What changed in this filing

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Item 1. Financial Statements

2025-08-11 compared with 2025-05-09 · 156 added, 128 removed, 702 unchanged (29% of the section changed)

13 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 March 31, 2025 and December 31, 2024

Investment securities available-for-sale ("AFS"), at fair value, net of allowance for credit losses of $ 0 at both June 30, 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 $ 18,500 at March 31, 2025 and $ 17,900 at December 31, 2024

Loans, net of allowance for credit losses of $ 18,700 at June 30, 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 March 31, 2025 and December 31, 2024

no shares issued and outstanding at both June 30, 2025 and December 31, 2024

Common stock, no par value;

100,000,000 shares authorized;

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

10,941,232 and 11,121,475 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid in capital

8 unchanged sentences

Three months ended

Six months ended

Interest income:

14 unchanged sentences

Gain on sale of loans

(Loss) gain on equity securities

Gain (loss) on equity securities

Service charges and other fees

Loan servicing and other loan fees

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

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

Other income and fees

18 unchanged sentences

Three months ended

Six months ended

Other comprehensive income:

10 unchanged sentences

Income/(Loss)

Three months ended March 31, 2025

Balance, December 31, 2024

Three months ended June 30, 2025

Balance, April 1, 2025

Other comprehensive income, net

Restricted stock granted

Forfeiture of restricted stock grants

Cash dividends of $ 0.20 per share

1 unchanged sentence

Repurchase of shares

Balance, March 31, 2025

Three months ended March 31, 2024

Balance, December 31, 2023

Balance, June 30, 2025

Three months ended June 30, 2024

Balance, April 1, 2024

Other comprehensive income, net

Cash dividends of $ 0.10 per share

Stock based compensation

Repurchase of shares

Balance, June 30, 2024

Comprehensive

Shareholders’

Income/(Loss)

Six months ended June 30, 2025

Balance, January 1, 2025

Other comprehensive income, net

Restricted stock granted

Forfeiture of restricted stock grants

Forfeiture of restricted stock granted

Cash dividends of $ 0.30 per share

1 unchanged sentence

Repurchase of shares

Balance, March 31, 2024

Balance, June 30, 2025

Six months ended June 30, 2024

Balance, January 1, 2024

Other comprehensive loss, net

Restricted stock granted

Forfeiture of restricted stock granted

Cash dividends of $ 0.20 per share

Stock based compensation

Repurchase of shares

Balance, June 30, 2024

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three months ended

Six months ended

Cash flows from operating activities:

16 unchanged sentences

Net change in interest receivable and other assets

(Decrease) increase in salary continuation plan, net

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

6 unchanged sentences

(In thousands)

Three months ended

Six months ended

Cash flows from financing activities:

Decrease in noninterest and interest bearing deposits in banks, net

(Decrease) increase in time deposits, net

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:

7 unchanged sentences

United Business Bank (the “Bank”), the Company’s wholly owned banking subsidiary, is a California state-chartered bank which provides a broad range of financial services primarily to local small and mid-sized businesses, service professionals and individuals.

In its 20 years of operation, the Bank has grown to 35 full-service banking branches, with 16 locations in California, one in Nevada, two in Washington, five in New Mexico and 11 in Colorado.

In its 20 years of operation, the Bank has grown to 34 full-service banking branches at June 30, 2025, with 16 locations in California, one in Nevada, one in Washington, five in New Mexico and 11 in Colorado.

The condensed consolidated financial statements include the accounts of the Company and the Bank.

14 unchanged sentences

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 amendments are effective for annual reporting periods beginning after December 15, 2023 (i.e., starting with the Company’s 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.

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

7 unchanged sentences

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:

1) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received).

1) income taxes

paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received).

The amendments are effective for public business entities for annual periods beginning after December 15, 2024.

The Company 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:

March 31, 2025

June 30, 2025

Government Agencies

11 unchanged sentences

Corporate bonds

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.

No allowances for credit losses have been recognized on investment debt securities AFS in an unrealized loss position at both June 30, 2025 and December 31, 2024.

Amortized cost and fair values exclude accrued interest receivable of $ 1.3 million at both June 30, 2025 and December 31, 2024, which is included in interest receivable and other assets in the condensed consolidated balance sheets.

During both the three and six months ended June 30, 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.

March 31, 2025

June 30, 2025

December 31, 2024

4 unchanged sentences

Due after ten years

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

At both June 30, 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

March 31, 2025

June 30, 2025

Government Agencies

13 unchanged sentences

Corporate bonds

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 June 30, 2025, the Company held 328 securities AFS, of which 186 were in an unrealized loss position for more than twelve months and 35 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

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.

Investment debt securities that were in an unrealized loss position as of June 30, 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 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.

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 March 31, 2025.

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 June 30, 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 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.

The Company recognized a net gain on equity securities of $ 7,000 and a net loss of $ 248,000 for the three and six months ended June 30, 2025, compared to a net loss of $ 321,000 and a net gain of $ 252,000 for the three and six months ended June 30, 2024, respectively.

Equity securities were $ 12.9 million and $ 13.1 million as of June 30, 2025 and December 31, 2024, respectively.

NOTE 4 – LOANS

3 unchanged sentences

Commercial real estate

Net deferred loan costs

Deferred loan costs, net

Allowance for credit losses

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.

Net loans exclude accrued interest receivable of $ 6.4 million and $ 6.7 million at June 30, 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

March 31, 2025

June 30, 2025

Recorded investment in loans individually evaluated:

14 unchanged sentences

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.

During the three and six months ended June 30, 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

March 31, 2025

June 30, 2025

Commercial and industrial

6 unchanged sentences

Commercial real estate

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.

For the three and six months ended June 30, 2025, the Company recorded no charge-offs for modified loans to borrowers experiencing financial difficulty .

During the three and six months ended June 30, 2024, the Company recorded charge-offs of $ 0 and $ 1.3 million, respectively, related to modified loans to borrowers experiencing financial difficulty.

As of June 30, 2025 and December 31, 2024, individually evaluated modified loans to borrowers experiencing financial difficulty had no related allowance and an allowance of $ 24,000 , respectively.

At both dates , 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 in the calculation of the allowance for credit losses.

Risk Rating System

34 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 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.

During the six months ended June 30, 2025, and the year ended December 31, 2024, none and $ 867,000 , respectively, of the Company’s revolving loans were converted to term loans.

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

1 unchanged sentence

amortized cost

March 31, 2025

June 30, 2025

Commercial and industrial:

48 unchanged sentences

and still accruing

March 31, 2025

June 30, 2025

Commercial and industrial

7 unchanged sentences

Commercial real estate

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.

Nonaccrual loans totaled $ 13.5 million and $ 9.2 million at June 30, 2025 and December 31, 2024, respectively.

Nonaccrual loans guaranteed by a government agency, which reduces the Company’s credit exposure, were $ 610,000 at June 30, 2025 compared to $ 2.0 million at December 31, 2024.

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.

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.

The increase in nonaccrual loans reflects borrower-specific credit deterioration, primarily within the commercial and industrial and commercial real estate portfolios.

At June 30, 2025, the $ 599,000 of nonaccrual loans 30-89 days past due was comprised of two loans and the $ 5.3 million of loans less than 30 days past due was comprised of 16 loans.

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

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.

At June 30, 2025 and December 31, 2024, there were three loans and one loan 90 days or more past due and still accruing, with a balance of $ 2.9 million and $ 220,000 at those dates, respectively.

Of the $ 2.9 million of loans 90 days or more past due and still accruing at June 30, 2025, $ 2.8 million are fully guaranteed by government agencies.

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, compared to $ 79,000 and $ 86,000 for the three and six months ended June 30, 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 $ 1.09 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.

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 $ 1.05 billion and $ 1.04 billion at June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025 and December 31, 2024, $ 73.2 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 March 31, 2025

Three months ended June 30, 2025

Allowance for credit losses

Beginning balance

Provision for (reversal of) credit losses

(Reversal of) provision for credit losses

Ending balance

March 31, 2025

Six months ended June 30, 2025

Allowance for credit losses:

Beginning balance

(Reversal of) provision for credit losses

Ending balance

June 30, 2025

Allowance for credit losses:

Loans individually evaluated

5 unchanged sentences

unfunded commitments

Three months ended March 31, 2024

Three months ended June 30, 2024

Allowance for credit losses

Beginning balance

(Reversal of) provision for credit losses

Ending balance

Six months ended June 30, 2024

Allowance for loan losses

Beginning balance

Provision for (reversal of) credit losses

Ending balance

March 31, 2024

June 30, 2024

Allowance for credit losses:

4 unchanged sentences

Collectively evaluated

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.

For the three months ended June 30, 2025, the minimal provision for credit losses was primarily driven by loan growth, with minimal charge-offs during the quarter.

Net charge-offs were $ 13,000 for the second quarter of 2025, compared to $ 76,000 for the same period in 2024.

For the six months ended June 30, 2025, the provision for credit losses and the related change in the allowance for credit losses on loans was mainly driven by loan growth, 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.

Net charge-offs totaled $ 115,000 for the six months ended June 30, 2025, compared to $ 3.5 million for the six months ended June 30, 2024, of which $ 3.2 million had been specifically reserved for at December 31, 2023.

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

June 30, 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 March 31, 2025

As of June 30, 2025

As of December 31, 2024

20 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 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.

As of June 30, 2025 and December 31, 2024, the Company had $ 11.7 million and $ 17.7 million, respectively, of loans enrolled in this loan program.

The Company had a loss reserve account of $ 7.4 million and $ 10.4 million as of June 30, 2025 and December 31, 2024, 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 Program.

2 unchanged sentences

The funds are the property of CalCAP and are payable upon termination of the program.

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 $ 3.4 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.

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 $ 5.5 million and $ 8.9 million during the three and six months ended June 30, 2025 and $ 1.1 million and $ 4.5 million during the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, the Company had $ 21.2 million of loans enrolled in this program and a loss reserve account of $ 4.7 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.

6 unchanged sentences

Total premises and equipment, net

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.

Depreciation and amortization included in occupancy and equipment expense totaled $ 496,000 and $ 1.0 million for the three and six months ended June 30, 2025 and $ 518,000 and $ 1.0 million for the three and six months ended June 30, 2024, respectively.

NOTE 7 – LEASES

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

The Company leased 19 branches under noncancelable operating leases as of June 30, 2025.

These leases expire on various dates through 2030.

3 unchanged sentences

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:

The below maturity schedule presents, as of June 30, 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:

March 31, 2025

June 30, 2025

December 31, 2024

3 unchanged sentences

Three months ended

Six months ended

Operating lease cost

10 unchanged sentences

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

Three months Ended

March 31, 2025

Six months Ended

June 30, 2025

December 31, 2024

4 unchanged sentences

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

Three months Ended

March 31, 2025

Six months Ended

June 30, 2025

December 31, 2024

2 unchanged sentences

Balance at end of period

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

Estimated annual amortization expense at June 30, 2025 was as follows:

For remainder of 2025

16 unchanged sentences

(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.

Included in time deposits above are no brokered deposits as of June 30, 2025, and $ 35.5 million of brokered deposits as of December 31, 2024.

At June 30, 2025, uninsured deposits totaled $ 1.0 billion, or 47.0 % of total deposits, compared to $ 1.0 billion, or 46.8 % of total deposits at December 31, 2024.

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

1 unchanged sentence

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 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.

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, 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.

At June 30, 2025 and December 31, 2024, we had the ability to borrow up to $ 40.3 million and $ 41.9 million, respectively, from the FRB of San Francisco.

At both June 30, 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 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 .

Cumulative available commitments totaled $ 65.0 million at both June 30, 2025 and December 31, 2024.

There were no amounts outstanding under these facilities at both June 30, 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 7.16 % at June 30, 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 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.

At June 30, 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

8 unchanged sentences

Three months ended

Six months ended

Professional fees

9 unchanged sentences

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

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

Advertising expense included in marketing and promotions totaled $ 9,000 and $ 14,000 for the three and six months ended June 30, 2025, and $ 17,000 and $ 28,000 for the three and six months ended June 30, 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 March 31, 2025, a total of 473,038 shares were available for future issuance under the 2024 Plan.

As of June 30, 2025, a total of 264,855 shares were available for future issuance under the 2024 Plan.

2017 Omnibus Equity Incentive Plan

8 unchanged sentences

All unvested restricted shares outstanding vest in the event of a change in control of the Company.

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 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.

Restricted stock awards granted to non-employee directors generally vest one year from the date of grant.

Awards to executive officers typically vest over three - or five-year periods, with initial vesting occurring on the one-year anniversary of the grant date.

As of June 30, 2024, no shares remained available for issuance under the 2017 Plan, as the approval of the 2024 Plan by shareholders terminated the ability to grant further awards under the 2017 Plan.

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

3 unchanged sentences

Non-vested, at March 31,

Non-Vested, at June 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 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.

There were no transfers between levels during the three and six months ended June 30, 2025 and 2024.

At both June 30, 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:

1 unchanged sentence

Fair Value Measurements

March 31, 2025

June 30, 2025

Government Agencies

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Fair Value Measurements

March 31, 2025

June 30, 2025

Individually evaluated loans

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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 March 31, 2025 and December 31, 2024.

The Company had no OREO at both June 30, 2025 and December 31, 2024.

NOTE 16 – FAIR VALUE OF FINANCIAL INSTRUMENTS

1 unchanged sentence

Fair value measurements

March 31, 2025

June 30, 2025

Financial assets:

44 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 $ 540,000 at March 31, 2025 and $ 600,000 at December 31, 2024.

The r eserve associated with these commitments included in interest payable and other liabilities on the consolidated balance sheets was $ 530,000 at June 30, 2025 and $ 600,000 at December 31, 2024.

Commercial Real Estate Concentrations

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

At June 30, 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 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.

At June 30, 2025, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $ 4.9 million and $ 122,000 , respectively.

At December 31, 2024, the remaining commitments to the LIHTC partnerships and the SBIC fund were approximately $ 4.7 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 June 30, 2025, approximately $ 245.2 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.

2 unchanged sentences

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

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.

At both June 30, 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

3 unchanged sentences

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.

The Company also earns interest and dividend 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.

7 unchanged sentences

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

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Interest and dividend income

17 unchanged sentences

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