What changed in this filing

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Item 1. Financial Statements

2025-10-31 compared with 2025-08-01 · 193 added, 178 removed, 879 unchanged (30% of the section changed)

3 unchanged sentences

(dollars in thousands)

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

Allowance for credit losses on loans

Foreclosed assets

Premises and equipment, net

18 unchanged sentences

24,000,000 shares authorized;

13,681,828 and 14,223,046 shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively

13,482,458 and 14,223,046 shares issued and outstanding at September 30, 2025, and December 31, 2024, respectively

Additional paid-in capital

6 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, and 2024

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025, and 2024

(dollars in thousands, except per share data, unaudited)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Interest and dividend income

13 unchanged sentences

Credit loss (benefit) expense - unfunded commitments

Credit loss benefit - debt securities held-to-maturity

Net interest income after credit loss expense

4 unchanged sentences

Increase in cash surrender value of life insurance

Earnings on separate account life insurance

Total noninterest income

Noninterest expense

Salaries and employee benefits

Salaries and benefits

Occupancy and equipment costs

14 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, and 2024

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025, and 2024

(dollars in thousands, unaudited)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Other comprehensive income, net of tax:

5 unchanged sentences

(1) Amounts are included in net gains on investment securities available-for-sale on the Consolidated Statements of Income in noninterest income.

There were no income tax expenses associated with the reclassification adjustment for the three months ended June 30, 2025, and 2024.

Income tax expenses (benefits) associated with the reclassification adjustment for the six months ended June 30, 2025, and 2024 were $ 37 thousand and $( 852 ) thousand, respectively.

There were no income tax expenses associated with the reclassification adjustment for the three months ended September 30, 2025, and 2024.

Income tax expenses (benefits) associated with the reclassification adjustment for the nine months ended September 30, 2025, and 2024 were $ 37 thousand and $( 831 ) thousand, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JUNE 30, 2025, and 2024

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025, and 2024

(dollars in thousands, except per share data, unaudited)

2 unchanged sentences

(Loss) Income

Balance, March 31, 2024

Balance, June 30, 2024

Other comprehensive income, net of tax

Stock options exercised, net of shares surrendered for cashless exercises

Restricted shares withheld for taxes

Restricted stock forfeited / cancelled

Stock based compensation - stock options

Restricted stock vested in period

Stock based compensation - restricted stock

2 unchanged sentences

Cash dividends - $ 0.24 per share

Balance, September 30, 2024

Balance, June 30, 2025

Balance, March 31, 2025

Other comprehensive income, net of tax

2 unchanged sentences

Restricted stock forfeited / cancelled

Restricted stock vested in period

Stock based compensation - restricted stock

2 unchanged sentences

Cash dividends - $ 0.25 per share

Balance, June 30, 2025

Balance, September 30, 2025

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2025, and 2024

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025, and 2024

(dollars in thousands, except per share data, unaudited)

4 unchanged sentences

Other comprehensive income, net of tax

Stock options exercised, net of shares surrendered for cashless exercises

Restricted stock granted

7 unchanged sentences

Cash dividends - $ 0.70 per share

Balance, June 30, 2024

Balance, September 30, 2024

Balance, December 31, 2024

10 unchanged sentences

Cash dividends - $ 0.75 per share

Balance, June 30, 2025

Balance, September 30, 2025

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2025, AND 2024

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025, AND 2024

(dollars in thousands, unaudited)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

5 unchanged sentences

Provision for credit losses on loans

(Benefit) provision for credit losses on held-to-maturity securities

Provision for credit losses on unfunded commitments

4 unchanged sentences

Amortization of core deposit intangible

Increase in interest receivable and other assets

Decrease in other liabilities

Deferred income tax benefit

Decrease (increase) in interest receivable and other assets

(Decrease) increase in other liabilities

Deferred income tax benefit (provision)

Decrease in value of restricted bank equity securities

14 unchanged sentences

Purchase of split dollar life insurance policies

Investments in variable interest entities

Proceeds from BOLI death benefit

9 unchanged sentences

Net cash provided by (used in) financing activities

Increase in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents

3 unchanged sentences

Interest paid

Income taxes paid

Supplemental schedule of noncash investing and financing activities:

Real estate acquired through foreclosure

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Note 1 – The Business of Sierra Bancorp

2 unchanged sentences

The Company exists primarily for the purpose of holding the stock of the Bank and of such other subsidiaries it may acquire or establish.

As of June 30, 2025, the Company’s only other subsidiaries were Sierra Statutory Trust II, Sierra Capital Trust III, and Coast Bancorp Statutory Trust II, which were formed solely to facilitate the issuance of capital trust pass-through securities (“TRUPS”).

As of September 30, 2025, the Company’s only other subsidiaries were Sierra Statutory Trust II, Sierra Capital Trust III, and Coast Bancorp Statutory Trust II, which were formed solely to facilitate the issuance of capital trust pass-through securities (“TRUPS”).

Pursuant to the Financial Accounting Standards Board (“FASB”) standard on the consolidation of variable interest entities, these trusts are not reflected on a consolidated basis in the Company’s financial statements.

7 unchanged sentences

To support organic growth in the commercial lending sectors the Bank opened a loan production office in Templeton, CA in April 2022.

The Company had total assets of $ 3.8 billion at June 30, 2025.

The Company’s deposit accounts, which totaled $ 3.0 billion at June 30, 2025, are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to maximum insurable amounts.

The Company had total assets of $ 3.7 billion at September 30, 2025.

The Company’s deposit accounts, which totaled $ 2.9 billion at September 30, 2025, are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to maximum insurable amounts.

Note 2 – Basis of Presentation

4 unchanged sentences

Such adjustments can generally be considered as normal and recurring unless otherwise disclosed in this Form 10-Q.

In preparing the accompanying financial statements, Management has taken subsequent events into consideration, through August 1, 2025, and recognized them where appropriate.

In preparing the accompanying financial statements, Management has taken subsequent events into consideration, through October 31, 2025, and recognized them where appropriate.

The results of operations in the interim statements are not necessarily indicative of the results that may be expected for any other quarter, or for the full year.

47 unchanged sentences

The 2023 Plan replaced the Company’s 2017 Stock Incentive Plan (the “2017 Plan”).

Options to purchase 161,593 shares granted under the 2017 Plan and options to purchase 56,897 shares that were granted under the 2007 Plan were still outstanding as of June 30, 2025 and remain unaffected by that plan’s expiration.

Options to purchase 157,400 shares granted under the 2017 Plan and options to purchase 52,000 shares that were granted under the 2007 Plan were still outstanding as of September 30, 2025, and remain unaffected by that plan’s expiration.

The 2023 Plan provides for the issuance of various types of equity awards, including options, stock appreciation rights, restricted stock awards, restricted share units, performance share awards, dividend equivalents, or any combination thereof.

Such awards may be granted to officers and employees as well as non-employee directors, which may be granted on such terms and conditions as are established by the Board of Directors or the Compensation Committee in its discretion.

The total number of shares of the Company’s authorized but unissued stock reserved for issuance pursuant to awards under the 2023 Plan was initially 360,000 shares, and the number remaining available for grant as of June 30, 2025 was 251,739 .

Any unexercised, unvested, or undistributed portion of any expired, cancelled, terminated, or forfeited awards under the Company’s 2017 Plan are added to the number of shares available to grant under the 2023 Plan.

There were 55,781 unvested Restricted Stock Awards issued under the 2017 Plan and 154,604 unvested Restricted Stock Awards issued under the 2023 Equity Compensation Plan at June 30, 2025, and are included in shares outstanding.

There were 28,920 unvested Restricted Stock Awards issued under the 2017 Plan and 137,904 unvested Restricted Stock Awards issued under the 2023 Equity Compensation Plan at September 30, 2025, and are included in shares outstanding.

The potential dilutive impact of unexercised stock options and unvested restricted stock is discussed below in Note 5, Earnings per Share.

2 unchanged sentences

Forfeitures are reflected in compensation costs as they occur for both types of awards.

A pre-tax charge of $ 0.5 million was reflected in the Company’s income statement during the second quarters of 2025 and 2024, as expense related to stock options and restricted stock awards.

For the first half of both, 2025 and 2024, the charges totaled $ 1.0 million.

A pre-tax charge of $ 0.4 million was reflected in the Company’s income statement during the third quarters of 2025 and 2024, as expense related to stock options and restricted stock awards.

For the first nine months of 2025 and 2024, the charges totaled $ 1.5 million and $ 1.4 million, respectively.

Restricted Stock Grants

4 unchanged sentences

These awards are expensed on a straight-line basis over the vesting period and consider the probability of meeting the performance criteria.

There were 62,692 shares granted to employees of the Company during the first six months of 2025.

As of June 30, 2025, there was $ 2.9 million of unamortized compensation cost related to unvested Restricted Stock Awards granted under the 2017 and 2023 plans.

There were 62,692 shares granted to employees of the Company during the first nine months of 2025.

As of September 30, 2025, there was $ 2.3 million of unamortized compensation cost related to unvested Restricted Stock Awards granted under the 2017 and 2023 plans.

That cost is expected to be amortized over a weighted average period of 2.1 years.

The Company’s restricted stock award activity for the six months ended June 30, 2025, and 2024 is summarized below (unaudited):

Six months ended June 30,

The Company’s restricted stock award activity for the nine months ended September 30, 2025, and 2024 is summarized below (unaudited):

Nine months ended September 30,

Weighted Average Grant-Date Fair Value

1 unchanged sentence

Unvested shares, January 1,

Unvested shares, June 30,

Unvested shares, September 30,

Stock Option Grants

2 unchanged sentences

The exercise price of each stock option is determined at the time of the grant and may be no less than 100 % of the fair market value of such stock at the time the option is granted.

The Company’s stock option activity during the six months ended June 30, 2025, and 2024 are summarized below (dollars in thousands, except per share data, unaudited):

Six months ended June 30,

The Company’s stock option activity during the nine months ended September 30, 2025, and 2024 are summarized below (dollars in thousands, except per share data, unaudited):

Nine months ended September 30,

Weighted Average

6 unchanged sentences

Forfeited/Expired

Outstanding at June 30,

Exercisable at June 30,

Outstanding at September 30,

Exercisable at September 30,

(1) The aggregate intrinsic value of stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option that would have been received by the option holders had all option holders exercised their options on the last day of the period.

2 unchanged sentences

The computation of earnings per share, as presented in the Consolidated Statements of Income, is based on the weighted average number of shares outstanding during each period, excluding unvested restricted stock awards.

There were 13,563,910 weighted average shares outstanding during the second quarter of 2025 and 14,300,267 during the second quarter of 2024, while there were 13,692,003 weighted average shares outstanding during the first six months of 2025 and 14,404,368 during the first six months of 2024.

There were 13,361,594 weighted average shares outstanding during the third quarter of 2025 and 14,188,051 during the third quarter of 2024, while there were 13,582,194 weighted average shares outstanding during the first nine months of 2025 and 14,331,032 during the first nine months of 2024.

Diluted earnings per share calculations include the effect of the potential issuance of common shares, which for the Company is limited to shares that would be issued on the exercise of “in-the-money” stock options, and unvested restricted stock awards.

For the second quarter of 2025, calculations under the treasury stock method resulted in the equivalent of 73,342 shares being added to basic weighted average shares outstanding for purposes of determining diluted earnings per share, while 265,885 shares were excluded from the calculation due to being underwater and thus anti-dilutive.

For the second quarter of 2024 the equivalent of 81,159 shares were added in calculating diluted earnings per share, while 260,924 anti-dilutive shares were not factored into the computation.

Likewise, for the first half of 2025 the equivalent of 85,003

shares were added to basic weighted average shares outstanding in calculating diluted earnings per share and a weighted average of 47,798 options that were anti-dilutive for the period were not included, compared to the addition of the equivalent of 63,109 shares and non-inclusion of 265,107 anti-dilutive options in calculating diluted earnings per share for first half of 2024.

For the third quarter of 2025, calculations under the treasury stock method resulted in the equivalent of 109,064 shares being added to basic weighted average shares outstanding for purposes of determining diluted earnings per share, while 83 shares were excluded from the calculation due to being underwater and thus anti-dilutive.

For the third quarter of 2024 the equivalent of 147,655 shares were added in calculating diluted earnings per share, while zero shares were excluded from the calculation due to being underwater and thus anti-dilutive.

Likewise, for the first nine months of

2025 the equivalent of 92,740 shares were added to basic weighted average shares outstanding in calculating diluted earnings per share and a weighted average of no options that were anti-dilutive for the period, compared to the addition of the equivalent of 106,754 shares and non-inclusion of 255,414 anti-dilutive options in calculating diluted earnings per share for first nine months of 2024.

Note 6 – Comprehensive Income

As presented in the Consolidated Statements of Comprehensive Income, comprehensive income includes net income and other comprehensive income.

The Company’s only source of other comprehensive income is unrealized gains and losses on available-for-sale investment securities.

The Company’s only source of other comprehensive income is unrealized gains and losses derived from available-for-sale investment securities, including those securities that were transferred to held-to-maturity.

See Note 9 for additional details.

Investment gains or losses that were realized and reflected in net income of the current period, which had previously been included in other comprehensive income as unrealized holding gains or losses in the period in which they arose, are considered to be reclassification adjustments that are excluded from other comprehensive income in the current period.

6 unchanged sentences

The following financial instruments represent off-balance-sheet credit risk (dollars in thousands):

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Commitments to extend credit consist primarily of the unused or unfunded portions of the following:

mortgage warehouse lines, home equity lines of credit, commercial real estate construction loans, where disbursements are made over the course of construction;

commercial revolving lines of credit, unsecured personal lines of credit and formalized (disclosed) deposit account overdraft lines.

mortgage warehouse lines;

home equity lines of credit;

commercial real estate construction loans, where disbursements are made over the course of construction;

commercial revolving lines of credit;

unsecured personal lines of credit;

and formalized (disclosed) deposit account overdraft lines.

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

2 unchanged sentences

Included in unused commitments are mortgage warehouse lines which are in the form of repo lines and are unconditionally cancellable.

Unused commitments on mortgage warehouse lines were $ 334.6 million at June 30, 2025, and $ 311.6 million at December 31, 2024.

Unused commitments on mortgage warehouse lines were $ 308.8 million at September 30, 2025, and $ 311.6 million at December 31, 2024.

The allowance for credit losses (ACL) on unfunded commitments is estimated using the same reserve or coverage rates calculated on collectively evaluated loans following the application of a funding rate to the amount of the unfunded commitment.

1 unchanged sentence

The ACL on unfunded loan commitments is located within liabilities on the consolidated balance sheet while any related provision (benefit) expense is recorded as a provision (benefit) for credit losses.

At June 30, 2025, the Company was also utilizing a letter of credit in the amount of $ 127.9 million issued by the Federal Home Loan Bank (“FHLB”) on the Company’s behalf as security for certain deposits and to facilitate certain credit arrangements with the Company’s customers.

At September 30, 2025, the Company was also utilizing a letter of credit in the amount of $ 127.9 million issued by the Federal Home Loan Bank (“FHLB”) on the Company’s behalf as security for certain deposits and to facilitate certain credit arrangements with the Company’s customers.

That letter of credit is backed by loans which are pledged to the FHLB by the Company.

19 unchanged sentences

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

Fair Value Measurements

6 unchanged sentences

Investment securities held-to-maturity

Loans held for investment

Loans held for investment, net

Financial liabilities:

12 unchanged sentences

Securities held-to-maturity

Loans held for investment

Loans held for investment, net

Financial liabilities:

3 unchanged sentences

Subordinated debentures

For financial asset categories carried on the consolidated balance sheet at fair value as of June 30, 2025, and December 31, 2024, the Company used the following methods and significant assumptions:

For financial asset categories carried on the consolidated balance sheet at fair value and measured on a recurring basis as of September 30, 2025, and December 31, 2024, the Company used the following methods and significant assumptions:

● Investment securities :

3 unchanged sentences

For bonds, where no recent observable trades have occurred, our brokers consider recent trades made for similar bonds, issued by banks with similar financial position or credit and adjusted for changes in conditions since the time of the observable trades.

● Collateral dependent individually evaluated loans :

Collateral dependent individually evaluated loans are measured based on the fair value of collateral when foreclosure is probable, or repayment is expected through the

sale or operation of collateral and borrower is experiencing financial difficulty.

Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on Management’s historical knowledge, changes in market conditions from the time of the valuation, and Management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification.

Collateral-dependent loans are evaluated on a quarterly basis and adjusted in accordance with the allowance for credit losses policy.

Significant changes in any of those inputs in isolation would have resulted in a significantly higher or lower fair value measurement.

Fair Value Measurements – Recurring

(dollars in thousands, unaudited)

Fair Value Measurements at June 30, 2025, using

Fair Value Measurements at September 30, 2025, using

Quoted Prices in

17 unchanged sentences

Total available-for-sale securities

The following tables present quantitative information about recurring level 3 fair value measurements at June 30, 2025, and December 31, 2024 (dollars in thousands):

June 30, 2025

The following tables present quantitative information about recurring Level 3 fair value measurements at September 30, 2025, and December 31, 2024 (dollars in thousands):

September 30, 2025

Corporate Bonds

Broker estimate

Market conditions

Discount rate

December 31, 2024

8 unchanged sentences

Differing unobservable input assumptions, for example a change in market conditions, may have resulted in reduced or increased fair value.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2025, and 2024:

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2025, and 2024:

Fair Value Measurements - Level 3 Recurring

4 unchanged sentences

Included in other comprehensive income

Transfers into Level 3

Balance of recurring Level 3 assets at June 30,

Certain Corporate Bonds with a fair value of $ 2.9 million as of December 31, 2024 were transferred out of Level 2 and into Level 3 because of a lack of observable market data for these investments due to a decrease in the market activity for these securities.

Transfers out of Level 3

Balance of recurring Level 3 assets at September 30,

Corporate bonds with a fair value of $ 54.5 million as of December 31, 2024 were transferred from Level 3 to Level 2 in the third quarter of 2025 because observable market data became available for the securities.

For financial asset categories carried on the consolidated balance sheet at fair value and measured on a nonrecurring basis as of September 30, 2025, and December 31, 2024, the Company used the following methods and significant assumptions:

● Individually evaluated collateral dependent loans :

Individually evaluated collateral dependent loans are measured based on the fair value of collateral when foreclosure is probable, or repayment is expected through the sale or operation of collateral and borrower is experiencing financial difficulty.

For real estate loans, fair value of the loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral.

For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property.

For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods.

The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach.

The Company reviews the third-party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5 % to 10 % of the appraised value.

market conditions from the time of the valuation, and Management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification.

Collateral-dependent loans are evaluated on a quarterly basis and adjusted in accordance with the allowance for credit losses policy

Fair Value Measurements – Nonrecurring

(dollars in thousands, unaudited)

Fair Value Measurements at June 30, 2025, using

Fair Value Measurements at September 30, 2025, using

Quoted Prices in

4 unchanged sentences

Individually evaluated collateral dependent loans

Commercial real estate

Other commercial (1)

Total assets measured on a nonrecurring basis

(1) At September 30, 2025 the Company had one individually evaluated collateral dependent loan classified as other commercial with a fair value of zero within Level 3 of the fair value hierarchy.

Fair Value Measurements at December 31, 2024, using

5 unchanged sentences

Individually evaluated collateral dependent loans

Commercial real estate

Other commercial

Total assets measured on a nonrecurring basis

3 unchanged sentences

Adjusting any of those inputs could result in a significantly lower or higher fair value measurement.

The following table presents quantitative information about level 3 fair value measurements for assets measured at fair value on a non-recurring basis at June 30, 2025 (dollars in thousands, unaudited):

June 30, 2025

Collateral-dependent individually evaluated loans, net of ACL

Sales comparison approach

Selling costs

Adjust to comparables

Note 9 – Investments

5 unchanged sentences

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

Allowance for Credit Losses

31 unchanged sentences

Total held-to-maturity securities

An unrealized loss of $ 25.2 million and $ 26.3 million, on securities transferred from the available-for-sale to held-to-maturity categorization, remains as of June 30, 2025 and December 31, 2024, respectively, and is included in accumulated other comprehensive income (loss), net of tax.

An unrealized loss of $ 24.7 million and $ 26.3 million on securities transferred from the available-for-sale to held-to-maturity categorization, remains as of September 30, 2025, and December 31, 2024, respectively, and is included in accumulated other comprehensive loss, net of tax.

The remaining unrealized loss on the securities transferred from available-for-sale to held-to-maturity will be accreted over the remaining term of the securities, with the amortized-cost basis of these securities and accumulated comprehensive income (loss) each increasing over time.

The Company elected the practical expedient available under the current expected credit losses (“CECL”) accounting standard to exclude accrued interest receivable from the amortized cost basis of all categorizations of investment securities, and resultingly did not estimate reserves on accrued interest receivable balances, as any past due interest income is reversed on a timely basis.

Accrued interest receivable is included in other assets on the Company’s consolidated balance sheet and as of June 30, 2025, measured at $ 6.4 million and $ 2.4 million for available-for-sale securities and held-to-maturity securities, respectively.

Accrued interest receivable is included in other assets on the Company’s consolidated balance sheet and as of September 30, 2025, measured at $ 5.8 million and $ 1.6 million for available-for-sale securities and held-to-maturity securities, respectively.

Accrued interest receivable as of December 31, 2024, on these same classes of investment securities measured at $ 7.5 million and $ 2.4 million, respectively.

During the first three-and-six months of 2025 and 2024, no interest receivable on available-for-sale or held-to-maturity securities was reversed against interest income and the Company did not have any held-to-maturity debt securities past due.

During the three-and-nine month periods ending September 30, 2025 and 2024, no interest receivable on available-for-sale or held-to-maturity securities was reversed against interest income and the Company did not have any held-to-maturity debt securities past due.

A discounted cash-flow reserve calculation is performed on securities designated as held-to-maturity on a quarterly basis.

As of June 30, 2025 and December 31, 2024, an allowance for credit losses of $ 15 thousand had been established on the Company’s held-to-maturity portfolio.

As of September 30, 2025 and December 31, 2024, an allowance for credit losses of $ 15 thousand had been established on the Company’s held-to-maturity portfolio.

Because of the implicit and explicit guarantees of the U.S.

4 unchanged sentences

Held-To-Maturity

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

Less than twelve months

21 unchanged sentences

(dollars in thousands, unaudited)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Proceeds from sales, calls and maturities of securities available for sale

2 unchanged sentences

Net gain (loss) on sale of securities available for sale

The amortized cost and estimated fair value of investment securities available-for-sale and held-to-maturity at June 30, 2025, and December 31, 2024 (dollars in thousands), are shown below, grouped by the remaining time to contractual maturity dates.

The amortized cost and estimated fair value of investment securities available-for-sale and held-to-maturity at September 30, 2025, and December 31, 2024 (dollars in thousands), are shown below, grouped by the remaining time to contractual maturity dates.

The expected life of investment securities may not be consistent with contractual maturity dates since the issuers of the securities might have the right to call or prepay obligations with or without penalties.

June 30, 2025

September 30, 2025

Available-for-Sale

21 unchanged sentences

Collateralized loan obligations

At June 30, 2025, the Company’s investment portfolio included 224 municipal bonds issued by 189 different government municipalities and agencies located within 28 different states, with an aggregate fair value of $ 204.2 million.

The largest exposure to any single municipality or agency was a combined $ 4.9 million (fair value) in general obligation bonds issued

by the City of New York (NY).

At September 30, 2025, the Company’s investment portfolio included 227 municipal bonds issued by 192 different government municipalities and agencies located within 28 different states, with an aggregate fair value of $ 216.0 million.

The largest exposure to any single municipality or agency was a combined $ 5.1 million (fair value) in general obligation bonds issued by the City of New York (NY).

In addition, the Company owned 92 subordinated debentures issued by bank-holding companies totaling $ 80.2 million (fair value).

8 unchanged sentences

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

Total obligations of states and political subdivisions

The revenue bonds in the Company’s investment securities portfolios were issued by government municipalities and agencies to fund public services such as utilities (water, sewer, and power), educational facilities, and general public and

economic improvements.

The primary sources of revenue for these bonds are delineated in the table below, which shows the amortized cost and fair market values for the largest revenue concentrations as of the indicated dates.

1 unchanged sentence

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

December 31, 2024

7 unchanged sentences

The Company has the ability to invest in limited partnerships which own housing projects that qualify for federal and/or California state tax credits by mandating a specified percentage of low-income tenants for each project.

The primary investment return comes from tax credits that flow through to investors.

investment return comes from tax credits that flow through to investors.

Because rent levels are lower than standard market rents and the projects are generally highly leveraged, each project also typically generates tax-deductible operating losses allocated to the limited partners for tax purposes.

The Company currently has investments in eight different LIHTC fund limited partnerships made in 2014, 2015, two in 2022, one in 2023, and three in 2024, all of which were California-focused funds that help the Company meet its obligations under the Community Reinvestment Act.

The Company utilized the cost method of accounting for LIHTC fund investments, under which were initially recorded on the consolidated balance sheet as an asset that represents the total cash expected to be invested over the life of the partnership.

The Company utilized the cost method of accounting for LIHTC fund investments, which were initially recorded on the consolidated balance sheet as an asset representing the total cash expected to be invested over the life of the partnership.

Any commitments or contingent commitments for future investment are reflected as a liability.

The income statement reflects tax credits and any other tax benefits from these investments “below the line” within income tax provision, while the initial book value of the investment is amortized on the proportional amortization method as a “below the line” expense, over the time period in which the tax credits and tax benefits are expected to be received.

As of June 30, 2025, the Company’s total LIHTC investment book balance was $ 24.0 million, which is included in “Other Assets” on the consolidated balance sheet.

As of September 30, 2025, the Company’s total LIHTC investment book balance was $ 23.2 million, which is included in “Other Assets” on the consolidated balance sheet.

This investment is offset by $ 11.8 million in remaining commitments for additional capital contributions, which is included in “Other Liabilities” on the consolidated balance sheet.

There were approximately $ 1.5 million in tax credits derived from the Company’s LIHTC investments that were recognized during the six months ended June 30, 2025, and “below the line” amortization expense of $ 1.5 million associated with those investments was recorded for the same time period.

LIHTC investments are evaluated annually for potential impairment, and the Company concluded that the carrying value of the investments is stated fairly and is not impaired.

There were approximately $ 2.2 million in tax credits derived from the Company’s LIHTC investments that were recognized during the nine months ended September 30, 2025, and “below the line” amortization expense of $ 2.2 million associated with those investments was recorded for the same time period.

LIHTC investments are evaluated annually for potential impairment, and the Company concluded the carrying value of the investments is stated fairly and is not impaired.

As of December 31, 2024, the Company’s total LIHTC investment book balance was $ 25.4 million, which includes $ 20.5 million in remaining commitments for additional capital contributions.

There were $ 1.8 million in tax credits derived from LIHTC investments that were recognized during the year ended December 31, 2024, and “below the line” amortization expense of $ 1.9 million associated with those investments was netted against pre-tax noninterest income for the same time period.

There were $ 1.8 million in tax credits derived from LIHTC investments recognized during the year ended December 31, 2024;

“below the line” amortization expense of $ 1.9 million associated with those investments was netted against pre-tax noninterest income for the same time period.

The Company’s investments in qualified affordable housing projects and small business investment companies meet the definition of a variable interest entity, as the entities are structured such that the limited partner investors lack substantive voting rights.

8 unchanged sentences

The Company elected the practical expedient available under CECL to exclude accrued interest receivable from the amortized cost basis of all categorizations of loans and, as a result, did not estimate reserves on accrued interest receivable balances, as any past due interest income is reversed on a timely basis.

Accrued interest receivable on loans of $ 7.3 million and $ 6.1 million at June 30, 2025, and December 31, 2024, respectively is included in other assets on the Company’s consolidated balance sheet.

Accrued interest receivable on loans of $ 7.7 million and $ 6.1 million at September 30, 2025, and December 31, 2024, respectively is included in other assets on the Company’s consolidated balance sheet.

The majority of the disclosures in this footnote are prepared at the class level, which is equivalent to the call report or call code classification.

3 unchanged sentences

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

December 31, 2024

9 unchanged sentences

Allowance for credit losses

The Company places loans on nonaccrual status when Management has determined that the full repayment of principal and collection of contractually agreed upon interest is unlikely or when the loan in question has become delinquent more than 90 days.

The Company places a loan on nonaccrual status when Management has determined full repayment of principal and collection of contractually agreed upon interest is unlikely or the loan in question has become delinquent more than 90 days.

The Company may decide it is appropriate to continue to accrue interest on certain loans more than 90 days delinquent if they are well-secured by collateral and collection is in process.

When a loan is placed on nonaccrual status, any accrued but uncollected interest for the loan is reversed out of interest income in the period in which the loan’s status changed.

For loans with an interest reserve (i.e., where loan proceeds are advanced to the borrower to make interest payments) all interest recognized from the inception of the loan is reversed when the loan is placed on nonaccrual.

For loans with an interest reserve (i.e., loan proceeds are advanced to the borrower to make interest payments) all interest recognized from the inception of the loan is reversed when the loan is placed on nonaccrual.

Once a loan is on nonaccrual status, subsequent payments received from the customer are applied to principal, and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again consistently received as contractually required.

Generally, loans are not restored to accrual status until the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Generally, loans are not restored to accrual status until the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Nonaccrual Loans

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

Nonaccrual Loans

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Residential real estate

Commercial real estate

Total real estate

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Other commercial

The Company did not recognize any interest on nonaccrual loans during the three or six months ended June 30, 2025, and 2024, and would have recognized an additional $ 0.2 million and $ 0.3 million in interest income on nonaccrual loans during the second quarter of 2025 and 2024, respectively, had those loans not been designated as nonaccrual.

The Company did not recognize any interest on nonaccrual loans during the three or nine months ended September 30, 2025, and 2024, and would have recognized an additional $ 0.9 million and $ 0.1 million in interest income on nonaccrual loans during the third quarter of 2025 and 2024, respectively, had those loans not been designated as nonaccrual.

For the year-to-date periods of 2025 and 2024, the Company would have recognized an additional $ 0.3 million and $ 0.4 million, respectively, in interest income on nonaccrual loans had those loans not been designated as nonaccrual.

Due to loans being placed on nonaccrual status, during the second quarter of 2025, $ 0.1 million of interest receivable on loans was reversed against interest income, as compared to an immaterial amount during the second quarter of 2024.

During the first half of 2025, and 2024, $ 0.3 million and $ 0.1 million, respectively, of interest receivable on loans was reversed against interest income.

The following table presents the amortized cost basis of collateral-dependent loans by class as of June 30, 2025, and December 31, 2024:

Due to loans being placed on nonaccrual status, during the third quarter of 2025, $ 0.1 million of interest receivable on loans was reversed against interest income, as compared to an immaterial amount during the third quarter of 2024.

During the first nine months of 2025, and 2024, $ 0.3 million and $ 0.2 million, respectively, of interest receivable on loans was reversed against interest income.

The following table presents the amortized cost basis of collateral-dependent loans by class as of September 30, 2025, and December 31, 2024:

Collateral Dependent Loans

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

December 31, 2024

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Residential real estate

Commercial real estate

Total real estate

Other commercial

During the first six months of 2025 the amortized cost balance of collateral-dependent loans decreased by $ 4.7 million due primarily to a $ 5.3 million charge-off of on agriculture production loan in the other commercial category, principal

payments received on the same agricultural production loan, offset by a commercial real estate relationship secured by a hotel property which was placed on nonaccrual status.

The weighted average loan-to-value ratio of collateral-dependent loans was 83.4 % at June 30, 2025.

There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of June 30, 2025 and December 31, 2024.

During the first nine months of 2025 the amortized cost balance of collateral-dependent loans decreased by $ 6.0 million due primarily to a $ 5.3 million charge-off on agriculture production loan in the other commercial category, principal payments received on the same agricultural production loan, offset by a commercial real estate relationship secured by a

hotel property which was placed on nonaccrual status.

The weighted average loan-to-value ratio of collateral-dependent loans was 81.1 % at September 30, 2025.

There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of September 30, 2025, and December 31, 2024.

Past Due Loans

(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

30-59 Days Past Due

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principal forgiveness, rate reduction, payment deferral, and/or term extension.

There was an immaterial amount of term extensions for the three months ended June 30, 2025, and none for the three months ended June 30, 2024.

The following tables present the amortized cost basis of loans at June 30, 2025, and 2024, that were both experiencing financial difficulty and modified during the six months ended June 30, 2025, and 2024, by class and by type of modification.

There was an immaterial amount of term extensions for the three months ended September 30, 2025, and none for the three months ended September 30, 2024.

The following tables present the amortized cost basis of loans at September 30, 2025, and 2024, that were both experiencing financial difficulty and modified during the nine months ended September 30, 2025, and 2024, by class and by type of modification.

The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below (dollars in thousands, unaudited):

Six months ended June 30, 2025

Nine months ended September 30, 2025

Principal Forgiveness

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Other commercial

Six months ended June 30, 2024

Nine months ended September 30, 2024

Principal Forgiveness

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Other commercial

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended June 30, 2025 and 2024 (dollars in thousands, unaudited):

Three months ended June 30, 2025

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended September 30, 2025, and 2024 (dollars in thousands, unaudited):

Three months ended September 30, 2025

Principal Forgiveness

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Other commercial

Three months ended June 30, 2024

Three months ended September 30, 2024

Principal Forgiveness

1 unchanged sentence

Weighted-Average Term Extension (years)

Other construction/land

Other commercial

Six months ended June 30, 2025

Nine months ended September 30, 2025

Principal Forgiveness

2 unchanged sentences

Other commercial

Six months ended June 30, 2024

Nine months ended September 30, 2024

Principal Forgiveness

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Other commercial

There were no payment defaults on loans previously modified in the preceding 12 months for either of the periods ending June 30, 2025, and 2024.

There were no payment defaults on loans previously modified in the preceding 12 months for either of the periods ending September 30, 2025, and 2024.

For the purpose of this disclosure, the Company defines a payment default as 90 days past due.

The Company had $ 0.1 million in additional funds committed on loans which have been modified to borrowers experiencing financial difficulty as of June 30, 2025, and none as of June 30, 2024.

The Company had $ 0.1 million in additional funds committed on loans which have been modified to borrowers experiencing financial difficulty as of September 30, 2025, and none as of September 30, 2024.

The Company monitors the credit quality of loans on a continuous basis using the regulatory and accounting classifications of pass, special mention, and substandard to characterize and qualify the associated credit risk.

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(dollars in thousands, unaudited)

June 30, 2025

September 30, 2025

Term Loans Amortized Cost Basis by Origination Year

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Purchased credit deteriorated (“PCD”) loans are loans acquired or purchased, which as of acquisition, had evidence of more than insignificant credit deterioration since origination.

As of June 30, 2025, the Company had no loans categorized as PCD.

The model used for calculating the Company’s ACL is refreshed periodically, most recently in the third quarter of 2024.

In this most recent refresh, the Company changed to a Multi-Factor Regression Model from a Single-Factor Regression Model used in previous periods.

As of September 30, 2025, the Company had no loans categorized as PCD.

The model used for calculating the Company’s ACL is reviewed and revised periodically, most recently a full review with modifications in the third quarter of 2024, with a partial review and minimal modifications completed in the third quarter of 2025.

In the most recent full review, the Company changed to a Multi-Factor Regression Model from a Single-Factor Regression Model used in previous periods.

Additionally, legacy peer groups were expanded to include California banks with an asset size between $ 1.5 billion to $ 10 billion.

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The loss-rate data has been regressed against benchmark economic indicators, for which reasonable and supportable forecasts exist, in the development of the call-code specific regression models.

Regression models are refreshed periodically, in order to pull in more recent loss rate data.

Regression models are updated periodically, in order to pull in more recent loss-rate data.

Reasonable and supportable forecasts of the selected economic metric are then input into the regression model to calculate an expected default rate.

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Economic forecasts are considered over a four-quarter forecast period, with reversion to mean occurring on a straight-line basis over four quarters.

The call code multiple factor regression models utilized as of June 30, 2025, for Residential Real Estate loans relied upon reasonable and supportable forecasts of the National Unemployment Rate and House Price Index (HPI).

The call code multiple factor regression models utilized as of June 30, 2025, for Commercial Real Estate and Other Construction loans relied upon reasonable and supportable forecasts of the National Unemployment Rate and Gross Domestic Product (GDP).

The call code multiple factor regression models utilized as of September 30, 2025, for Residential Real Estate loans relied upon reasonable and supportable forecasts of the National Unemployment Rate and House Price Index (HPI).

The call code multiple factor regression models utilized as of September 30, 2025, for Commercial Real Estate and Other Construction loans relied upon reasonable and supportable forecasts of the National Unemployment Rate and Gross Domestic Product (GDP).

Management selected the National Unemployment Rate, HPI, and GDP as the drivers of quantitative portion of collectively evaluated reserves on loan classes reliant upon the DCF methodology, primarily as a result of high correlation coefficients identified in regression modeling, the availability of forecasts including the quarterly Federal Open Market Committee (FOMC) forecast and given the widespread familiarity of stakeholders with these economic metrics.

The quantitative reserves for Farmland, Agricultural Production and Consumer loans are calculated using a Remaining Life methodology where average historical peer loss rates are applied to expected loan balances over an estimated remaining life of loans in calculation of the quantitative portion of collectively evaluated loans in these classes.

The quantitative reserves for Farmland, Agricultural Production and Consumer loans are calculated using a Remaining Life methodology where the Company’s average historical loss-rates are applied to expected loan balances over an estimated remaining life of loans in calculation of the quantitative portion of collectively evaluated loans in these classes.

The estimated remaining life is calculated using historical peer data.

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Management recognizes there are additional factors impacting risk of loss in the loan portfolio beyond what is captured in the quantitative portion of reserves on collectively evaluated loans.

As current and expected conditions may vary compared with conditions over the historical lookback period, which is utilized in the calculation of quantitative reserves,

Management considers whether additional or reduced reserve levels on collectively evaluated loans may be warranted given the consideration of a variety of qualitative factors.

As current and expected conditions may vary compared

with conditions over the historical lookback period, which is utilized in the calculation of quantitative reserves, Management considers whether additional or reduced reserve levels on collectively evaluated loans may be warranted given the consideration of a variety of qualitative factors.

Several of the following qualitative factors (“Q-factors”) considered by Management reflects the legacy regulatory guidance on Q-factors, whereas several others represent factors unique to the Company or unique to the current time period.

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Farmland and Agricultural Production loans are included in a single segment as these loans are oftentimes to the same borrowers, facing the same risks relating to commodity prices, water supply and drought conditions, in addition to other environmental concerns.

Commercial & Industrial loans are separated into separate segment given the uniqueness of these loans, which are often revolving and secured by business assets other than real estate.

Mortgage Warehouse loans warrant presentation as an individual portfolio segment given the specific nature of these constantly revolving lines to mortgage originators and due to a very limited loss history, even after consideration of peer data.

Commercial & Industrial loans are separated into a separate segment given the uniqueness of these loans, which are often revolving and secured by business assets other than real estate.

Mortgage Warehouse loans warrant presentation as an individual portfolio segment given the specific nature of these constantly

revolving lines to mortgage originators and due to a very limited loss history, even after consideration of peer data.

Finally, Consumer loans are split out as a result of the small balance, homogeneous terms that characterize these loans.

Management individually evaluates loans that do not share risk characteristics with other loans when estimating reserves.

As of June 30, 2025 and 2024, the only loans Management considered to have different risk characteristics from other loans sharing the same call report code were loans designated as nonaccrual.

The following tables present the activity in the allowance for credit losses by portfolio segment for the quarters ended June 30, 2025, and 2024:

As of September 30, 2025 and 2024, the only loans Management considered to have different risk characteristics from other loans sharing the same call report code were loans designated as nonaccrual.

The following tables present the activity in the allowance for credit losses by portfolio segment for the quarters ended September 30, 2025, and 2024:

Allowance for Credit Losses

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Allowance for credit losses:

Balance, March 31, 2025

(Benefit) provision for credit losses

Balance June 30, 2025

(Benefit) provision for credit losses

Balance September 30, 2025

Residential Real Estate

4 unchanged sentences

Allowance for credit losses:

Balance, March 31, 2024

(Benefit) provision for credit losses

Balance June 30, 2024

The following tables present the activity in the allowance for credit losses by portfolio segment for the six months ended June 30, 2025, and 2024:

(Benefit) provision for credit losses

Balance September 30, 2024

The following tables present the activity in the allowance for credit losses by portfolio segment for the nine months ended September 30, 2025, and 2024:

Residential Real Estate

6 unchanged sentences

(Benefit) provision for credit losses

Balance June 30, 2025

Balance September 30, 2025

Residential Real Estate

6 unchanged sentences

(Benefit) provision for credit losses

Balance June 30, 2024

Balance September 30, 2024

Note 11 – Goodwill

The balance of goodwill at the three-and-six months beginning and ended June 30, 2025 and 2024 was $ 27.4 million.

There was no acquired goodwill for the three-and-six months ended June 30, 2025 and 2024.

The balance of goodwill at the three-and-nine months beginning and ended September 30, 2025, and 2024 was $ 27.4 million.

There was no acquired goodwill for the three-and-nine months ended September 30, 2025, and 2024.

The Company performs its annual goodwill impairment tests annually, or more often if events or circumstances indicate the carrying value may not be recoverable.

The annual assessment date was changed to October 1 in 2023 to allow more time for evaluation of impairment.

The Company performed its annual Step 1 goodwill impairment assessment as of October 1, 2024, using a market approach.

The Company performed its annual Step 1 goodwill impairment assessment subsequent to the September 30, 2025 period end, effective as of October 1, 2025, using a market approach.

Based on the results of the Company’s goodwill impairment assessment, the Company determined that the fair value of its reporting unit, which was at the consolidated level, exceeded the carrying value.

Management continues to evaluate whether or not a triggering event occurs, or circumstances change that would more likely than not reduce the fair value of the Company below its carrying amount before the next annual test in 2025 and has concluded no such events have occurred.

Therefore, goodwill was not impaired as of June 30, 2025, and there were no impairment charges related to the Company’s goodwill recorded during the three-and-six months ended June 30, 2025 and 2024.

Therefore, goodwill was not impaired as of September 30, 2025, and there were no impairment charges related to the Company’s goodwill recorded during the three-and-nine months ended September 30, 2025, and 2024.

Note 12 – Borrowings and Other Arrangements

Repurchase Agreements – Repurchase agreements represent “sweep accounts,” where commercial deposit balances above a specified threshold are transferred at the close of each business day into separate non-deposit accounts.

Balances of the non-deposit accounts are used by customers to purchase government bonds from the Company daily, subject to an agreement from the Company to repurchase such securities the next business day.

Repurchase agreements totaled $ 126.5 million at June 30, 2025, relative to a balance of $ 108.9 million at December 31, 2024.

Long-Term Debt – The Company has long-term debt in the form of fixed to floating rate subordinated debentures with a fixed rate of 3.25 % until September 30, 2026, then floating rate at 253.5 basis points over 3-month term Secured Overnight

Financing Rate (“SOFR”) until maturity on October 1, 2031.

The balance of the Company’s long-term debt, net of unamortized issuance costs, was $ 49.4 million at June 30, 2025, and $ 49.4 million at December 31, 2024.

Customers use balances of the non-deposit accounts to purchase government bonds from the Company daily, subject to an agreement from the Company to repurchase such securities the next business day.

Repurchase agreements totaled $ 125.7 million at September 30, 2025, relative to a balance of $ 108.9 million at December 31, 2024.

The balance of the Company’s long-term debt, net of unamortized issuance costs, was $ 49.5 million at September 30, 2025, and $ 49.4 million at December 31, 2024.

Subordinated Debentures – Sierra Statutory Trust II (“Trust II”), Sierra Capital Trust III (“Trust III”), and Coast Bancorp Statutory Trust II (“Trust IV”), (collectively, the “Trusts”) exist solely for the purpose of issuing trust preferred securities fully and unconditionally guaranteed by the Company.

2 unchanged sentences

These instruments are benchmarked against the SOFR, effective June 30, 2023.

At June 30, 2025, and December 31, 2024, the Company’s trust preferred securities totaled $ 35.9 million and $ 35.8 million, respectively.

The following table summarizes the Company’s other borrowings as of June 30, 2025, and December 31, 2024:

June 30, 2025

At September 30, 2025, and December 31, 2024, the Company’s trust preferred securities totaled $ 36.0 million and $ 35.8 million, respectively.

The following table summarizes the Company’s other borrowings as of September 30, 2025, and December 31, 2024:

September 30, 2025

December 31, 2024

4 unchanged sentences

The Company has established secured and unsecured lines of credit under which it may borrow funds from time to time on a term or overnight basis from the FHLB, FRB, and other correspondent banks.

Federal Funds Purchased – The Company had lines of credit with its correspondent banks which, in the aggregate, amounted to $ 485.8 million unsecured and $ 25.0 million secured at June 30, 2025 and December 31, 2024, at fixed interest rates which vary with market conditions.

There was $ 40.0 million in outstanding overnight balances under these lines of credit at June 30, 2025 and no ne at December 31, 2024.

Secured FHLB Borrowings – At June 30, 2025, and December 31, 2024, the Company had secured available lines of credit with the FHLB totaling $ 605.6 million and $ 629.1 million, respectively, based on eligible collateral of certain loans and investment securities.

Federal Funds Purchased – The Company had lines of credit with its correspondent banks which, in the aggregate, amounted to $ 485.8 million unsecured and $ 25.0 million secured at September 30, 2025, and December 31, 2024, at fixed interest rates which vary with market conditions.

There was $ 25.0 million in outstanding overnight balances under these lines of credit at September 30, 2025, and no ne at December 31, 2024.

Secured FHLB Borrowings – At September 30, 2025, and December 31, 2024, the Company had secured available lines of credit with the FHLB totaling $ 623.8 million and $ 629.1 million, respectively, based on eligible collateral of certain loans and investment securities.

Federal Reserve Line of Credit – The Company has an available line of credit with the FRB of San Francisco secured by certain loans and investments.

At June 30, 2025, and December 31, 2024, the Company had borrowing capacity under this line totaling $ 321.4 million and $ 298.3 million, respectively.

The Company had no outstanding borrowings on this line of credit as of June 30, 2025, and December 31, 2024.

At September 30, 2025, and December 31, 2024, the Company had borrowing capacity under this line totaling $ 266.4 million and $ 298.3 million, respectively.

The Company had no outstanding borrowings on this line of credit as of September 30, 2025, and December 31, 2024.

Note 13 – Revenue Recognition

3 unchanged sentences

The Company’s revenue streams that are within the scope of and accounted for under Topic 606 include service charges on deposit accounts, debit card interchange fees, and fees levied for other services the Company provides its customers.

The guidance does not apply to revenue associated with financial instruments such as loans and investments, and other noninterest income such as loan servicing fees and earnings on bank-owned life insurance, which are accounted for on an accrual basis under other provisions of GAAP.

The guidance does not apply to revenue associated with financial instruments such as

loans and investments, and other noninterest income such as loan servicing fees and earnings on bank-owned life insurance, which are accounted for on an accrual basis under other provisions of GAAP.

All of the Company’s revenue from contracts within the scope of ASC 606 is recognized as noninterest income.

Due to the short-term nature of the Company’s contracts with customers, an insignificant amount of receivables related to such revenue was recorded at June 30, 2025, June 30, 2024, and December 31, 2024.

Due to the short-term nature of the Company’s contracts with customers, an insignificant amount of receivables related to such revenue was recorded at September 30, 2025, September 30, 2024, and December 31, 2024.

The following table presents the Company’s sources of noninterest income.

Items outside the scope of ASC 606 are noted as such (dollars in thousands, unaudited).

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Noninterest income

13 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