What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-09 compared with 2024-11-12 · 210 added, 258 removed, 620 unchanged (43% of the section changed)

9 unchanged sentences

(In thousands, except for share data)

September 30,

Cash due from banks

2 unchanged sentences

Time deposits in banks

Investment securities available-for-sale ("AFS"), at fair value, net of allowance for credit losses of $ 0 at both September 30, 2024 and December 31, 2023

Investment securities available-for-sale ("AFS"), at fair value, net of allowance for credit losses of $ 0 at both March 31, 2025 and December 31, 2024

Equity securities, at fair value

2 unchanged sentences

Loans held for sale

Loans, net of allowance for credit losses of $ 18,310 at September 30, 2024 and $ 22,000 at December 31, 2023

Loans, net of allowance for credit losses of $ 18,500 at March 31, 2025 and $ 17,900 at December 31, 2024

Premises and equipment, net

15 unchanged sentences

10,000,000 shares authorized;

no shares issued and outstanding at both September 30, 2024 and December 31, 2023

no shares issued and outstanding at both March 31, 2025 and December 31, 2024

Common stock, no par value;

100,000,000 shares authorized;

11,130,372 and 11,551,271 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

11,089,682 and 11,121,475 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid in capital

8 unchanged sentences

Three months ended

Nine months ended

September 30,

Interest income:

10 unchanged sentences

Net interest income

Provision for (reversal of) credit losses

Net interest income after provision for (reversal of) credit losses

Provision for credit losses

Net interest income after provision for credit losses

Noninterest income:

Gain on sale of loans

Gain (loss) on equity securities

(Loss) gain on equity securities

Service charges and other fees

Loan servicing and other loan fees

(Loss) income on investment in Small Business Investment Company (“SBIC”) fund

Loss on investment in Small Business Investment Company (“SBIC”) fund

Other income and fees

18 unchanged sentences

Three months ended

Nine months ended

September 30,

Other comprehensive income (loss):

Change in unrealized gain (loss) on AFS securities

Deferred tax (expense) benefit

Other comprehensive income (loss), net of tax

Other comprehensive income:

Change in unrealized gain on AFS securities

Deferred tax expense

Other comprehensive income, net of tax

Total comprehensive income

6 unchanged sentences

Income/(Loss)

Three months ended September 30, 2024

Balance, July 1, 2024

Three months ended March 31, 2025

Balance, December 31, 2024

Other comprehensive income, net

Restricted stock granted

Cash dividends of $ 0.10 per share

Stock based compensation

Repurchase of shares

Balance, September 30, 2024

Three months ended September 30, 2023

Balance, July 1, 2023

Other comprehensive loss, net

Restricted stock granted

Forfeiture of restricted stock grants

Cash dividends of $ 0.15 per share

1 unchanged sentence

Repurchase of shares

Balance, September 30, 2023

Comprehensive

Shareholders’

Income/(Loss)

Nine months ended September 30, 2024

Balance, January 1, 2024

Balance, March 31, 2025

Three months ended March 31, 2024

Balance, December 31, 2023

Other comprehensive income, net

Restricted stock granted

Forfeiture of restricted stock granted

Cash dividends of $ 0.30 per share

Stock based compensation

Repurchase of shares

Balance, September 30, 2024

Nine months ended September 30, 2023

Balance, January 1, 2023 (As Restated)

Other comprehensive loss, net

Cumulative change from adoption of ASU 2016-13, net of tax

Restricted stock granted

Forfeiture of restricted stock grants

Cash dividends of $ 0.10 per share

1 unchanged sentence

Repurchase of shares

( 1,206,481 )

Balance, September 30, 2023

Balance, March 31, 2024

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Nine months ended

September 30,

Three months ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for (reversal of) credit losses

Deferred tax expense (benefit)

Accretion on acquired loans

Provision for credit losses

Deferred tax expense

Amortization (accretion) on acquired loans

Gain on sale of loans

1 unchanged sentence

Loans originated for sale

Loss on sale of OREO

Accretion on junior subordinated debentures

2 unchanged sentences

Amortization/accretion of premiums/discounts on investment securities, net

(Gain) loss on equity securities

Loss (gain) on equity securities

Depreciation and amortization

1 unchanged sentence

Stock based compensation expense

Decrease in deferred loan origination fees, net

(Decrease) increase in deferred loan origination fees, net

Net change in interest receivable and other assets

Increase in salary continuation plan, net

(Decrease) increase in salary continuation plan, net

Net change in interest payable and other liabilities

4 unchanged sentences

Proceeds from maturities, repayments and calls of investment securities AFS

Purchase of FHLB stock

Purchase of FRB stock

Proceeds from sale of loans

Decrease in loans, net

Purchase of loans

(Increase) decrease in loans, net

Purchase of equipment and leasehold improvements, net

3 unchanged sentences

(In thousands)

Nine months ended

September 30,

Three months ended

Cash flows from financing activities:

Decrease in noninterest and interest bearing deposits in banks, net

Increase in time deposits, net

(Decrease) increase in time deposits, net

Repayment of subordinated debt, net

8 unchanged sentences

Interest expense

Income taxes paid, net

Non-cash investing and financing activities:

Change in unrealized gain (loss) on AFS securities, net of tax

Change in unrealized gain on AFS securities, net of tax

Transfer of loans to held-for-sale

16 unchanged sentences

None of the reclassifications impacted consolidated net income, earnings per share or shareholders’ equity.

Restatement of Previously Issued Consolidated Financial Statements

On July 18, 2023, the audit committee of the Company’s board of directors concluded that the Company’s previously issued unaudited interim consolidated financial statements for the period ended March 31, 2023 and the consolidated financial statements for the year ended December 31, 2022, as well as for the unaudited interim periods included in that fiscal year (collectively, “Restated Periods”), should no longer be relied upon because of errors related to the accounting for unrealized losses on preferred equity securities that resulted in material misstatements of noninterest income and accumulated other comprehensive income.

At the time of its purchase of the preferred equity securities for investment purposes, the Company inappropriately accounted for them as AFS debt securities under Accounting Standards Codification (“ASC”) Topic 320 – Investments-Debt Securities .

As such, the changes in the fair value of these securities were not recorded as part of net income but rather as a component of shareholders’ equity (in accumulated other comprehensive income, net of tax).

However, as a result of subsequent research and third-party consultation, the Company determined that the securities should instead have been accounted for under ASC Topic 321 – Investments-Equity Securities .

The result of this change in classification of the preferred equity securities is that the change in the fair value of the securities each quarter should have been recorded in noninterest income on the consolidated statements of income.

On July 25, 2023, the Company filed amendments to its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, September 30, 2022, June 30, 2022, and March 31, 2022, and its Form 10-K for the year ended December 31, 2022, (the “Original Reports”) with the Securities and Exchange Commission (“SEC”), to reflect the restatement of the Company’s consolidated financial statements for the Restated Periods (the “Amended Form 10-Qs” and the “Amended Form 10-K,” collectively, the “Amended Reports”).

As disclosed in the Original Reports, the Company recorded the change, net of taxes, in the fair value of preferred equity securities as part of other comprehensive loss, net of taxes, under ASC Topic 320 – Investments-Debt Securities rather than as part of non-interest income under ASC Topic 321 – Investments-Equity Securities .

In addition, various footnotes in the Amended Reports reflect the effects of these restatements.

For additional information on the effects of the restatement, see Note 2.

Restatement of Consolidated Financial Statements in the Notes to Consolidated Financial Statements contained in the Amended Form 10-K and Note 3.

Restatement of the Consolidated Financial Statements in the Notes to Condensed Consolidated Financial Statements contained in each of the Amended Form 10-Qs.

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

Accounting Guidance Adopted in 2024

On January 1, 2024, the Company adopted Accounting Standards Update (“ASU”) 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, a consensus of the Emerging Issues Task Force.

ASU 2023-02 allows an entity the option to apply the proportional amortization method of accounting to other equity investments that are made for the primary purpose of receiving tax credits or other income tax benefits if certain conditions are met.

Prior to this ASU, the application of the proportional amortization method of accounting was limited to investments in low-income housing tax credit structures.

The proportional amortization method of accounting results in the amortization of applicable investments, as well as the related income tax credits or other income tax benefits received, being presented on a single line in the statements of income, income tax expense.

Under this ASU, an entity has the option to apply the proportional amortization method of accounting to applicable investments on a tax-credit-program-by-tax-credit program basis.

In addition, the amendments in this ASU require that all tax equity investments accounted for using the proportional amortization method use the delayed equity contribution guidance in paragraph 323-740-25-3, requiring a liability to be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable.

Under this ASU, low-income housing tax credit investments for which the proportional amortization method is not applied can no longer be accounted for using the delayed equity contribution guidance.

Further, this ASU specifies that impairment of low-income housing tax credit investments not accounted for using the equity method must apply the impairment guidance in Subtopic 323-10:

Investments - Equity Method and Joint Ventures - Overall.

This ASU also clarifies that for low-income housing tax credit investments not accounted for under the proportional amortization method or the equity method, an entity shall account for them under Topic 321:

Investments - Equity Securities .

The amendments in the ASU also require additional disclosures in interim and annual periods concerning investments for which the proportional amortization method is applied, including (i) the nature of tax equity investments, and (ii) the effect of tax equity investments and related income tax credits and other income tax benefits on the financial position and results of operations.

ASU 2023-02 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements and related disclosures.

Fair Value Measurement (Topic 820) - In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

The guidance in the ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account on the equity security and, therefore, is not considered in measuring fair value.

The ASU also requires additional disclosures about the restriction.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The adoption of ASU 2022-03 did not have a material impact on the Company's consolidated financial statements and related disclosures.

Accounting Guidance Recently Adopted

Segment Reporting – Improvements to Reportable Segment Disclosures (Topic 280) – In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, enhanced interim disclosure requirements, clarifying circumstances in which an entity can disclose multiple segment measures of profit or loss, providing new segment disclosure requirements for entities with a single reportable segment, and requiring other disclosures.

The amendments are effective for annual reporting periods beginning after December 15, 2023 (i.e., 2024 Form 10-K) and interim periods within fiscal years beginning after December 31, 2024, and must be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

The disclosure requirements of this update did not have a material effect on the Company’s consolidated financial statements.

See Note 18—Segment Information.

Recent Accounting Guidance Not Yet Effective

1 unchanged sentence

Recognition and Initial Measurement.

The guidance requires newly-formed JVs to apply a new basis of accounting to all of its contributed net assets, which results in the JV initially measuring its contributed net assets under ASC 805-20, Business Combinations.

The new guidance would be applied prospectively and is effective for all newly-formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted.

The Company is evaluating the accounting and disclosure requirements of this update and does not expect them to have a material effect on the Company’s consolidated financial statements.

Segment Reporting – Improvements to Reportable Segment Disclosures (Topic 280) – In November 2023, the FASB issued ASU 2023-07 to enhance disclosures about significant segment expenses for public entities reporting segment information under Topic 280.

It requires that a public entity disclose, on an annual and interim basis, significant expense categories for each reportable segment.

Significant expense categories are derived from expenses that are 1) regularly reported to an entity’s chief operating decision-maker ("CODM"), and 2) included in a segment’s reported measure of profit or loss.

The disclosures should include an amount for "other segment items," reflecting the difference between 1) segment revenue less significant segment expenses, and 2) the reportable segment’s profit or loss measures.

It requires that a public entity disclose the title and position of the CODM and how the CODM uses the reported measure of profit or loss to assess segment performance and to allocate resources.

Further it clarifies that entities with a single reportable segment must comply with both new and existing segment reporting requirements.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Entities must adopt the guidance on a retrospective basis.

The guidance requires a newly-formed JV to apply a new basis of accounting to all of its contributed net assets, which results in the JV initially measuring its contributed net assets under ASC 805-20, Business Combinations.

The new guidance would be applied prospectively and is effective for all joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted.

The Company is evaluating the accounting and disclosure requirements of this update and does not expect them to have a material effect on the Company’s consolidated financial statements.

Income Taxes – Improvements to Income Tax Disclosures (Topic 740) – In December 2023, the FASB issued ASU 2023-09 to provide additional transparency into an entity’s income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a certain quantitative threshold.

The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a

certain quantitative threshold.

The amendments also require that entities disclose on an annual basis:

2 unchanged sentences

The Company is evaluating the accounting and disclosure requirements of this update and does not expect them to have a material effect on the Company’s consolidated financial statements.

Reference Rate Reform (Topic 848) - In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2020-04, Reference Rate Reform (Topic 848).

The amendments in this ASU are elective and provide optional guidance for a limited period of time to ease the potential burden of accounting for, or recognizing the effects of, reference rate reform.

The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

The amendments in this ASU may be elected through December 31, 2024 (as amended by ASU No.

2022-06 discussed below).

An entity may elect the amendments in this update for an interim period with adoption methods varying based on transaction type.

We have not elected to apply amendments at this time and will assess the applicability of this ASU to us as we continue to monitor guidance for reference rate reform from FASB and its impact on our financial condition and results of operations.

The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

The objective of the guidance in Topic 848 was to provide temporary relief during the transition period, as noted in the discussion of ASU 2020-04 above, under which the sunset provision was based on an expectation that the LIBOR would cease being published after December 31, 2021.

In March 2021, the UK Financial Conduct Authority announced that the intended cessation date of certain tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848.

Therefore, this amendment deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

NOTE 3 – INVESTMENT SECURITIES

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

September 30, 2024

March 31, 2025

Government Agencies

5 unchanged sentences

December 31, 2024

Government Agencies

Municipal securities

3 unchanged sentences

Corporate bonds

Amortized cost and fair values exclude accrued interest receivable of $ 1.6 million and $ 1.2 million at September 30, 2024 and December 31, 2023, respectively, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

During both the three and nine months ended September 30, 2024 and 2023, the Company sold no securities AFS.

Amortized cost and fair values exclude accrued interest receivable of $ 1.6 million and $ 1.3 million at March 31, 2025 and December 31, 2024, respectively, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

During both the three months ended March 31, 2025 and 2024, the Company sold no securities AFS.

The amortized cost and estimated fair value of securities AFS at the dates indicated by contractual maturity are shown below.

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

Due after ten years

At both September 30, 2024 and December 31, 2023, there were no securities pledged.

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

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

1 unchanged sentence

12 months or more

September 30, 2024

March 31, 2025

Government Agencies

7 unchanged sentences

December 31, 2024

Government Agencies

Municipal securities

3 unchanged sentences

Corporate bonds

At September 30, 2024, the Company held 349 securities AFS, of which 212 were in an unrealized loss position for more than twelve months and 16 were in an unrealized loss position for less than twelve months.

At March 31, 2025, the Company held 332 securities AFS, of which 194 were in an unrealized loss position for more than twelve months and 41 were in an unrealized loss position for less than twelve months.

At December 31, 2024, the Company held 352 investment securities, of which 212 were in an unrealized loss position for more than twelve months and 53 were in an unrealized loss position for less than twelve months.

1 unchanged sentence

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

Securities that were in an unrealized loss position as of September 30, 2024 were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or changes in required yields by investors in these types of securities, among other factors.

Investment debt securities that were in an unrealized loss position as of March 31, 2025 were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or changes in required yields by investors in these types of securities, among other factors.

This assessment first includes a determination of whether the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit losses.

In making this assessment, management considers the nature of the security and any related government guarantees, any changes to the rating of the security by a rating agency, creditworthiness of the issuers/guarantors, the underlying collateral, the financial conditions and prospects of the issuer, and any adverse conditions specifically related to the security, among other factors.

As of September 30, 2024, the Company expects to recover the amortized cost basis of its securities, has no present intent to sell any investment securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses before recovery of their amortized cost and the decline in fair value is largely attributed to changes in interest rates and other market conditions.

The issuers of these securities continue to make timely principal and interest payments.

No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality at September 30, 2024.

As of March 31, 2025, the Company expects to recover the amortized cost basis of its securities, has no present intent to sell any investment securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses before recovery of their amortized cost and the decline in fair value is largely attributed to changes in interest rates and other market conditions.

The issuers of these securities continue to make timely

principal and interest payments.

Equity Securities

The Company recognized a net gain on equity securities of $ 1.4 million and $ 1.7 million for the three and nine months ended September 30, 2024, and recognized a net loss on equity securities of $ 274,000 and $ 2.1 million for the three and nine months ended September 30, 2023, respectively.

Equity securities were $ 14.3 million and $ 12.6 million as of September 30, 2024 and December 31, 2023, respectively.

The Company recognized a net loss on equity securities of $ 255,000 and a net gain of $ 573,000 for the three months ended March 31, 2025 and 2024, respectively.

Equity securities were $ 12.9 million and $ 13.1 million as of March 31, 2025 and December 31, 2024, respectively.

NOTE 4 – LOANS

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

September 30,

Commercial and industrial

3 unchanged sentences

Allowance for credit losses

(1) Includes $ 1.7 million and $ 3.8 million of U.S.

Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans as of September 30, 2024 and December 31, 2023, respectively.

Net loans exclude accrued interest receivable of $ 6.1 million and $ 6.7 million at September 30, 2024 and December 31, 2023, respectively, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

Net loans exclude accrued interest receivable of $ 6.6 million and $ 6.7 million at March 31, 2025 and December 31, 2024, respectively, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

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

and industrial

September 30, 2024

March 31, 2025

Recorded investment in loans individually evaluated:

9 unchanged sentences

Specific allowance on loans individually evaluated

From time to time, the Company may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties.

At the time of restructuring, these loans are generally placed on nonaccrual.

These loans may be returned to accrual status after the borrower demonstrates performance with the modified terms for a sustained period of time (generally six months ) and the capacity to continue to perform in accordance with the modified terms of the restructured debt.

The ACL on a modified loan to a borrower experiencing financial difficulty is measured using the same method as individually evaluated loans.

During the three and nine months ended September 30, 2024 and 2023, there were no modifications of loans to borrowers experiencing financial difficulty.

The Company may modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies.

These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof.

The Company typically does not offer principal forgiveness.

An assessment of whether a borrower is experiencing financial difficulty is made on the date of modification.

The effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses on loans because of the measurement methodologies used to estimate the allowance.

During the three months ended March 31, 2025 and 2024, there were no modifications of loans to borrowers experiencing financial difficulty.

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

loans outstanding

September 30, 2024

March 31, 2025

Commercial and industrial

6 unchanged sentences

Commercial real estate

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

During the three and nine months ended September 30, 2023, the Company recorded no charge-offs for modified loans to borrowers experiencing financial difficulty.

As of September 30, 2024 and December 31, 2023, individually evaluated modified loans to borrowers experiencing financial difficulty had a related allowance of $ 26,000 and $ 1.3 million, respectively.

As of September 30, 2024 and December 31, 2023, none of the modified loans to borrowers experiencing financial difficulty were performing in accordance with their modified terms.

Accruing modified loans to borrowers experiencing financial difficulty are included in the loans individually evaluated as part of the calculation of the allowance for credit losses for loans.

For the three months ended March 31, 2025 and 2024, the Company recorded no charge-offs and $ 1.3 million of charge-offs for modified loans to borrowers experiencing financial difficulty, respectively.

As of March 31, 2025 and December 31, 2024, individually evaluated modified loans to borrowers experiencing financial difficulty had a related allowance of $ 22,000 and $ 24,000 , respectively.

As of March 31, 2025 and December 31, 2024, none of the modified loans to borrowers experiencing financial difficulty were performing in accordance with their modified terms.

All accruing modified loans to borrowers experiencing financial difficulty, if any, are included in the loans individually evaluated as part of the calculation of the allowance for credit losses for loans.

Risk Rating System

10 unchanged sentences

Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

A Special Mention rating is a temporary rating, pending the occurrence of an event that would cause the risk rating either to improve or to be downgraded.

Special Mention is a temporary rating, pending the occurrence of an event that would cause the risk rating either to improve or to be downgraded.

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

21 unchanged sentences

Revolving loans that are converted to term loans are treated as new originations in the tables below and are presented by year of initial origination.

During the nine months ended September 30, 2024, and the year ended December 31, 2023, $ 867,000 and $ 7.1 million of revolving loans were converted to term loans, respectively.

During the three months ended March 31, 2025, and the year ended December 31, 2024, none and $ 867,000 of the Company’s revolving loans were converted to term loans, respectively.

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

1 unchanged sentence

amortized cost

September 30, 2024

March 31, 2025

Commercial and industrial:

46 unchanged sentences

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

September 30, 2024

90 days or more past due

and still accruing

March 31, 2025

Commercial and industrial

1 unchanged sentence

Commercial real estate

90 days or more past due

and still accruing

December 31, 2024

2 unchanged sentences

Commercial real estate

Nonaccrual loans totaled $ 9.7 million and $ 13.0 million at September 30, 2024 and December 31, 2023, respectively.

Nonaccrual loans guaranteed by a government agency, which reduces the Company’s credit exposure, were $ 2.0 million at September 30, 2024 compared to $ 740,000 at December 31, 2023.

At September 30, 2024, nonaccrual loans included $ 2.4 million of loans 30-89 days past due and $ 4.6 million of loans less than 30 days past due.

At December 31, 2023, nonaccrual loans included $ 927,000 of loans 30-89 days past due and $ 2.1 million of loans less than 30 days past due.

At September 30, 2024, the $ 2.4 million of nonaccrual loans 30-89 days past due was comprised of two loans and the $ 4.6 million of loans less than 30 days past due was comprised of 18 loans.

Nonaccrual loans totaled $ 9.8 million and $ 9.2 million at March 31, 2025 and December 31, 2024, respectively.

Nonaccrual loans guaranteed by a government agency, which reduces the Company’s credit exposure, were $ 618,000 at March 31, 2025 compared to $ 2.0 million at December 31, 2024.

At March 31, 2025, nonaccrual loans included $ 610,000 of loans 30-89 days past due and $ 4.4 million of loans less than 30 days past due.

At December 31, 2024, nonaccrual loans included $ 643,000 of loans 30-89 days past due and no loans less than 30 days past due.

At March 31, 2025, the $ 610,000 of nonaccrual loans 30-89 days past due was comprised of one loan and the $ 4.4 million of loans less than 30 days past due was comprised of 19 loans.

All these loans were placed on nonaccrual due to concerns over the financial condition of the borrowers.

There were no loans that were 90 days or more past due and still accruing at September 30, 2024 or December 31, 2023.

Interest foregone on nonaccrual loans was approximately $ 397,000 and $ 1.1 million for the three and nine months ended September 30, 2024, compared to $ 173,000 and $ 593,000 for the three and nine months ended September 30, 2023.

Interest income recognized on nonaccrual loans was approximately $ 7,400 and $ 93,600 for the three and nine months ended September 30, 2024, compared to $ 39,000 and $ 120,000 for the three and nine months ended September 30, 2023, respectively.

At both March 31, 2025 and December 31, 2024, there was one loan 90 days or more past due and still accruing, with a balance of $ 150,000 and $ 220,000 at those dates.

Interest foregone on nonaccrual loans was approximately $ 269,000 for the three months ended March 31, 2025, compared to $ 483,000 for the three months ended March 31, 2024.

Interest income recognized on nonaccrual loans was approximately $ 35,000 and $ 7,200 for the three months ended March 31, 2025 and 2024, respectively.

Pledged Loans

Our FHLB line of credit is secured under terms of a blanket collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $ 1.01 billion and $ 1.14 billion at September 30, 2024 and December 31, 2023, respectively.

Our discount window advance line with the FRB of San Francisco is secured by a pledge of certain qualifying loans with unpaid principal balances of $ 78.4 million at September 30, 2024.

No loans were pledged to the FRB of San Francisco at December 31, 2023.

Our FHLB line of credit is secured under terms of a blanket collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $ 1.09 billion and $ 1.04 billion at March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025 and December 31, 2024, $ 75.1 million and $ 76.7 million of loans were pledged to the FRB of San Francisco, respectively.

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

3 unchanged sentences

unfunded commitments

Three months ended September 30, 2024

Allowance for credit losses

Beginning balance

Provision for (reversal of) credit losses

Ending balance

Nine months ended September 30, 2024

Three months ended March 31, 2025

Allowance for credit losses

2 unchanged sentences

Ending balance

September 30, 2024

March 31, 2025

Allowance for credit losses:

6 unchanged sentences

unfunded commitments

Three months ended September 30, 2023

Three months ended March 31, 2024

Allowance for credit losses

2 unchanged sentences

Ending balance

Nine months ended September 30, 2023

Allowance for loan losses

Beginning balance

Impact of CECL adoption

Reversal of credit losses

Ending balance

September 30, 2023

Allowance for credit losses by methodology:

March 31, 2024

Allowance for credit losses:

Loans individually evaluated

Loans collectively evaluated

Loans receivable by methodology:

Loans receivable:

Individually evaluated

Collectively evaluated

For the three months ended September 30, 2024, the provision for credit losses and related change in the allowance for credit losses on loans was mainly driven by a replenishment of the allowance.

Net charge-offs totaled $ 1.5 million during the third quarter of 2024, which included a $ 1.0 million complete charge-off on a commercial non-accrual loan, which was fully reserved for at June 30, 2024, a $ 480,000 complete charge-off of a non-accrual commercial real estate loan, which was sold during the current quarter, and a complete write-down of one non-accrual farmland loan for $ 88,000 , partially offset by two recoveries totaling $ 50,000 during the current quarter.

The quantitative reserve was impacted by declines in forecasted economic conditions for national gross domestic product and increasing forecasted national unemployment, both of which are key indicators utilized to estimate credit losses.

For the nine months ended September 30, 2024, the provision for credit losses and related change in the allowance for credit losses on loans was mainly driven by replenishment of the allowance during the period, partially offset by decreases in outstanding loan balances, leading to lower quantitative reserves.

Net charges-offs totaled $ 5.0 million for the nine months ended September 30, 2024, of which $ 3.2 million was specifically reserved for at December 31, 2023.

No changes were made to the qualitative risk factor conclusions during the nine months ended September 30, 2024.

The reserve for individually evaluated loans decreased during the nine months ended September 30, 2024 primarily due to a charge-offs of $ 3.2 million, as the collateral shortfalls were deemed uncollectable.

deteriorated (“PCD”) loans that have experienced post-acquisition declines in cash flows expected to be collected, by loan and collateral type as of the dates indicated.

September 30, 2024

For the three months ended March 31, 2025, the provision for credit losses was primarily driven by loan growth, charge-offs during the quarter, and an increase in specific reserves on individually evaluated loans.

Net charge-offs were $ 102,000 for the first quarter of 2025.

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

March 31, 2025

Commercial and industrial

6 unchanged sentences

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

As of September 30, 2024

As of March 31, 2025

As of December 31, 2024

5 unchanged sentences

for credit losses

for loan losses

for credit losses

Commercial and industrial

3 unchanged sentences

PEB ceased originating loans under this loan program in 2017.

Under this loan program, the borrower, CalCAP and the participating lender contributed funds to a loss reserve account that is held in a demand deposit account at the participating lender.

Under this loan program, the borrower, CalCAP and the participating lender contributed funds to a loss reserve account held in a demand deposit account at the participating lender.

The borrower’s contributions to the loss reserve account are attributed to the participating lender.

5 unchanged sentences

Funds contributed by the participating lender to the loss reserve account are treated as a receivable from CalCAP and evaluated for impairment quarterly.

As of September 30, 2024 and December 31, 2023, the Company had $ 18.6 million and $ 19.4 million, respectively, of loans enrolled in this loan program.

The Company had a loss reserve account of $ 10.4 million and $ 13.7 million as of September 30, 2024 and December 31, 2023, respectively.

In addition, as successor to PEB, the Company was approved by CalCAP, in partnership with the California Air Resources Board, to originate loans to California truckers in the On-Road Heavy-Duty Vehicle Air Quality Loan

Under this loan program, CalCAP solely contributes funds to a loss reserve account that is held in a demand deposit account at the participating lender.

As of March 31, 2025 and December 31, 2024, the Company had $ 16.4 million and $ 17.7 million, respectively, of loans enrolled in this loan program.

The Company had a loss reserve account of $ 7.8 million and $ 10.4 million as of March 31, 2025 and December 31, 2024, respectively.

Under this loan program, CalCAP solely contributes funds to a loss reserve account held in a demand deposit account at the participating lender.

Losses are handled in the same manner as described above.

1 unchanged sentence

When the loss reserve account balance exceeds the total associated loan balance, the excess is to be remitted to CalCAP.

The Company originated loans under this program of $ 3.9 million and $ 8.4 million during the three and nine months ended September 30, 2024, and $ 1.7 million and $ 4.2 million during the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, the Company had $ 17.8 million of loans enrolled in this program and a loss reserve account of $ 4.0 million.

The Company originated loans under this program of $ 3.4 million and $ 1.1 million during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the Company had $ 16.4 million of loans enrolled in this program and a loss reserve account of $ 3.7 million.

As of December 31, 2024, the Company had $ 17.3 million of loans enrolled in this program and a loss reserve account of $ 3.8 million.

1 unchanged sentence

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

September 30,

Premises owned

3 unchanged sentences

Total premises and equipment, net

Depreciation and amortization included in occupancy and equipment expense totaled $ 528,000 and $ 1.5 million for the three and nine months ended September 30, 2024, and $ 390,000 and $ 1.3 million for the three and nine months ended September 30, 2023, respectively.

Depreciation and amortization included in occupancy and equipment expense totaled $ 470,000 and $ 491,000 for the three months ended March 31, 2025 and 2024, respectively.

NOTE 7 – LEASES

The Company leased 20 branches under noncancelable operating leases as of September 30, 2024.

The Company leased 20 branches under noncancelable operating leases as of March 31, 2025.

These leases expire on various dates through 2030.

The Company’s leases often have an option to renew one or more times, at the Company’s discretion, following the expiration of the initial term.

If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability.

The Company uses the discount rate implicit in the lease whenever this rate is readily determinable.

As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.

The below maturity schedule represents the undiscounted lease payments for the five-year period and thereafter as of September 30, 2024:

Many of these lease agreements include one or more renewal options, exercisable at the Company’s discretion.

When the Company determines at lease commencement that it is reasonably certain to exercise a renewal option, the extended lease term is included in the measurement of the ROU asset and corresponding lease liability.

The Company uses the discount rate implicit in the lease when it is readily determinable.

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

The below maturity schedule presents, as of March 31, 2025, the undiscounted lease payments for the next five years and thereafter:

For remainder of 2025

2 unchanged sentences

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

September 30, 2024

March 31, 2025

December 31, 2024

1 unchanged sentence

Weighted-average discount rate

Rental expense included in occupancy and equipment expense totaled $ 1.0 million and $ 3.0 million for both the three and nine months ended September 30, 2024 and the three and nine months ended September 30, 2023, respectively.

The following table presents certain information related to the operating lease costs included in occupancy and equipment expense on the consolidated statements of income for the periods indicated:

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

Three months ended

Nine months ended

September 30,

Operating lease cost

10 unchanged sentences

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

Nine months ended

September 30, 2024

Three months Ended

March 31, 2025

December 31, 2024

4 unchanged sentences

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

Nine months ended

September 30, 2024

Three months Ended

March 31, 2025

December 31, 2024

2 unchanged sentences

Balance at end of period

Estimated annual amortization expense at September 30, 2024 was as follows:

Estimated annual amortization expense at March 31, 2025 was as follows:

For remainder of 2025

1 unchanged sentence

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

September 30,

Tax assets, net

7 unchanged sentences

CalCAP reserve receivable

Total interest receivable and other assets

NOTE 10 – DEPOSITS

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

September 30,

Demand deposits (1)

Time deposits

Included in time deposits above are brokered deposits of $ 35.5 million and $ 43.6 million as of September 30, 2024 and December 31, 2023, respectively.

At September 30, 2024, uninsured deposits totaled $ 995.1 million, or 46.6 % of total deposits, compared to $ 969.2 million, or 45.5 % of total deposits at December 31, 2023.

The uninsured amounts are estimates based on the methodologies and assumptions used for United Business Bank’s regulatory reporting requirements.

(1) Noninterest bearing.

Included in time deposits above are brokered deposits of $ 6.5 million and $ 35.5 million as of March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025, uninsured deposits totaled $ 989.6 million, or 46.5 % of total demand deposits, compared to $ 1.0 billion, or 46.8 % of total demand deposits at December 31, 2024.

The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

NOTE 11 – BORROWINGS

Other borrowings – The Bank has an approved secured borrowing facility with the Federal Home Loan Bank of San Francisco (the “FHLB”) for up to 25 % of total assets for a term not to exceed five years under a blanket lien of certain types of loans.

At September 30, 2024 and December 31, 2023, we had the ability to borrow up to $ 512.7 million and $ 576.9 million, respectively, from the FHLB of San Francisco.

At both September 30, 2024 and December 31, 2023, we had no FHLB advances outstanding.

During the first quarter of 2024, the Bank was approved for discount window advances with the FRB of San Francisco secured by certain types of loans.

At September 30, 2024, we had the ability to borrow up to $ 42.3 million from the FRB of San Francisco, with no FRB of San Francisco advances outstanding at that date.

At March 31, 2025 and December 31, 2024, we had the ability to borrow up to $ 535.0 million and $ 540.2 million, respectively, from the FHLB of San Francisco.

At both March 31, 2025 and December 31, 2024, we had no FHLB borrowings outstanding.

The Bank has been approved for discount window advances from the FRB of San Francisco secured by certain types of loans.

At March 31, 2025 and December 31, 2024, we had the ability to borrow up to $ 41.5 million and $ 41.9 million, respectively, from the FRB of San Francisco.

At both March 31, 2025 and December 31, 2024, we had no FRB of San Francisco advances outstanding.

The Bank has Federal Funds lines with four correspondent banks.

Cumulative available commitments totaled $ 65.0 million at both September 30, 2024 and December 31, 2023.

There were no amounts outstanding under these facilities at both September 30, 2024 and December 31, 2023.

Junior subordinated deferrable interest debentures – In connection with its previous acquisitions, the Company assumed junior subordinated deferrable interest debentures, totaling $ 8.6 million, net of fair value adjustments, with a weighted average interest rate of 7.79 % at September 30, 2024, compared to $ 8.6 million, net of fair value adjustments, with a weighted average rate of 8.23 % at December 31, 2023 .

Cumulative available commitments totaled $ 65.0 million at both March 31, 2025 and December 31, 2024.

There were no amounts outstanding under these facilities at both March 31, 2025 and December 31, 2024.

Junior subordinated deferrable interest debentures – In connection with its previous acquisitions, the Company assumed junior subordinated deferrable interest debentures, totaling $ 8.7 million, net of fair value adjustments, with a weighted average interest rate of 7.14 % at March 31, 2025, compared to $ 8.6 million, net of fair value adjustments, with a weighted average rate of 7.20 % at December 31, 2024 .

The junior subordinated deferrable interest debentures mature in 2034, subject to earlier redemption by the Company at its option.

4 unchanged sentences

The Company, at its option, may redeem the Notes, in whole or in part, on any interest payment date on or after September 15, 2025, without a premium.

At September 30, 2024 and December 31, 2023, the Company had outstanding Notes, net of cost to issue, totaling $ 63.7 million and $ 63.9 million, respectively.

At March 31, 2025 and December 31, 2024, the Company had outstanding Notes, net of cost to issue, totaling $ 63.8 million and $ 63.7 million, respectively.

NOTE 12 – INTEREST PAYABLE AND OTHER LIABILITIES

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

September 30,

Accrued expenses

6 unchanged sentences

Three months ended

Nine months ended

September 30,

Professional fees

9 unchanged sentences

The Company expenses marketing and promotion costs as they are incurred.

Advertising expense included in marketing and promotions totaled $ 10,000 and $ 38,000 for the three and nine months ended September 30, 2024 and $ 15,000 and $ 36,000 for the three and nine months ended September 30, 2023, respectively.

Advertising expense included in marketing and promotions totaled $ 5,000 and $ 11,000 for the three months ended March 31, 2025 and 2024, respectively.

NOTE 14 – EQUITY INCENTIVE PLANS

11 unchanged sentences

In addition, subject to adjustment as provided in the 2024 Plan, the maximum aggregate number of shares that may be covered by awards granted under the 2024 Plan to any non-employee director in any one calendar year is 25,000 shares.

As of September 30, 2024, a total of 490,711 shares were available for future issuance under the 2024 Plan.

As of March 31, 2025, a total of 473,038 shares were available for future issuance under the 2024 Plan.

2017 Omnibus Equity Incentive Plan

3 unchanged sentences

Factors considered by the Board in awarding equity incentives to officers and employees include the performance of the Company, the employee’s or officer’s job performance, the importance of his or her position, and his or her contribution to the organization’s goals for the award period.

Generally, awards have a vesting period of no longer than ten years.

Generally, awards have a vesting period of one to five years .

Subject to adjustment as provided in the 2017 Plan, the maximum number of shares of common stock that may be delivered pursuant to awards granted under the 2017 Plan is 450,000 .

3 unchanged sentences

Awarded shares of restricted stock vest over (i) a one-year period following the date of grant, in the case of the non-employee directors, and (ii) a three-year or five-year period following the date of grant, with the initial vesting occurring on the one-year anniversary of the date of grant, in the case of the executive officers.

As of September 30, 2024, no shares were available for future issuance under the 2017 Plan because the 2024 Plan provides that no further awards may be made under the 2017 Plan upon the approval by the Company’s shareholders of the 2024 Plan.

As of March 31, 2024, no shares were available for future issuance under the 2017 Plan because the 2024 Plan provides that no further awards may be made under the 2017 Plan upon the approval by the Company’s shareholders of the 2024 Plan.

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

At and for the three and nine months ended September 30,

Weighted-average

2 unchanged sentences

Non-vested, at March 31,

Non-Vested, at June 30,

Non-Vested, at September 30,

NOTE 15 – FAIR VALUE MEASUREMENT

10 unchanged sentences

For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements.

Fair value is used on a nonrecurring basis to adjust carrying values for individually evaluated loans and other real estate owned and to record impairment on certain assets, such as goodwill, core deposit intangible, and other long-lived assets.

Fair value is used on a nonrecurring basis to adjust carrying values for individually evaluated loans and

other real estate owned and to record impairment on certain assets, such as goodwill, core deposit intangible, and other long-lived assets.

In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy.

1 unchanged sentence

Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our quarterly valuation process.

There were no transfers between levels during the three and nine months ended September 30, 2024 and 2023.

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

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

There were no transfers between levels during the three months ended March 31, 2025 and 2024.

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

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

Total Estimated

Fair Value Measurements

September 30, 2024

March 31, 2025

Government Agencies

8 unchanged sentences

December 31, 2024

Government Agencies

Municipal securities

4 unchanged sentences

Equity securities

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

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

Total Estimated

Fair Value Measurements

September 30, 2024

March 31, 2025

Individually evaluated loans

3 unchanged sentences

Individually evaluated loans

(1) For each quarter the loan was outstanding in 2023, with the adoption of CECL, one performing modified loan to a borrower experiencing financial difficulty was individually evaluated in determining the estimated allowance for credit losses.

The Company does not record loans at fair value on a recurring basis.

11 unchanged sentences

Such adjustments and assumptions are typically significant and result in a Level 3 classification of the inputs for determining fair value.

The Company had no OREO at both September 30, 2024 and December 31, 2023.

The Company had no OREO at both March 31, 2025 and December 31, 2024.

NOTE 16 – FAIR VALUE OF FINANCIAL INSTRUMENTS

1 unchanged sentence

Fair value measurements

September 30, 2024

March 31, 2025

Financial assets:

Cash and cash equivalents

Time deposits in banks

Investment securities AFS

32 unchanged sentences

In the normal course of business, the Company enters into various commitments to extend credit which are not reflected in the financial statements.

These commitments consist of the undisbursed balance on home equity and unsecured personal lines of credit, commercial lines of credit, including commercial real estate secured lines of credit, and of undisbursed funds on construction and development loans.

These commitments consist of the undisbursed balance on home equity and unsecured personal lines of credit and commercial lines of credit, including commercial real estate secured lines of credit, and undisbursed funds on construction and development loans.

The Company also issues standby letter of credit commitments, primarily for the third-party performance obligations of clients.

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

September 30,

Commitments to extend credit

5 unchanged sentences

The Company’s outstanding loan commitments are made using the same underwriting standards as comparable outstanding loans.

The reserve associated with these commitments included in interest payable and other liabilities on the consolidated balance sheets was $ 590,000 at September 30, 2024 and $ 225,000 at December 31, 2023.

The reserve associated with these commitments included in interest payable and other liabilities on the consolidated balance sheets was $ 540,000 at March 31, 2025 and $ 600,000 at December 31, 2024.

Commercial Real Estate Concentrations

At September 30, 2024 and December 31, 2023, in management’s judgment, a concentration of loans existed in commercial real estate related loans.

At March 31, 2025 and December 31, 2024, in management’s judgment, a concentration of loans existed in commercial real estate related loans.

The Company’s commercial real estate loans are secured by owner-occupied and non-owner occupied commercial real estate and multifamily properties.

1 unchanged sentence

The Company has commitments to fund investments in LIHTC partnerships and an SBIC fund.

At September 30, 2024, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $ 5.0 million and $ 122,000 , respectively.

At December 31, 2023, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $ 5.7 million and $ 122,000 , respectively.

At September 30, 2024, approximately $ 245.6 million, or 11.4 %, of the Company's deposits were derived from its top ten depositors.

At December 31, 2023, approximately $ 246.0 million, or 11.5 %, of the Company's deposits were

derived from its top ten depositors.

As of September 30, 2024 and December 31, 2023, approximately $ 995.1 million, or 46.6 % and $ 969.2 million, or 45.4 %, of our total deposits were uninsured, respectively.

The uninsured amounts are estimates based on the methodologies and assumptions used for United Business Bank’s regulatory reporting requirements.

At both March 31, 2025 and December 31, 2024, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $ 4.9 million and $ 122,000 , respectively.

Deposit Concentrations

At March 31, 2025, approximately $ 238.7 million, or 11.2 %, of the Company's deposits were derived from its top ten depositors.

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

Local Agency Deposits and Other Advances

1 unchanged sentence

The Company is required to provide collateral for certain local agency deposits in the states of California, Colorado, New Mexico and Washington.

At both September 30, 2024 and December 31, 2023, the FHLB had issued letters of credit on behalf of the Company totaling $ 40.6 million, as collateral for local agency deposits.

At both March 31, 2025 and December 31, 2024, the FHLB had issued letters of credit on behalf of the Company totaling $ 41.1 million as collateral for local agency deposits.

NOTE 18 – SEGMENT INFORMATION

The Company operates as one reportable segment:

banking operations.

The Company’s banking operations generate revenue primarily from loans and securities, deposits, and non-interest income.

Loan products generate a significant portion of interest and fee income, while deposit products provide fee and service charge income.

The Company also earns interest income from securities and generates net gains from the sale of loans to third parties.

Interest expense, provisions for credit losses, salaries and employee benefits, data processing, and occupancy expense typically represent the significant expenses in banking operations.

These expenses align with those reported in the Company’s Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flows.

Noncash items, such as depreciation and amortization, are also reflected in both the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements Cash Flows.

The Company’s Chief Operating Decision Maker (CODM) is identified as the Chief Executive Officer, who is responsible for assessing the financial performance of the Company and allocating resources accordingly.

The CODM is provided with consolidated balance sheets, income statements, and net interest margin analyses in order to evaluate revenue streams, significant expenses, and budget-to-actual results in assessing the Company’s segment and determining the allocation of resources, as well as evaluating return on assets.

In addition, the CODM utilizes consolidated net income, return on assets, and net interest margin as benchmarks to compare the Company’s performance against competitors.

All operations are domestic and align with a single operating segment.

Information reported internally for performance assessment by the CODM is identical to that shown in the Condensed Consolidated Statements of Income.

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

Three months ended March 31,

Interest and dividend income

Reconciliation of revenue:

Other revenues

Total consolidated revenue

Interest expense

Segment net interest income and noninterest income

Provision for credit losses

Salaries and employee benefits

Occupancy and equipment

Data processing

Other segment items

Provision for income taxes

Segment net income/consolidated net income

Reconciliation of assets:

Total assets for reportable segment

Total consolidated assets

NOTE 19 – SUBSEQUENT EVENTS

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements