at June 30, 2025 from $324.4 million at December 31,2024. The increase in shareholders’ equity primarily was due to $12.1 million of net income earned during the first six months of 2025 and $2.9 million in other comprehensive income, net of taxes, which primarily reflected changs in the unrealized gain on available-for-sale securities. These increases were partially offset by the repurchase of $5.2 million of Company common stock and $3.9 million of cash dividends paid or accrued during the period. During the six months ended June 30, 2025, the Company repurchased a total of 199,243 shares of its common stock at a total cost of $5.2 million and an average price of $25.06 per share, leaving 264,855 shares available for future

Current wording

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

Previous wording

Comparison of Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Current wording

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

Previous wording

Earnings summary. Net income was $6.4 million for the three months ended June 30, 2025, compared to $5.6 million for the three months ended June 30, 2024, an increase of $764,000 or 13.6%. The increase was the result of a $865,000 increase in net interest income, a $258,000 decrease in noninterest expense, and a $30,000 increase in noninterest income, partially offset by a $357,000 increase in provision for income taxes and a $32,000 increase in provision for credit losses. Basic and diluted earnings per share were $0.58 for the three months ended June 30, 2025, compared to $0.50 for the three months ended June 30, 2024.

Current wording

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

Previous wording

Net income was $12.1 million for the six months ended June 30, 2025, compared to $11.5 million for the six months ended June 30, 2024, an increase of $589,000 or 5.1%. The increase was the result of a $1.4 million increase in net interest income and a $340,000 decrease in noninterest expense, partially offset by a $592,000 decrease in noninterest income, a $422,000 increase in provision for credit losses, and a $75,000 increase in provision for income taxes. Basic anddiluted earnings per share were $1.09 for the six months ended June 30, 2025, compared to $1.01 for the six months ended June 30, 2024.

Current wording

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

Previous wording

Our efficiency ratio, which is calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income, was 63.85% and 64.79% for the three and six months ended June 30, 2025, compared to 67.34% and 66.49% for the three and six months ended June 30, 2024, respectively. The improvement in the efficiency ratio for the three-month period was primarily driven by higher net interest income and a modest reduction in noninterest expense. For the six-month period, the improvement was due to a decrease in noninterest expense and a slight increase in total revenue, as higher net interest income more than offset a decline in noninterest income.

Current wording

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

Previous wording

Interest income. Interest income for the three months ended June 30, 2025 was $33.5 million, compared to $32.4 million for the three months ended June 30, 2024, an increase of $1.1 million or 3.2%. Increased yields earned on interest-earning assets, along with an increase in the average balances of investment securities and loans, were the primary drivers of the increase in interest income, partially offset by a decrease in the average balance of and yield on fed funds sold and interest bearing balances in banks.

Current wording

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

Previous wording

Interest income on loans, including fees, increased $2.9 million, or 11.8%, to $28.0 million for the three months ended June 30, 2025 from $25.0 million for the three months ended June 30, 2024, due to a $133.4 million increase in the average balance of loans and a 22 basis point increase in the average loan yield. The average balance of loans was $2.0 billion for the second quarter of 2025, compared to $1.9 billion for second quarter of 2024. The average yield on loans was 5.63% for the three months ended June 30, 2025, compared to 5.41% for the second quarter of 2024. The increase in the average yield on loans during the current quarter, compared to the second quarter of 2024 was due to the impact of increased rates on variable rate loans, as well as new loans being originated at higher market interest rates.

Current wording

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

Previous wording

Interest income on loans for the three months ended June 30, 2025 and 2024 included $110,000 and $124,000 in accretion of the net discount on acquired loans and revenue from PCD loans in excess of discounts. Remaining net discounts on these acquired loans totaled $319,000 and $540,000 at June 30, 2025 and 2024, respectively. Interest income on loans for the three months ended June 30, 2025 and 2024, included $109,000 and $70,000, respectively, in fees related to prepayment penalties.

Current wording

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

Previous wording

Interest income on investment securities increased $225,000, or 10.3%, to $2.4 million for the three months ended June 30, 2025, compared to $2.2 million for the three months ended June 30, 2024, as a result of increases in the average yield and average balance. The average yield on investment securities increased 18 basis points to 4.68% for the three months ended June 30, 2025, compared to 4.50% for the three months ended June 30, 2024. The increase in average yield was due to higher market interest rates on newly purchased securities and rate resets on variable rate investment securities. The average balance of investment securities totaled $206.5 million for the three months ended June 30, 2025, compared to $195.1 million for the three months ended June 30, 2024. In addition, during the second quarter of 2025, we received $392,000 in cash dividends on our FRB and FHLB stock, unchanged from the second quarter of 2024.

Current wording

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

Previous wording

Interest income on federal funds sold and interest-bearing balances in banks decreased $2.1 million, or 44.1%, to $2.7 million for the three months ended June 30, 2025, compared to $4.8 million for the three months ended June 30, 2024, as a result of changes in the average yield and average balance. The average yield decreased 102 basis points to 4.45% for the three months ended June 30, 2025, compared to 5.47% for the three months ended June 30, 2024, reflecting the Federal Reserve’s rate reductions during the second half of 2024. The average balance of federal funds sold and interest-bearing balance in banks totaled $242.8 million and $354.3 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

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