What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-03-16 compared with 2025-03-14 · 141 added, 151 removed, 267 unchanged (52% of the section changed)

An investment in our common stock is subject to risks inherent in our business.

Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this Form 10-K.

Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all the other information included in this Form 10-K.

The risks described below are not the only ones we face.

Additional risks and uncertainties not currently known to us or that are currently deemed to be immaterial may also materially and adversely affect our business, financial condition, capital levels, cash flows, liquidity, results of operations and prospects.

The market price of our common stock could decline significantly due to any identified or other risks, and some or all of your investment value could diminish.

Additional risks and uncertainties not currently known to us or that we may currently deem to be immaterial may also materially and adversely affect our business, financial condition, capital levels, cash flows, liquidity, results of operations and prospects.

The market price of our common stock could decline significantly due to any of these identified or other risks, and you could lose some or all of your investment.

The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.

5 unchanged sentences

Adverse economic conditions in our market areas could impact our growth rate, reduce our customers’ ability to repay loans, and adversely impact our business, financial condition, and results of operations.

Broader economic factors such as inflation, unemployment and money supply fluctuations also may adversely affect our profitability.

Further, trade

wars, tariffs, or shifts in trade policies between the United States and other nations could disrupt supply chains, increase costs for businesses, and reduce export opportunities for our customers.

These developments may, in turn, negatively impact these businesses and, by extension, our operations and financial performance.

In addition, adverse weather conditions as well as decreases in market prices for agricultural products grown in our markets can adversely affect agricultural businesses in our markets.

A downturn in economic conditions in the market areas we serve, in particular the San Francisco Bay Area, Southern California, Denver, Colorado, Seattle, Washington, Central New Mexico and the agricultural region of the California Central Valley, be it due to inflation, recessionary trends, geopolitical conflicts, adverse weather, or other factors, could have a material adverse effect on our business, financial condition, and results of operations, including but not limited to:

Broader economic factors such as inflation, unemployment, money supply fluctuations, changes in monetary policy, and volatility in interest rate markets also may adversely affect our profitability.

Uncertainty regarding the timing, magnitude or pace of potential interest rate changes by the Federal Reserve, particularly following a prolonged period of elevated rates or increased interest rate volatility, may negatively affect borrowing demand, asset yields, deposit pricing, credit performance, and overall economic activity in our market areas.

Furthermore, trade disputes, tariffs, or shifts in trade policies between the United States and other nations could disrupt supply chains, increase costs for businesses, and reduce export opportunities for our customers.

These developments may, in turn, negatively impact our customers’ operations and, consequently, our financial performance.

A downturn in economic conditions in the market areas we serve, in particular the San Francisco Bay Area, Southern California, Denver, Colorado, Seattle, Washington, Central New Mexico and the agricultural region of the California Central Valley, whether due to inflation, recessionary trends, geopolitical instability or conflicts, or environmental and climate-related events such as wildfires, floods, or other factors, could have a material adverse effect on our business, financial condition, liquidity, and results of operations, including but not limited to:

● Reduced demand for our products and services , potentially leading to a decline in our overall loans or assets.

● Elevated levels of loan delinquencies, problem assets , and foreclosures .

● An increase in our allowance for credit losses on loans.

● An increase in our allowance for credit losses on loan s.

● Depreciation in collateral values linked to our loans, thereby diminishing borrowing capacities and asset values tied to existing loans .

● Reduced net worth and liquidity of loan guarantors , possibly impairing their ability to meet commitments to us .

● Reduced net worth and liquidity of loan guarantors , possibly impairing their ability to meet their commitments to us .

● Reduction in our low-cost or noninterest -bearing deposits.

A decline in local or regional economic conditions may have a greater effect on our earnings and capital compared to larger financial institutions with more geographically diverse real estate loan portfolios.

Because a significant portion of our loan portfolio is secured by real estate, deterioration in real estate markets could impair borrowers’ ability to repay loans and reduce the value of the underlying collateral.

Real estate values are influenced by a range of factors, including economic conditions, government policies, natural disasters (e.g., earthquakes, flooding and tornadoes), and trade-related pressures affecting construction costs or material availability.

Because a significant portion of our loan portfolio is secured by real estate, deterioration in real estate markets, including stress in certain commercial real estate sectors, could impair borrowers’ ability to repay loans and reduce the value of the underlying collateral.

Real estate values are influenced by a range of factors, including economic conditions, interest rates, government policies, natural disasters, construction and material availability, and other market or policy factors.

Liquidating significant collateral during a period of depressed real estate values could negatively impact our financial condition and profitability.

Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations.

Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the Federal Reserve.

Actions by monetary and fiscal authorities, including the Federal Reserve, could lead to inflation, deflation, or other economic phenomena that could adversely affect our financial performance.

tariffs on imported goods could exacerbate inflationary pressures by increasing the cost of goods and materials for businesses and consumers.

This may particularly affect small to medium-sized businesses, as they are less able to leverage economies of scale to mitigate cost pressures compared to larger businesses.

Consequently, our business clients may experience increased financial strain, reducing their ability to repay loans and adversely impacting our results of operations and financial condition.

Furthermore, a prolonged period of inflation could cause wages and other costs to us to increase, which could adversely affect our results of operations and financial condition.

Virtually all of our assets and liabilities are monetary in nature and, as a result, market interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.

However, interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services, creating additional uncertainty in the economic environment.

Our financial condition and results of operations are influenced by monetary, fiscal, and trade policies, including those of the Federal Reserve, the U.S.

Treasury, and other governmental authorities.

Actions by these authorities may lead to inflation, deflation, changes in interest rates, or other economic conditions that could materially adversely affect our results of operations.

Tariffs, supply-chain disruptions, or rising costs could reduce the ability of our clients, particularly small- and medium-sized businesses, to repay loans, negatively affecting credit quality and our financial performance.

Prolonged inflation may increase operational costs, including wages and benefits, while fluctuations in interest rates and the yield curve can significantly impact our net interest income.

Interest rates may not move in alignment with inflation or deflation, adding uncertainty to the economic environment.

Risks Related to Our Lending Activities

Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition and could result in further losses in the future.

Nonperforming assets adversely affect our earnings in various ways.

Nonperforming assets adversely affect our earnings and liquidity in various ways.

We do not record interest income on nonaccrual loans or foreclosed assets, and nonaccrual loans and foreclosed assets increase our loan administration costs.

Upon foreclosure or similar proceedings, we record the repossessed asset at its estimated fair value, less costs to sell, which may result in a write-down or loss.

A significant increase in the level of nonperforming assets from current levels would also increase our risk profile and may impact the capital levels our regulators believe are appropriate in light of

the increased risk profile.

While we attempt to reduce problem assets through collection efforts, asset sales and workouts and restructurings, decreases in the value of the underlying collateral, or in the borrower’s performance or financial condition, could adversely affect our business, results of operations and financial condition.

In addition, the resolution of nonperforming assets can require significant commitments of time from management, diverting their attention from other aspects of our operations.

A significant increase in the level of nonperforming assets from current levels would also increase our risk profile and may impact the capital levels and supervisory expectations our regulators believe are appropriate in light of the increased risk profile.

While we attempt to reduce problem assets through collection efforts, asset sales and workouts and restructurings, decreases in the value of the underlying collateral, including as a result of valuation uncertainty, reduced market liquidity, or refinancing challenges, or in the borrower’s performance or financial condition, could adversely affect our business, results of operations and financial condition.

In addition, the resolution of nonperforming assets can require significant commitments of time from management, diverting their attention from other aspects of our operations, and may be prolonged due to market conditions, interest rate levels, or reduced liquidity for certain asset classes.

Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans .

At December 31, 2025, we had $2.0 billion of commercial loans, consisting of $1.8 billion of commercial real estate and construction and land loans, representing 86.8% of total loans, and $175.4 million of commercial and industrial loans, representing 8.6% of total loans, where real estate is not the primary source of collateral.

The $1.7 billion of commercial real estate loans includes $225.2 million of multifamily loans and $1.5 million of commercial construction and land loans.

The $1.8 billion of

commercial real estate loans includes $310.3 million of multifamily loans and $9.0 million of commercial construction and land loans.

Commercial loans typically involve larger principal amounts than other types of loans, and some of our commercial borrowers have more than one loan outstanding with us.

2 unchanged sentences

For loans secured by non-owner-occupied properties, repayments rely heavily on tenant rent payments, and downturns in the real estate market or economic conditions heighten repayment risks.

In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity, which may compel the borrower to sell or refinance the property, increasing the risk of default.

Commercial business loans are typically made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.

In addition, many of our commercial real estate loans are not fully amortizing and require large balloon payments upon maturity.

These balloon payments may require the borrower to either sell or refinance the property, and refinancing may be difficult or unavailable due to elevated interest rates, tighter underwriting standards, declining property values, or reduced lender appetite, heightening the risk of default or non-payment.

If we foreclose on a commercial or multifamily real estate loan, the holding period for the collateral is typically longer than for one- to four-family residential loans as a result of the smaller pool of potential buyers.

C ommercial business loans are typically made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.

A borrower’s cash flow can be unpredictable, and collateral securing these loans may fluctuate in value.

2 unchanged sentences

In recent years, the commercial real estate market has experienced substantial growth, with increased competition contributing to historically low capitalization rates and rising property values.

However, the economic disruption caused by the COVID-19 pandemic significantly impacted this market.

The pandemic also accelerated the adoption of remote work, which has led many companies to re-evaluate their long-term real estate needs.

While some businesses are returning to traditional office environments, others are downsizing or shifting to hybrid models, creating uncertainty in demand for office spaces and other commercial properties.

This trend could result in prolonged vacancies, declining rental income, and reduced property values, adversely affecting the performance of our commercial real estate loan portfolio.

Federal banking regulators also have raised concerns about weaknesses in the commercial real estate market.

More recently, the commercial real estate market has been affected by higher interest rates, tighter credit conditions, and changing economic and workplace dynamics.

The adoption of remote and hybrid work models has led many companies to re-evaluate their long-term real estate needs.

Although certain employers have increased in-office requirements, others are downsizing or shifting to hybrid models, and demand for office space in certain markets has remained structurally lower than pre-pandemic levels, creating uncertainty in demand for office space and other commercial properties.

This trend could result in prolonged vacancies, declining rental income, refinancing challenges, and reduced property values, particularly for certain property types or markets, adversely affecting the performance of our commercial real estate loan portfolio.

Federal banking regulators have increased their focus on commercial real estate exposures, particularly with respect to refinancing risk, collateral valuation, and borrower equity levels, which may subject us to heightened examination scrutiny, additional risk management expectations, or more conservative supervisory expectations.

Failures in our risk management policies and controls could lead to higher delinquencies and losses, adversely affecting our business, financial condition, and results of operations.

2 unchanged sentences

Construction and land development loans totaled $9.0 million, or 0.4% of total loans as of December 31, 2025, nearly all of which were commercial real estate construction loans.

These loans involve additional risks because funds are advanced based on the project’s uncertain value prior to its completion, and costs may exceed realizable values in declining real estate markets.

These types of loans involve additional risks because funds are advanced based on the project’s uncertain value prior to its completion, and costs may exceed realizable values in declining real estate markets.

Because of the uncertainties inherent in estimating construction costs and the realizable market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to accurately evaluate the total funds required to complete a project and the related loan-to-value ratio.

Higher than anticipated construction costs may cause actual results to vary significantly from those estimated.

Further, this type of lending often involves larger loan principal amounts and might be

concentrated among a limited number of builders.

A downturn in the commercial real estate market could increase delinquencies, defaults, foreclosures, and significantly impair the value of our collateral, hindering our ability to sell the collateral upon foreclosure.

Further, this type of lending often involves larger loan principal amounts and might be concentrated among a limited number of builders.

A downturn in the commercial real estate market could increase delinquencies, defaults and foreclosures and significantly impair the value of our collateral, hindering our ability to sell the collateral upon foreclosure.

Builders with multiple loans heighten these risks, as adverse developments in one credit relationship can increase overall exposure.

During the term of some of our construction loans, borrowers do not make payments, as accumulated interest is added to the principal through an interest reserve.

Consequently, repayment often depends on the project's success and the borrower's ability to sell or lease the property rather than solely on repayment capacity.

During the terms of some of our construction loans, borrowers do not make payments, as accumulated interest is added to the principal balance through an interest reserve.

Consequently, repayment

often depends on the project's success and the borrower's ability to sell or lease the property rather than solely on repayment capacity.

Overstating project value, declining market conditions, or falling rental rates could result in insufficient collateral to secure loan repayment post-construction.

Additionally, monitoring the building process requires on-site inspections and cost comparisons, adding to administrative costs.

Properties under construction are generally difficult to sell and often must be completed before a successful sale can occur, complicating the management of problem loans.

Some construction loans include interest reserves, where accumulated interest is added to the loan principal rather than requiring borrower payments during the loan term.

Rising market interest rates can rapidly deplete these reserves before project completion and increase borrowing costs for end-purchasers, potentially reducing their ability to finance the home or diminishing demand for the project.

Properties under construction are also generally difficult to sell and often must be completed before a successful sale can occur, complicating the management of problem loans.

If we foreclose on a defaulted construction loan during or before project completion, we might not recover the unpaid balance, accrued interest, or foreclosure costs.

17 unchanged sentences

Repayment is dependent upon the successful operation of the business, which is greatly dependent on many things outside the control of either us or the borrowers.

These factors include adverse weather conditions that prevent the planting of a crops or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, tariffs and environmental regulations).

These factors include adverse weather conditions that prevent the planting of crops or limit crop yields (such as hail, drought and floods), increasing climate variability and extreme weather events, loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally), supply chain disruptions, and the impact of government regulations (including changes in price supports, subsidies, tariffs and environmental regulations, water usage restrictions, labor regulations, and environmental compliance requirements).

Rising input costs, including fuel, fertilizer, labor, insurance, and equipment, may also adversely affect farm profitability and cash flows.

In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect the successful operation of the farm.

1 unchanged sentence

Consequently, agricultural loans may involve a greater degree of risk than other types of loans, particularly in the case of loans that are unsecured or secured by rapidly depreciating assets such as farm equipment (some of which is highly specialized with a limited or no market for resale), or assets such as livestock or crops.

In such cases, any repossessed collateral for a defaulted agricultural operating loan may not provide an adequate source of repayment of

the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation or because the assessed value of the collateral exceeds the eventual realization value.

In such cases, any repossessed collateral for a defaulted agricultural operating loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater

likelihood of damage, loss or depreciation, or because the assessed value of the collateral exceeds the eventual realization value.

The success of our SBA lending program is dependent upon the continued availability of SBA loan programs, our status as a preferred lender under the SBA loan programs and our ability to comply with applicable SBA lending requirements.

As an SBA Preferred Lender, we streamline the SBA loan process for clients by bypassing the lengthy approval procedures required for non-Preferred Lenders.

The SBA periodically reviews participating lenders to evaluate risk management practices.

The SBA periodically reviews participating lenders to evaluate risk management practices and compliance with evolving program requirements.

If deficiencies are identified, the SBA may request corrective actions, impose restrictions, or revoke a lender’s Preferred Lender status.

Losing this status could impair our ability to compete with other Preferred Lenders and materially affect our financial results.

Additionally, changes to the SBA program, such as adjustments to federal guaranty levels or funding allocations, could adversely impact our business, results of operations, and financial condition.

Additionally, changes to the SBA program, such as adjustments to federal guaranty levels, program eligibility requirements, or funding allocations, including as a result of legislative, budgetary, or policy changes, could adversely impact our business, results of operations, and financial condition.

Historically, we have sold the guaranteed portion of our SBA 7(a) loans in the secondary market.

1 unchanged sentence

For the year ended December 31, 2025, we sold a total of $2.2 million in SBA loans (guaranteed portion) for a net gain of $152,000.

There can be no assurance that we will be able to continue originating these loans, that a secondary market will continue to exist, or that we will continue to realize premiums on future sales.

Selling the guaranteed portion of SBA loans also exposes us to credit risk on the retained, non-guaranteed portion.

There can be no assurance that we will be able to continue originating these loans, that a secondary market will continue to exist, that investor demand or market liquidity will remain at current levels, or that we will continue to realize premiums on future sales.

Selling the guaranteed portion of SBA loans also exposes us to credit risk on the retained, non-guaranteed portion, as well as interest rate and valuation risk on loans held for sale prior to disposition.

To qualify for an SBA loan, a borrower must demonstrate an inability to secure conventional financing without the SBA guaranty.

Accordingly, SBA loans in our portfolio often have weaker credit characteristic compared to other loans, increasing the risk of default during economic downturns or borrower financial distress.

If a loan defaults and the SBA determines there were deficiencies in how the loan was originated, funded, or serviced, the SBA may deny or reduce its guaranty, require us to repurchase the sold portion, or seek recovery of losses.

Accordingly, SBA loans in our portfolio often have weaker credit characteristics compared to other loans, increasing the risk of default during economic downturns, periods of elevated interest rates, or borrower financial distress.

If a borrower defaults and the SBA determines there were deficiencies in how the loan was originated, funded, or serviced, the SBA may deny or reduce its guaranty, require us to repurchase the sold portion, delay payment on the guaranty, or seek recovery of losses.

We have established a recourse reserve to cover estimated losses on the outstanding guaranteed portion of SBA loans.

5 unchanged sentences

Further, when determining the purchase price for these loans, management will make certain assumptions about, among other things, whether and when borrowers will prepay their loans, real estate market conditions, and our ability to successfully manage loan collections and, if necessary, dispose of acquired real estate through foreclosure.

To the extent that our underlying assumptions prove inaccurate or undergo unexpected changes, such as an unanticipated decline in the real estate market, the purchase price paid these loans could exceed the actual value, resulting in a lower yield or a loss of some or all of the loan principal.

To the extent that our underlying assumptions prove inaccurate or undergo unexpected changes, such as an unanticipated decline in the real estate market, the purchase price paid for these loans could exceed the actual value, resulting in a lower yield or a loss of some or all of the loan principal.

For instance, purchasing loan "pools" at a premium and experiencing earlier-than-expected loan prepayments would yield lower interest income than initially projected.

Our success in growing our loan portfolio through loan purchases depends on our ability to price the loans properly and relies on the economic conditions in the geographic areas where the underlying properties or collateral for the acquired loans are located.

Inaccurate estimates or declines in economic conditions or real estate values in the markets where we purchase loans could significantly adversely affect the level of our nonperforming loans and our results of operations.

4 unchanged sentences

In determining the amount of the allowance for credit losses on loans, we review loans and our historical loss and delinquency experience and evaluate economic conditions.

Management also recognizes that significant new growth in loan portfolios, new loan products, and the refinancing of existing loans can result in portfolios comprised of unseasoned loans that may not perform consistently with a historical or projected manner and will increase the risk that our allowance for credit losses on loans may be insufficient to absorb credit losses without significant additional provisions.

If our assumptions are incorrect, our allowance for credit losses on loans may not be sufficient to cover actual losses, requiring additional provisions for credit losses on loans to replenish the allowance for credit losses on loans.

Deterioration in economic conditions, new information regarding existing loans, identification of additional problem loans or relationships, and other factors, both within and outside of our control, may increase our loan charge-offs and/or otherwise require an increase in our provision for credit losses on loans.

Environmental and climate-related events, such as wildfires, flooding, mudslides, hurricanes, or other natural disasters, including recent events in our market regions, may adversely affect borrowers’ ability to repay loans, reduce collateral values, and increase uncertainty in estimating credit losses.

Wildfires, in particular, pose significant risks to our loan portfolio and allowance for credit losses.

While recent wildfires in Southern California that began in January 2025 do not appear to have materially affected our borrowers, future wildfires could cause borrower financial distress, impair repayment capacity, and increase loan defaults.

Damage to or destruction of collateral, inadequate or unavailable insurance coverage, denied claims, rising insurance costs, and related economic disruptions, including business closures and job losses, could further increase credit risk.

Our concentration of loans in wildfire-prone areas and the increasing frequency and severity of wildfires may heighten long-term credit risk and require increases to our allowance for credit losses, which could materially adversely affect our business, financial condition, and results of operations.

In addition, bank regulatory agencies periodically review our allowance for credit losses on loans.

1 unchanged sentence

Any increase in the provision for credit losses on loans negatively affects net income and could materially impact our financial condition, results of operations, and capital.

Wildfires present significant risks to our loan portfolio and the adequacy of our allowance for credit losses.

While the recent wildfires in Southern California that began in January 2025 do not appear to have directly impacted our borrowers in any material respects, future wildfires could lead to heightened financial distress.

Borrowers affected by these fires may experience financial hardship, which could decrease their repayment capacity and increase the likelihood of loan defaults.

Damage to or destruction of properties securing loans could lead to a depreciation in collateral values, further increasing the risk of potential losses.

In addition, inadequate insurance coverage or denied claims may hinder recovery efforts and add uncertainty to our ability to accurately estimate credit losses.

Local economic disruptions, including business closures and job losses caused by these disasters, may also affect borrowers' ability to meet their financial obligations, necessitating adjustments to our credit loss assumptions.

Our concentration of loans in wildfire-prone areas further amplifies our exposure, and the growing frequency and intensity of wildfires heightens our long-term credit risks.

This may require increases to our allowance for credit losses in future periods.

While we continue to assess and adjust our allowance to reflect current and anticipated risks, there can be no guarantee it will fully cover actual losses, especially given the ongoing uncertainties and challenges associated with wildfires.

In addition to the lending-related risks discussed above, many of our offices are located, and many of our employees reside, in wildfire-prone areas.

Damage to or destruction of our offices and/or our employees’ homes caused by wildfires could be materially disruptive to our operations.

Risks Related to Market and Interest Rate Changes

2 unchanged sentences

Interest rates are highly sensitive to factors beyond our control, such as general economic conditions and policies set by governmental and regulatory bodies, particularly the Federal Reserve.

Increases in interest rates could

reduce our net interest income, weaken the housing market by curbing refinancing activity and home purchases, and negatively affect the broader U.S.

Increases in interest rates could reduce our net interest income, weaken the housing market by curbing refinancing activity and home purchases, and negatively affect the broader U.S.

economy, potentially leading to slower economic growth or recessionary conditions.

We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities.

We principally manage interest rate risk by managing our volume and mix of earning assets and funding liabilities.

If we are unable to manage this risk effectively, our business, financial condition and results of operations could be materially affected.

Our net interest margin, the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities, can be adversely affected by interest rate changes.

While yields on assets and costs of liabilities tend to move in the same direction, they may do so at different speeds, causing the margin to expand or contract.

As our interest-bearing liabilities often have shorter durations than our interest-earning assets, a rise in interest rates may lead to funding costs increasing faster than asset yields, compressing our net interest margin.

Additionally, changes in the slope of the yield curve, such as flattening or inversion, can further pressure our margins as funding costs rise relative to asset yields.

Conversely, falling rates can increase loan prepayments, leading to reinvestment in lower-yielding assets, reducing income.

In a rising rate environment, retaining deposits can become costlier.

At December 31, 2024, our deposit composition included $485.2 million in certificates of deposit maturing within one year and $1.7 billion in noninterest-bearing, NOW checking, savings, and money market accounts.

While yields on assets and costs of liabilities tend

to move in the same direction, they may do so at different speeds, causing the margin to expand or contract.

Because our interest-bearing liabilities often have shorter durations than our interest-earning assets, rising rates may increase funding costs faster than asset yields, compressing our net interest margin.

Periods of volatile, elevated, or declining rates may affect net interest income in multiple ways.

For example, floating-rate assets generally reprice more quickly than deposits, potentially reducing net interest income in falling rate environments.

Changes in borrower refinancing behavior, including increased loan prepayments and mortgage-backed security redemptions, introduce reinvestment risk, as prepaid amounts may need to be reinvested at lower rates.

Additionally, changes in the shape of the yield curve, such as flattening or inversion, can compress margins, particularly for institutions with significant fixed-rate assets.

Rising rates can also increase the cost of deposits and other funding sources.

If deposit and borrowing rates rise faster than loan and investment yields, our net interest income and overall earnings could decline.

1 unchanged sentence

Additionally, a significant portion of our adjustable-rate loans include interest rate floors that prevent the loan’s contractual interest rate from falling below a specified level.

At December 31, 2024, approximately $1.3 billion, or 67.4% of our loan portfolio consisted of adjustable or floating-rate loans, and approximately $992.5 million, or 75.4%, of those adjustable or floating-rate loans contained interest rate floors.

The presence of interest rate floors can increase income during periods of declining interest rates, as the rates on these loans cannot adjust downward below the floor.

However, this benefit is subject to the risk that borrowers may refinance these loans to take advantage of lower rates.

Furthermore, when loans are at their floor interest rates, our interest income may not rise as quickly as our cost of funds during periods of increasing interest rates, which could materially and adversely affect our results of operations.

While interest rate floors may increase or stabilize interest income during periods of declining interest rates, they may also limit growth in interest income during periods of rising rates and increase the likelihood that borrowers will refinance when market rates decline.

At December 31, 2025, approximately $1.4 billion, or 67.1% of our loan portfolio consisted of adjustable or floating-rate loans, and approximately $1.0 billion, or 51.1%, of those adjustable or floating-rate loans contained interest rate floors.

Furthermore, when loans are at their floor interest rates, our interest income may not rise as quickly as our cost of funds during periods of increasing interest rates, which could compress net interest margin and materially and adversely affect our results of operations.

While we employ asset and liability management strategies to mitigate interest rate risk, unexpected, substantial, or prolonged rate changes could materially affect our financial condition and results of operations.

3 unchanged sentences

Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings.

These fluctuations may result from changes in market interest rates, rating agency actions, issuer defaults, issues with underlying securities, lower market prices, or limited investor demand.

These fluctuations may result from changes in market interest rates, rating agency actions, issuer defaults, issues with underlying securities, changes in market prices, or changes in investor demand.

Our available-for-sale debt securities in an unrealized loss position are evaluated to determine whether the decline in fair value has resulted from credit losses or other factors.

4 unchanged sentences

Decreases in the fair value of securities available-for-sale resulting from increases in interest rates could have an adverse effect on shareholders’ equity.

Additionally, there is no assurance that the declines in market value will not result in credit losses, which would lead to additional provisions for credit losses that could materially affect our net income and capital levels.

Additionally, there is no assurance that the declines in market value will not result in credit losses, which would lead to additional provisions for credit losses that could have a material adverse effect on our net income and capital levels.

Risks Related to our Merger and Acquisition Strategy

21 unchanged sentences

Challenges related to the conversion and integration of financial and client data.

Borrowing funds or alternative financing methods, such as issuing common or convertible preferred stock, that may increase leverage, diminish liquidity, and result in dilution for existing shareholders.

Borrowing funds or alternative financing methods, such as issuing common or convertible preferred stock, which may increase leverage, diminish liquidity, and result in dilution for existing shareholders.

Risks of impairment to goodwill, which would require a charge to earnings.

13 unchanged sentences

Our evaluation of the fair value of goodwill involves a substantial amount of judgment.

If our judgment were incorrect, or if events or circumstances change, and an impairment of goodwill was deemed to exist, we would be required to write down our goodwill, resulting in a charge against operations, which may materially adversely affect our results of operations.

If our judgment were incorrect, or if events or circumstances change, and an impairment of goodwill was deemed to exist, we would be required to write down our goodwill, resulting in a charge against earnings, which may materially adversely affect our results of operations.

Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates, which, if incorrect, could cause unexpected losses in the future.

1 unchanged sentence

Management must exercise judgment in selecting and applying many of these accounting policies and methods so that they comply with generally accepted accounting principles and reflect management’s judgment regarding the most appropriate manner to report our financial condition and results of operations.

In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances, yet might result in us reporting materially different results than would have been reported under a different alternative.

In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which might be reasonable under the circumstances, yet might result in our reporting materially different results than would have been reported under a different alternative.

Certain accounting policies, most notably the allowance for credit losses, are critical to presenting our financial condition and results of operations.

7 unchanged sentences

Regulatory bodies regularly issue new guidance, altering accounting rules and reporting requirements, which can substantially affect the preparation and presentation of our financial statements.

These changes may require retrospective application, potentially leading to restatements of prior period financial statements.

One significant change impacting our operations is the Current Expected Credit Loss (CECL) model, which we adopted on January 1, 2023.

Under CECL, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, are presented at the net amount expected to be collected.

This forward-looking approach estimates expected credit losses by considering historical experience, current conditions, and reasonable forecasts affecting collectability.

The model contrasts with the previous "incurred loss" methodology under GAAP, which recognized losses only when they were probable.

While CECL improves the timeliness of recognizing credit losses, its reliance on macroeconomic forecasts introduces potential earnings volatility due to unexpected changes in economic indicators.

Additionally, CECL creates an accounting asymmetry:

loan-related income is recognized periodically using the effective interest method, while expected credit losses are recognized upfront at origination.

This asymmetry may give the impression of reduced profitability during periods of loan growth due to the immediate recognition of expected losses, and relatively higher profitability during periods of stable or declining loan volumes, as income continues to accrue for loans with previously recognized losses.

These changes may require enhanced judgments, additional data collection, new internal controls, or retrospective application, potentially leading to restatements of prior period financial statements or increased compliance costs .

Under the Current Expected Credit Loss (“CECL”) model, which we currently apply, financial assets carried at amortized cost, such as loans and held-to-maturity debt securities, are presented at the net amount expected to be collected.

This forward-looking approach estimates expected credit losses by considering historical experience, current conditions, and reasonable and supportable forecasts affecting collectability.

CECL contrasts with the prior “incurred loss” methodology under GAAP, which recognized losses only when they were probable.

While CECL improves the timeliness of recognizing credit losses, its reliance on macroeconomic assumptions and forecasts may continue to introduce earnings volatility, particularly during periods of economic uncertainty, interest rate volatility, or changing credit conditions.

In addition, CECL creates an accounting asymmetry:

loan-related income is recognized periodically using the effective interest method, while expected credit losses are recognized up front.

This asymmetry may give the impression of reduced profitability during periods of loan growth, particularly in higher-risk or rapidly changing economic environments, and relatively higher profitability during periods of stable or declining loan volumes, as income continues to accrue on loans with previously recognized losses.

Risks Related to Cybersecurity, Third Parties and Technology

3 unchanged sentences

Our operations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks.

Although we take protective measures and endeavor to modify them as circumstances warrant, the security of our computer systems, software, and networks may be vulnerable to breaches, fraudulent or unauthorized access, denial or degradation of service, attacks, misuse, computer viruses, malware, or other malicious code and cyber-attacks that could have a security impact.

If one or more of these events occur, this could jeopardize our or our clients’ confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our clients or counterparties.

The security of our computer systems, software, and networks may be vulnerable to breaches, fraudulent or unauthorized access, denial or degradation of service, attacks, misuse, computer viruses, malware, or other malicious code and cyber-attacks that could result in the loss, misappropriation, or exposure of sensitive information and disruption of operations.

If one or more of these events occur, our or our clients’ confidential information may be compromised, and our operations and those of our clients and counterparties may be disrupted.

We may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us.

Security breaches in our internet banking activities could further expose us to possible liability and damage our reputation.

Security breaches in our internet banking activities may expose us to liability, loss of business, and damage to our reputation.

Increases in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third party technologies (including browsers and operating systems), or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions, and to protect data about us, our clients, and underlying transactions.

Any compromise of our security could deter clients from using our internet banking services that involve the transmission of confidential information.

Although we have developed and continue to invest in systems and processes that are designed to detect and prevent security breaches and cyber-attacks and periodically test our security, these precautions may not protect our systems from compromises or breaches of our security measures, and could result in losses to us or our clients, our loss of business and/or clients, damage to our reputation, the incurrence of additional expenses, disruption to our business, our inability to grow our online services, or other businesses, additional regulatory scrutiny or penalties, or our exposure to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, financial condition and results of operations.

Any compromise of our security may result in loss of clients and business, disruption of operations, financial loss, or damage to our reputation.

These events could have a material adverse effect on our business, financial condition and results of operations.

Our security measures may not protect us from system failures or interruptions.

1 unchanged sentence

In addition, we outsource certain aspects of our data processing and other operational functions to certain third-party providers.

While we select third-party vendors carefully, we do not control their actions.

If our third-party providers encounter difficulties, including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher transaction volumes, cyber-attacks or security breaches or if we otherwise have difficulty in communicating with them, our ability to adequately process and account for transactions could be affected, and our ability to deliver products and services to our clients and otherwise conduct business operations could be adversely impacted.

Replacing these third-party vendors could also entail significant delay and expense.

Threats to information security also exist in the processing of client information through various other vendors and their personnel.

We cannot assure you that such breaches, failures or interruptions will not occur or, if they do occur, that they will be adequately addressed by us or the third parties on which we rely.

Further, while we believe we maintain adequate insurance to cover these risks, our insurance coverage may not cover all losses resulting from breaches, system failures or other disruptions.

The occurrence of any systems failure or interruption could damage our reputation and result in a loss of clients and business, could subject us to additional regulatory scrutiny, or could expose us to legal liability.

If our third-party providers encounter difficulties, including breakdowns or disruptions in communication services, failure to handle transaction volumes, cyber-attacks or security breaches, or if we otherwise have difficulty in communicating with them, our ability to adequately process and account for transactions will be affected, and our ability to deliver products and services and conduct operations will be disrupted.

Replacing these third-party vendors may cause significant delays and expenses.

Threats to information security also exist in the processing of client information through other vendors and their personnel.

If such breaches, failures, or interruptions occur, we may be unable to prevent or mitigate their impact.

Further, insurance may not cover all losses resulting from breaches, system failures, or other disruptions.

The occurrence of any system failure or interruption may damage our reputation, result in loss of clients and business, subject us to regulatory scrutiny, and expose us to legal liability.

Any of these occurrences could have a material adverse effect on our financial condition and results of operations.

Our current and future uses of Artificial Intelligence (AI) and other emerging technologies may create additional risks.

The increasing adoption of AI in financial services presents significant opportunities but also introduces a range of risks that could impact our operations, regulatory compliance, and customer trust.

The increasing adoption of AI in financial services presents a range of risks that could impact our operations, regulatory compliance, and customer trust.

AI introduces model risk, where flawed algorithms or biased data could result in inaccurate credit decisions, compliance violations, or discriminatory outcomes in lending or customer service.

Cybersecurity threats, such as data breaches, adversarial attacks, and data

poisoning, pose significant challenges, particularly as these systems handle large volumes of sensitive customer information.

Cybersecurity threats, such as data breaches, adversarial attacks, and data poisoning, pose significant challenges, particularly as these systems handle large volumes of sensitive customer information.

Additionally, the opaque nature of some AI models, often referred to as "black-box" systems, raises regulatory compliance concerns, as regulators increasingly require transparency and explainability in AI-driven decision-making.

5 unchanged sentences

We are subject to certain risks in connection with our data management or aggregation.

We are reliant on our ability to manage data and our ability to aggregate data in an accurate and timely manner to ensure effective risk reporting and management.

Our ability to manage data and aggregate data may be limited by the effectiveness of our policies, programs, processes and practices that govern how data is acquired, validated, stored, protected and processed.

While we continuously update our policies, programs, processes and practices, many of our data management and aggregation processes are manual and subject to human error or system failure.

Failure to manage data effectively and to aggregate data in an accurate and timely manner may limit our ability to manage current and emerging risks, as well as to manage changing business needs.

We are reliant on our ability to manage data and our ability to aggregate data in an accurate and timely manner to ensure effective risk reporting and decision-making.

Deficiencies in how data is acquired, validated, stored, protected, or processed, as well as the manual nature of many of our data management and aggregation processes, could lead to human error or system failures.

Inaccurate, incomplete, or delayed data could limit our ability to identify, measure, and manage current and emerging risks, impair management decision-making, and hinder our ability to respond to changing business conditions.

These shortcomings could also adversely affect our financial reporting, regulatory compliance, operational efficiency, and strategic initiatives.

Any of these outcomes could materially and adversely affect our business, financial condition, results of operations, and growth prospects.

Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.

7 unchanged sentences

The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services.

Our future success will depend, in part, on our ability to keep pace with technological changes and to use technology to satisfy and grow customer demand for our products and services and to create additional efficiencies in our operations.

Our future success will depend, in part, on our ability to keep pace with technological changes and to use technology to satisfy and increase customer demand for our products and services and to create additional efficiencies in our operations.

We expect that we will need to make substantial investments in our technology and information systems to compete effectively and to stay current with technological changes.

7 unchanged sentences

A financial institution may have a concentration in commercial real estate lending if, among other factors, (i) total reported loans for construction, land development and other land represent 100.0% or more of total capital, or (ii) total reported commercial real estate loans (as defined in the guidance) represent 300.0% or more of total capital.

The particular focus of the guidance is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).

conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).

The purpose of the guidance is to assist banks in developing risk management practices and capital levels commensurate with the level and nature of their real estate concentrations.

8 unchanged sentences

The significant federal and state banking regulations that affect us are described in this Form 10-K under the heading “Item 1.

Business — Supervision and Regulation.” These regulations, along with the currently existing tax, accounting, securities, insurance, privacy and monetary laws, regulations, rules, standards, policies and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures.

Business — Supervision and Regulation.” These regulations, along with the currently existing tax, accounting, securities, insurance, privacy and monetary laws, regulations, rules, standards, and policies and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures.

These laws, regulations, rules, standards, policies, and interpretations are constantly evolving and may change significantly over time.

Any new regulation or legislation, or change in existing regulation or oversight, whether a change in regulatory policy or a change in a regulator’s interpretation of a law or regulation, could have a material impact on our operations, increase our costs of regulatory compliance and of doing business and adversely affect our profitability.

For example, changes in consumer privacy laws, such as the recently enacted CCPA and CPRA in California, or any non-compliance with such laws, could adversely affect our business, financial condition and results of operations.

For example, changes in consumer privacy laws, such as the recently enacted CCPA and CPRA in California, other state privacy statutes, or any future federal privacy legislation, or any non-compliance with such laws, could adversely affect our business, financial condition and results of operations.

Business—Supervision and Regulation—Privacy Standards” for additional information on the CCPA and the CPRA.

Compliance with the CCPA, the CPRA and other state statutes or regulations designed to protect consumer personal data could potentially require us to implement substantive technology infrastructure and process changes.

Non-compliance with the CCPA, the CPRA or similar laws and regulations could lead to substantial regulatory imposed fines and penalties, damages from private causes of action and/or reputational harm.

Compliance with the CCPA, the CPRA, and other state or federal statutes or regulations designed to protect consumer personal data could require us to implement substantive technology infrastructure and process changes.

Non-compliance with these privacy laws or regulations could lead to substantial regulatory fines and penalties, damages from private causes of action or reputational harm.

Developments in regulatory interpretations or supervisory guidance may also require operational changes, additional expenditures, or restrictions on certain activities.

Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions.

4 unchanged sentences

Failure to comply with these regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions.

While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance can be given that these policies and procedures will be effective.

If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include the denial of regulatory approvals to proceed with certain aspects

of our business plan, including our acquisition plans.

Additionally, any perceived or actual failure to prevent money laundering or terrorist financing activities could significantly damage our reputation.

1 unchanged sentence

If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses.

Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing shareholder value.

We have established processes and procedures intended to identify, measure, monitor, report, analyze and control the types of risk to which we are subject.

These risks include liquidity risk, credit risk, market risk, interest rate risk, operational risk, legal and compliance risk, and reputational risk, among others.

We also maintain a compliance program designed to identify, measure, assess, and report on our adherence to applicable laws, policies and procedures.

While we assess and improve these programs on an ongoing basis, there can be no assurance that our risk management or compliance programs, along with other related controls, will effectively mitigate all risk and limit losses in our business.

However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified.

Our business is exposed to a broad range of risks, including liquidity, credit, market, interest rate, operational, legal and compliance, reputational, cybersecurity, climate-related, and other risks.

These risks may arise from internal factors, the actions of third parties, changes in economic, market, or regulatory conditions, or other unforeseen events.

There may be risks that we have not anticipated or identified, and existing or emerging risks could result in substantial and unexpected losses.

If our risk management framework or processes prove ineffective, we may incur losses that could materially and adversely affect our business, financial condition, results of operations, and growth prospects.

Climate change and related legislative and regulatory initiatives may materially affect the Company’s business and results of operations.

The effects of climate change continue to raise significant concerns about the state of the environment.

However, under the new Trump administration, federal policy may shift to reduce the emphasis on climate change initiatives and environmental regulations.

This could include scaling back federal participation in international agreements, such as the Paris Agreement, and reducing regulatory pressures at the federal level on businesses, including banks, to address climate-related risks.

Legislative and regulatory proposals aimed at combating climate change may face greater scrutiny or diminished priority.

Federal and state policy approaches to climate change continue to evolve, and changes in legislative or regulatory priorities could alter the requirements and expectations placed on businesses, including banks, to address climate-related risks.

The lack of empirical data regarding the financial and credit risks posed by climate change still makes it difficult to predict its specific impact on our financial condition and results of operations.

3 unchanged sentences

Moreover, climate change may adversely affect regional and local economic activity, harming our customers and the communities in which we operate.

Regardless of changes in federal policy, the effects of climate change and their unknown long-term impacts could still have a material adverse effect on our financial condition and results of operations.

Regardless of changes in federal policy, the effects of climate change and their unknown long-term impacts could have a material adverse effect on our financial condition and results of operations.

Risks Related to Our Business and Industry Generally

We rely on other companies to provide key components of our business infrastructure.

We rely on numerous external vendors to provide products and services necessary for our day-to-day operations.

We rely on numerous external vendors for our day-to-day operations.

Accordingly, our operations are exposed to risks associated with vendor performance under service-level agreements.

2 unchanged sentences

Regulatory agencies also require financial institutions to remain accountable for all aspects of vendor performance, including activities delegated to third parties.

Additionally, disruptions or failures in the physical infrastructure or operating systems supporting our business and customers, or cyber-attacks or security breaches involving networks, systems, or devices used by our customers to access our services, could lead to client attrition, regulatory fines

or penalties, reputational damage, reimbursement or compensation costs, and increased compliance expenses.

Any of these outcomes could materially and adversely affect our financial condition and results of operations.

1 unchanged sentence

Maintaining sufficient liquidity is essential for the operation of our business.

We require sufficient liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on our debt obligations as they come due, and other cash commitments under both normal operating conditions and other unpredictable circumstances causing industry or general financial market stress.

We require liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on our debt obligations as they come due, and other cash commitments under both normal operating conditions and other unpredictable circumstances causing industry or general financial market stress.

Our access to funding sources in amounts adequate to finance our activities on terms that are acceptable to us could be impaired by factors that affect us specifically, or the financial services industry or economy generally.

Factors that could detrimentally impact our access to liquidity sources include a downturn in the geographic markets in which our loans and operations are concentrated or difficult credit markets.

Our access to deposits may also be affected by the liquidity needs of our depositors.

Our access to deposits

may also be affected by the liquidity needs of our depositors.

In particular, a majority of our liabilities are checking accounts and other liquid deposits, which are payable on demand or upon several days’ notice, while by comparison, a substantial majority of our assets are loans, which cannot be called or sold in the same time frame.

Although we have historically been able to replace maturing deposits and advances as necessary, we might not be able to replace such funds in the future, especially if a large number of our depositors seek to withdraw their accounts, regardless of the reason.

While in prior periods we have successfully replaced maturing deposits and borrowings, deposit balances across the banking industry have become more rate-sensitive and responsive to market perceptions, and future replacements may be challenged by shifts in our financial condition, FHLB of San Francisco’s status, or market conditions.

A failure to maintain adequate liquidity could materially and adversely affect our business, financial condition and results of operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity” of this Form 10-K.

Several of our large depositors have relationships with each other, which creates a higher risk that one client’s withdrawal of its deposit could lead to a loss of other deposits from clients within the relationship, which, in turn, could force us to fund our business through more expensive and less stable sources.

Several of our large depositors have relationships with each other, which creates a higher risk that one client’s withdrawal of its deposit could lead to a loss of deposits from other clients within the relationship, which, in turn, could force us to fund our business through more expensive and less stable sources.

As of December 31, 2025, our ten largest depositors, none of which include brokered deposits, accounted for $235.8 million in deposits, or approximately 11.7% of total deposits.

1 unchanged sentence

At December 31, 2025, $590.9 million, or 26.7%, of our total deposits were comprised of deposits from labor unions, representing 785 different local unions with an average deposit balance per local union of approximately $753,000.

At December 31, 2024, 20 labor unions had aggregate deposits of $10.0 million or more, totaling $385.3 million, or 18.1% of our total deposits.

Given our use of these high average balance deposits as a source of funds, the inability to retain these funds could have an adverse effect on our liquidity.

At December 31, 2025, 20 labor unions had aggregate deposits with us of $10.0 million or more, totaling $385.3 million, or 17.4% of our total deposits.

Given our use of these high average balance deposits as a source of funds, the inability to retain them could have an adverse effect on our liquidity.

In addition, these deposits are primarily demand deposit accounts or short-term deposits and therefore may be more sensitive to changes in interest rates.

If we are forced to pay higher rates on these deposits to retain the funds, or if we are unable to retain the funds and are forced to turn to borrowings and other funding sources for our lending and investment activities, the interest expense associated with such borrowings or other funding sources may be higher than the rates we are paying on these deposits, which could adversely affect our net margin and net income.

If we are forced to pay higher rates on these deposits to retain them, or if we are unable to retain them and are forced to turn to borrowings and other funding sources for our lending and investment activities, the interest expense associated with such borrowings or other funding sources may exceed the cost of these deposits, which could adversely affect our net interest margin and net income.

We may also be forced, as a result of any material withdrawal of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources.

Consequently, the occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.

Any of these occurrences could have a material adverse effect on our business, financial condition, and results of operations.

Our growth or future losses may require us to raise additional capital in the future, but that capital may not be available when it is needed, or the cost of that capital may be exceedingly high.

We are required by regulatory authorities to maintain adequate levels of capital to support our operations.

We anticipate that our capital resources will satisfy our capital requirements for the foreseeable future.

We anticipate that our capital resources will enable us to satisfy our capital requirements for the foreseeable future.

Nonetheless, we may at some point need to raise additional capital to support continued growth or be required by our regulators to increase our capital resources.

1 unchanged sentence

Accordingly, we may not be able to raise additional capital, if needed, on terms that are acceptable to us.

If we cannot raise additional capital when needed, our operations could be materially impaired and our financial condition and

liquidity could be materially and adversely affected.

If we cannot raise additional capital when needed, our operations could be materially impaired, and our financial condition and liquidity could be materially and adversely affected.

In addition, if we are unable to raise additional capital when required by our banking regulators, we may be subject to additional adverse regulatory action.

1 unchanged sentence

BayCom is a legal entity separate and distinct from the Bank.

A substantial portion of BayCom’s cash flow, including cash flow to pay principal and interest on any debt it may incur, including the Notes, comes from dividends BayCom receives from the Bank.

A substantial portion of BayCom’s cash flow, including cash flow to pay principal and interest on any debt it may incur, comes from dividends BayCom receives from the Bank.

Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to BayCom.

1 unchanged sentence

Also, BayCom’s right to participate in the distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.

In the event the Bank is unable to pay dividends to BayCom, we may not be able to service any debt we may incur, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In the event the Bank is unable to pay dividends to BayCom, BayCom may not be able to service any debt it

may incur, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We rely heavily on our management team and could be adversely affected by the unexpected loss of key officers and relationship managers.

5 unchanged sentences

If key personnel become unavailable for any reason, we may face challenges in promptly identifying and hiring suitable replacements on acceptable terms, which could adversely affect our business, financial condition, and results of operations.

I ncreasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights.

Increased ESG-related compliance costs could result in increases to our overall operational costs.

S crutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

In recent years, companies have faced scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds, and influential investors are also focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights.

ESG-related compliance costs could result in increases to our overall operational costs.

Failure to adapt to or comply with regulatory requirements, or investor or stakeholder expectations and standards, could negatively impact our reputation, ability to do business with certain partners, and our stock price.

Recent changes in the regulatory landscape under the new Trump administration have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion (“DEI”).

This shift is leading to the rollback of regulations that mandate specific disclosures and operational practices in these areas.

Recent changes in the regulatory landscape and shifting federal priorities have moved toward a reduction in emphasis on certain ESG priorities, particularly around climate change and diversity, equity, and inclusion (“DEI”).

This shift has led to a rollback of regulations that mandate specific disclosures and operational practices in these areas.

However, some stakeholder groups continue to demand greater transparency and action, resulting in a complex and potentially conflicting environment for companies.

2 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-K

Item 1A. Risk Factors