What changed in this filing

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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 35 added, 15 removed, 185 unchanged (21% of the section changed)

5 unchanged sentences

In particular, the Company may face the following risks in connection with market conditions:

• In 2024, the United States ("U.S.") economy faced a series of challenges, including declining but elevated inflation.

The economy saw a strong but slowing job market and solid consumer spending fueling economic growth.

Uncertainties about global geopolitical tensions continued in 2024, as did lingering supply chain concerns.

Looking ahead to 2025, inflationary pressures have eased but uncertainty remains around tax reform, tariffs, and other monetary policy.

• In 2025, the United States ("U.S.") economy experienced positive but uneven growth.

The economy saw moderating but persistently elevated inflation, a solid but slowing labor market, and solid consumer spending, particularly later in 2025.

Uncertainties about tariff policies and international trade contributed to price pressures and uncertainty.

Looking ahead to 2026, inflationary pressures have eased but elevated living costs are still a concern for consumers, and uncertainty remains around tariffs, monetary policy, and unemployment.

economy is affected by global events and conditions, including U.S.

5 unchanged sentences

• In addition to the results above, a slowdown in economic activity may cause declines in financial services activity, including declines in bank card, corporate cash management and other fee businesses, as well as the fees earned by the Company on such transactions.

• During recent years, there was a shift from in-office work to remote work.

As a result, businesses continue to reevaluate their office space needs and, in some cases, reduce their leased office space, selling commercial office buildings, or leasing space no longer needed.

The impact of this shift continues to be seen but could result in reduced demand for office space, lower lease rates for office space, and lower values of office buildings.

These factors may contribute to higher delinquencies and net charge-offs for commercial office real estate loans.

Additionally, businesses that cater to or are located near dense areas of office buildings may be adversely impacted, which could result in higher delinquencies and net charge-offs for certain commercial borrowers.

• The process used to estimate credit losses in the Company’s loan portfolio requires difficult, subjective, and complex judgments, including consideration of economic conditions and how these economic predictions might impair the ability of its borrowers to repay their loans.

12 unchanged sentences

Large, national financial institutions have substantial capital, technology and marketing resources.

These new competitors may lower fees to grow market share, which could result in a loss of customers and lower fee revenue for the Company.

These new competitors may lower fees to grow market share, which could result in a loss of

customers and lower fee revenue for the Company.

They may have greater access to capital at a lower cost than the Company, and may have higher loan limits, both of which may adversely affect the Company’s ability to compete effectively.

22 unchanged sentences

In recent years, federal, state and international lawmakers and regulators have increased their focus on financial institutions' and other companies' risk oversight, disclosures and practices in connection with climate change and other ESG matters.

For example, the state of California, in which the Company does business, has enacted bills that would require the Company and other entities to report climate-related information such as greenhouse gas emissions and climate-related risks.

The SEC has also announced plans to propose rules to require enhanced disclosure regarding human capital management and board diversity for public issuers.

9 unchanged sentences

During September 2024, the Federal Reserve began reducing rates as inflation began to subside.

Rates remained unchanged at 4.25% to 4.50% throughout the first eight months of 2025 until the Federal Reserve Board cut rates .25% in September 2025.

By December 2025, the Federal Reserve had implemented 3 rate cuts for the year.

Monetary policy led by the Federal Reserve in the coming year will play a crucial role in liquidity and interest rate risk.

31 unchanged sentences

Fair values and the information used to record valuation adjustments for certain assets and liabilities are based on quoted market prices and/or other observable inputs provided by independent third-party sources, when available.

When such third-party information is not available, fair value is estimated primarily by using cash flow and other financial modeling techniques utilizing assumptions such as credit quality, liquidity, interest rates and other relevant inputs.

When such third-party

information is not available, fair value is estimated primarily by using cash flow and other financial modeling techniques utilizing assumptions such as credit quality, liquidity, interest rates and other relevant inputs.

Changes in underlying factors, assumptions, or estimates in any of these areas could materially impact the Company’s future financial condition and results of operations.

15 unchanged sentences

These losses include, but are not limited to, costs and expenses for card reissuance as well as losses resulting from fraudulent card transactions.

Integrating FineMark into the Company may be more difficult, costly, or time consuming than expected and the anticipated benefits and cost savings of the Merger may not be realized.

The success of the Company’s Merger with FineMark, including anticipated benefits and cost savings, will depend, in part, on the Company's ability to successfully combine and integrate the businesses of the Company and FineMark in a manner that permits growth opportunities and does not materially disrupt the existing customer relations nor result in decreased revenues due to loss of customers.

It is possible that the integration process could result in the disruption of either company’s ongoing businesses or inconsistencies in standards, controls, procedures, and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors, and employees or to achieve the anticipated benefits and cost savings of the Merger.

If the Company experiences difficulties with the integration process, the anticipated benefits of the Merger may not be realized fully or at all, or may take longer to realize than expected.

Integration efforts will also divert management attention and resources.

These integration matters could have an adverse effect on the Company for an undetermined period after completion of the Merger.

An inability to realize the full extent of the anticipated benefits of the Merger and the other transactions contemplated by the Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the Company following the completion of the Merger, which may adversely affect the value of the common stock of the Company following the completion of the Merger.

Additionally, following consummation of the acquisition of FineMark, the Company made fair value estimates of certain assets and liabilities in recording the acquisition.

Actual values of these assets and liabilities could differ from the estimates, which could impact regulatory capital ratios and result in the Company not achieving the anticipated benefits of the acquisition of FineMark.

There can be no assurances that the Company will be successful following the acquisition of FineMark or that it will realize the expected operating efficiencies, cost savings or other benefits currently anticipated from the acquisition of FineMark.

The Company has incurred and is expected to incur substantial costs related to the Merger.

The Company has incurred and is expected to continue to incur substantial expenses in connection with the Merger.

These costs include legal, financial advisory, accounting, consulting, and other advisory fees, retention, severance, and employee benefit-

related costs, public company filing fees and other regulatory fees, financial printing and other printing costs, closing, integration and other related costs.

Additional unanticipated costs may be incurred in the integration of the Company’s business with the business of FineMark, and there are many factors beyond the Company’s control that could affect the total amount or timing of integration costs.

Although the Company expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and acquisition-related costs over time, this net benefit may not be achieved in the near term, or at all.

The Company may be unable to retain personnel successfully.

The success of the Merger will depend in part on the Company’s ability to retain the talent and dedication of key employees.

It is possible that these employees may decide not to remain with the Company, and if the Company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.

In addition, if key employees terminate their employment, the Company’s business activities may be adversely affected, as management’s attention may be diverted from successfully hiring suitable replacements and may not be able to locate or retain suitable replacements for any key employees who leave, all of which may cause the Company’s business to suffer.

The allowance for credit losses may be insufficient or future credit losses could increase.

35 unchanged sentences

Information security risks continue to increase due to new technologies, the increasing use of the Internet and telecommunication technologies (including mobile devices) to conduct financial and other business transactions, and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, and others.

These risks may also be intensified by factors such as an increased volume and complexity of cyber attacks during periods of heightened geopolitical tensions and emerging technological innovations, such as the use of artificial intelligence (“AI”) tools and quantum computing, that may enable malicious actors to develop more advanced social engineering attacks, circumvent security controls, evade detection and remove forensic evidence.

The Company has faced security incidents, which have been minor in scope and impact, and it expects unauthorized parties to continue to attempt to gain access to its systems or information, as well as those of its business partners and service providers.

2 unchanged sentences

The Company also requires ongoing security awareness training for employees, hosts tabletop exercises to test response readiness, and performs regular audits using both internal and outside resources.

However, there can be no assurance that any such failures, interruptions or security breaches will not occur, or if

they do occur, that they will be adequately addressed.

However, there can be no assurance that any such failures, interruptions or security breaches will not occur, or if they do occur, that they will be adequately addressed.

In addition to unauthorized access, denial-of-service attacks or other operational disruptions could prevent the Company from adequately serving customers.

29 unchanged sentences

Among the impacts to the Company could be a drop in demand for our products and services, particularly in certain industries.

In addition, the Company could experience reductions in creditworthiness on the part of some customers or in the value of assets securing

In addition, the Company could experience reductions in creditworthiness on the part of some customers or in the value of assets securing loans.

The Company’s efforts to take these risks into account in making lending and other decisions, including by increasing the Company’s business with climate-friendly companies, may not be effective in protecting the Company from the adverse impact of new laws and regulations or changes in consumer or business behavior.

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