What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-03-17 · 416 added, 571 removed, 1673 unchanged (37% of the section changed)

7 unchanged sentences

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2025 expressed an adverse opinion on the Company’s internal control over financial reporting due to material weaknesses.

Restatement of Previously Issued Financial Statements

As described in note 23 to the consolidated financial statements, the 2023 consolidated financial statements have been restated.

Change in Accounting Principle

During the year ended December 31, 2023, the Company changed its method of accounting for credit losses due to the adoption of Accounting Standards Update 2016-13 Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2026 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Notes 1 and 4 to the consolidated financial statements, the balance of the Company’s allowance for credit losses – loans was $170 million at December 31, 2025.

The allowance for credit losses - loans is a valuation account that is deducted from the amortized cost basis of loans held for investment to present the net carrying value at the amount

expected to be collected.

The allowance for credit losses - loans is a valuation account that is deducted from the amortized cost basis of loans held for investment to present the net carrying value at the amount expected to be collected.

The allowance for credit losses – loans is maintained at a level sufficient to provide for expected credit losses over the lives of the loans based on evaluating historical credit loss experience and making qualitative reserve factor adjustments to historical loss information for each loan category for differences in the specific risk characteristics in the current loan portfolio based on reasonable and supportable forecasts.

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We identified the estimation of qualitative reserve factors used in the allowance for credit losses – loans, as a critical audit matter.

The qualitative reserve factors are used to estimate credit losses related to matters that are not captured in the historical loss component of the allowance for credit losses – loans, and are based on management’s evaluation of available internal and external data.

The qualitative reserve factors are used to estimate credit losses related to matters that are not captured in the

historical loss component of the allowance for credit losses – loans, and are based on management’s evaluation of available internal and external data.

Auditing management’s judgments regarding the qualitative reserve factors applied to the allowance for credit losses - loans involved especially challenging and subjective auditor judgment when performing audit procedures and evaluating the results of those procedures.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to qualitative reserve factors included the following, among others:

• Testing the design, implementation, and operating effectiveness of controls relating to management’s calculation of the allowance for credit losses - loans, including controls over the identification and assessment of the qualitative reserve factors used.

These procedures included evaluating the design and testing the operating effectiveness of internal controls related to the Company’s identification and assessment of the qualitative reserve factors.

Our audit procedures related to the qualitative reserve factors included the following, among others:

▪ Obtaining management’s analysis and supporting documentation related to the qualitative reserve factors and testing whether the factors used in the calculation of the allowance for credit losses – loans are supported by the analysis provided by management.

▪ Testing the appropriateness of the methodology and significant assumptions used in the calculation of the allowance for credit losses – loans, testing completeness and accuracy of the data used in the calculation, testing the estimation and application of the qualitative reserve factors determined by management, and recalculating the balance of the allowance for credit losses – loans.

/s/ Moss Adams LLP

/s/ Baker Tilly US, LLP

Everett, Washington,

March 17, 2025

February 27, 2026

We have served as the Company’s auditor since 2016.

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Coastal Financial Corporation

Adverse Opinion on Internal Control over Financial Reporting

Opinion on Internal Control over Financial Reporting

We have audited Coastal Financial Corporation and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of Coastal Financial Corporation and subsidiaries as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated March 17, 2025, expressed an unqualified opinion on those consolidated financial statements.

Basis for Adverse Opinion on Internal Control over Financial Reporting

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of Coastal Financial Corporation and subsidiaries as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated February 27, 2026, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A.

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We believe that our audit provides a reasonable basis for our opinion.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management’s assessment in Item 9A:

• The Company has an ineffective control environment and did not maintain the risk assessment and control activities components of the COSO framework resulting in the Company not appropriately designing and implementing sufficient internal controls around the accounting and financial reporting related to information provided by BaaS partners.

• A deficiency in the design of controls related to the BaaS lending partner accounting policies reflected in BaaS partner reports that could impact the Company’s use of such reports to record interest income, BaaS loan expense and the related balance sheet accounts.

• A deficiency in the design of controls related to the proper presentation of BaaS partner interchange fees on point of sale transactions that conforms with the Company’s adopted accounting policies.

We considered the material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2024, and our opinion on such consolidated financial statements was not affected.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and

procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Moss Adams LLP

/s/ Baker Tilly US, LLP

Everett, Washington,

March 17, 2025

February 27, 2026

We have served as the Company’s auditor since 2016.

3 unchanged sentences

2025 December 31,

(as restated -

Cash and due from banks $ 34,241 $ 36,533

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Deferred tax asset, net — 3,600

Intangible assets, net 4,536 —

Other assets 20,257 13,646

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CCBX payable 27,492 29,171

Deferred tax liability, net 853 —

Other liabilities 23,212 13,425

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2025 2024 2023

(as restated -

INTEREST AND DIVIDEND INCOME

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Servicing and other BaaS fees 5,795 4,743 3,855

Transaction fees 5,910 4,011 3,211

Interchange fees 6,933 4,252 2,583

Transaction and interchange fees 18,744 12,843 8,263

Reimbursement of expenses 4,952 2,489 1,122

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Net income — — 44,579 — 44,579

Adjustment to retained earnings;

adoption of ASU 2016- 13 — — 734 — 734

Issuance of restricted stock awards 13,538 — — — —

8 unchanged sentences

Net income — — 45,219 — 45,219

Adjustment to retained earnings;

adoption of ASU 2016- 13 — 0 — 734 — 734

Issuance of restricted stock awards 16,698 — — — —

2 unchanged sentences

Stock-based compensation — 4,844 — — 4,844

Stock issuance and net proceeds from

public offering 1,380,000 91,801 — — 91,801

Other comprehensive loss, net of tax — — — 466 466

2 unchanged sentences

Net income — — 46,993 — 46,993

Issuance of restricted stock awards 16,698 — — — —

Vesting of restricted stock units 66,806 — — — —

Exercise of stock options 167,455 1,396 — — 1,396

Issuance of restricted stock awards, net

of 691 shares held to cover for taxes

9,348 ( 69 ) — — ( 69 )

Vesting of restricted stock units, net of

37,212 shares held to cover for taxes

135,333 ( 3,460 ) — — ( 3,460 )

Exercise of stock options, net of 5,720

shares held to cover for exercise and

60,213 104 — — 104

Stock-based compensation — 8,603 — — 8,603

Stock issuance and net proceeds from

public offering 1,380,000 91,801 — — 91,801

public offering, adjustment — 83 — — 83

Other comprehensive income,

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2025 2024 2023

(as restated -

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Loss on disposition of fixed assets 26 — 39

Increase in operating lease right-of-use assets 835 833 1,087

Increase in operating lease liabilities ( 848 ) ( 857 ) ( 1,086 )

Decrease in operating lease right-of-use assets 899 835 833

Decrease in operating lease liabilities ( 915 ) ( 848 ) ( 857 )

Gain on sales of loans — — ( 253 )

Net amortization (accretion) on investment securities 5 ( 25 ) ( 50 )

Unrealized holding (gain) loss on equity investment ( 27 ) ( 279 ) 153

Net amortization on investment securities 13 5 ( 25 )

Unrealized holding loss (gain) on equity investment, net 414 ( 27 ) ( 279 )

Stock-based compensation 8,603 4,844 3,688

Increase in bank-owned life insurance value ( 516 ) ( 485 ) 27

Deferred tax benefit (expense) 138 13,879 ( 11,018 )

Deferred tax expense 4,453 138 13,879

Net change in CCBX receivable ( 10,052 ) ( 5,050 ) 1,328

5 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investment securities available for sale — — ( 134,912 )

Purchase of investment securities held for investment — ( 50,244 ) —

Change in other investments, net ( 546 ) 607 ( 2,230 )

Purchase of investment securities held-to-maturity ( 5,145 ) — ( 50,244 )

Net (increase) decrease in FRB and FHLB securities ( 1,895 ) ( 475 ) 730

Change in equity investments, net ( 556 ) ( 71 ) ( 123 )

Principal paydowns of investment securities available-for-sale 7 8 9

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Purchase of bank owned life insurance ( 19 ) ( 20 ) ( 230 )

Net cash paid in asset acquisition ( 2,370 ) — —

Proceeds from sales of loans held for sale 6,637,989 1,524,870 600,199

Proceeds from sales of loan participations — — 10,300

Purchase of loans 26,330 ( 201,995 ) ( 91,465 )

Purchase of loan participations — — ( 52 )

Increase in loans receivable, net ( 7,175,756 ) ( 2,024,548 ) ( 1,047,310 )

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Net decrease in time deposits ( 5,260 ) ( 811 ) ( 11,089 )

Net repayment from long term FHLB borrowing — — ( 24,999 )

Increase from subordinated debt proceeds — — 19,625

Proceeds from exercise of stock options 1,396 618 1,468

Proceeds from public offering 91,801 — —

Proceeds from exercise of stock options, net of shares withheld to cover 104 1,396 618

Net cash for shares held to cover on restricted stock vesting ( 3,529 ) — —

Proceeds from public offering, expense true-up 82 91,801 —

Net cash provided by financing activities 555,524 318,165 543,461

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Transfer from loans to loans held for sale $ 6,688,605 $ 1,545,470 $ 599,946

Adjustment to retained earnings - adoption of ASU 2016-13, net of deferred tax $ — $ ( 734 ) $ —

(1) See Note 23, Restatement of Prior Period Financial Statements.

Adjustment to retained earnings - adoption of ASU 2016-13, net of

deferred tax $ — $ — $ ( 734 )

Settlement of receivables as consideration in asset acquisition $ 2,166 $ — $ —

See accompanying Notes to Consolidated Financial Statements.

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Arlington Olympic LLC was formed in 2019 and owns the Arlington branch site, which the Bank leases from the LLC.

The Company operates through the Bank and is headquartered in Everett, Washington, which by population is the largest city in, and the county seat of, Snohomish County.

The Company operates through the Bank and is headquartered in Everett, Washington, which by population is the largest city in Snohomish County.

The Company’s business is conducted through three reportable segments:

The community bank, CCBX and treasury & administration.

The community bank offers a full range of banking services to small and medium-sized businesses, professionals, and individuals throughout the greater Puget Sound region through its 14 branches in Snohomish, Island and King Counties, the Internet, and its mobile banking application.

The CCBX segment provides Banking as a Service (“BaaS”) that allows our broker dealers and digital financial service partners to offer their customers banking services.

Through CCBX’s partners the Company is able to offer banking services and products across the nation.

The treasury & administration segment includes treasury management, overall administration and all other aspects of the Company.

The primary focus of the community bank is on providing a wide range of banking products and services to consumers and small to medium sized businesses in the broader Puget Sound region in the state of Washington and through the Internet and our mobile banking application.

We currently operate 14 full-service banking locations, 12 of which are located in Snohomish County, where we are the largest community bank by deposit market share, and two of which are located in neighboring counties (one in King County and one in Island County).

We also have a loan production office which is located in King county.

The CCBX segment provides banking as a service (“BaaS”) that allows digital financial service providers, companies and brands to offer their customers banking services.

The CCBX segment had a total of 28 partners, at varying stages as of December 31, 2025.

The treasury & administration segment includes investments, debt and other reporting items that are not specific to the community bank or CCBX segments.

The Bank’s deposits are insured in whole or in part by the Federal Deposit Insurance Corporation (“FDIC”).

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Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Management believes that its critical accounting estimates include determining the allowance for credit losses, the fair value of the Company’s financial instruments, and the valuation of deferred tax assets, financial instruments, and other fair value measurements.

Management believes that its critical accounting estimate includes determining the allowance for credit losses.

Actual results could differ significantly from those estimates.

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This method will be applied until the investments do not qualify for the measurement election (e.g., if the investment has a readily determinable fair value).

The Company will reassess at each reporting period whether the equity investments without a readily determinable fair value qualifies to be measured at cost minus impairment.

The Company will reassess at each reporting period whether the equity investments without a readily determinable fair value qualify to be measured at cost minus impairment.

These equity investments without a readily determined fair value include:

• a $ 2.2 million equity interest in a specialized bank technology company as of December 31, 2024 and December 31, 2023;

• a $ 1.8 million and $ 2.2 million equity interest in a specialized bank technology company as of December 31, 2025 and December 31, 2024, respectively;

• a $ 350,000 equity interest in a technology company as of the years ended December 31, 2025 and December 31, 2024;

1 unchanged sentence

The following table shows the activity in equity investments without a readily determinable fair value for the dates shown:

For the Twelve Months Ended

For the Year Ended

(dollars in thousands) 2025 2024 2023

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Carrying value, end of period $ 2,171 $ 2,619 $ 2,622

The Company has invested in funds that are accelerating technology for adoption by banks.

The Company has invested in technology-focused funds, including those targeting innovation and adoption within the banking industry.

These equity investments are held at fair value, as reported by the funds.

During the year ended December 31, 2024, the Company contributed $ 72,000 with investment funds designed to help accelerate technology adoption at banks, and recognized net gains of $ 29,000 , resulting in an equity interest of $ 910,000 at December 31, 2024.

The Company has committed up to $ 480,000 in capital for these equity funds.

During the year ended December 31, 2025, the Company contributed $ 556,000 in these funds and recognized net gains of $ 34,000 , resulting in an equity interest of $ 1.5 million at December 31, 2025, compared to $ 910,000 at December 31, 2024.

The Company has committed up to $ 1.1 million in capital for these equity funds.

The following table shows the activity in equity fund investments held at fair value for the dates shown:

For the Twelve Months Ended

For the Year Ended

(dollars in thousands) 2025 2024 2023

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For installment/closed-end and revolving/open-end consumer loans originated through CCBX lending partners with balances outstanding beyond 120 days and 180 days, respectively, principal and capitalized interest outstanding is charged off against the allowance and accrued interest outstanding is reversed against interest income.

Partners may elect to stop accruing interest on loans prior to the days past due referenced above, and some CCBX partners have instituted a collection practice that places certain loans on nonaccrual status to improve collectibility, but interest will not continue accruing beyond those days.

Partners may discontinue the accrual of interest on loans prior to the days-past-due thresholds referenced above.

The Bank places loans on nonaccrual status when a partner does so, including in circumstances where certain CCBX partners have adopted collection practices that result in earlier nonaccrual classification to enhance collectibility.

In no event does interest continue to accrue beyond the stated delinquency thresholds.

The allowance for credit losses is comprised of amounts charged against income in the form of the provision for credit losses, less charged-off loans, net of recoveries.

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(4) there is little or no near-term prospect for improvement;

and (5) loan modification with principal reduction.

and (5) the loan has been modified with principal reduction.

Subsequent recoveries, if any, are credited to the allowance for credit losses.

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For more information and discussion related to the allowance for credit losses on loans, see “Note 4 - Loans and Allowance for Credit Losses.”

In addition to the ACL on loans held for investment, CECL requires a balance sheet liability for expected losses on unfunded commitments, which is recognized if both the following conditions are met:

(1) the Company has a present contractual obligation to extend credit;

and (2) the obligation is not unconditionally cancellable by the Company.

Loan commitments may have a funded and unfunded portion, of which the liability for unfunded commitments is derived based upon the commitments to extend credit to a borrower.

The expected credit losses for funded portions are reported in the previously discussed ACL.

The unfunded commitments that are not unconditionally cancelable by the Company are allowed for using the same loss rate as the funded commitment applied against the estimated utilization of these commitments and the probability of funding.

The Company records an allowance for credit losses on accrued interest receivable for CCBX loans.

The allowance is estimated using methodologies consistent with the Company’s CECL framework.

Accrued interest is reversed through interest income or written off when loans are placed on nonaccrual status or when collectability is no longer probable.

Loans held-for-sale - During the year ended December 31, 2025, the Company transferred $ 6.69 billion in CCBX loans receivable to loans held for sale.

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The Company sells these loans to provide an additional source of noninterest income without adding on-balance sheet risk.

As of December 31, 2024 there were $ 20.6 million loans held for sale and no loans were held for sale as of December 31, 2023.

of December 31, 2025 there were $ 71.2 million loans held for sale and $ 20.6 million loans were held for sale as of December 31, 2024.

Community bank loans held-for-sale consist of the guaranteed portion of SBA loans and USDA loans the Company intends to sell after origination and are reflected at the lower of aggregate cost or fair value.

Loans are generally sold with servicing of the sold portion retained by the Company when the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a gain on sale of loans in noninterest income.

Loans are generally sold with servicing of the sold portion retained by the Company.

When the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a gain on sale of loans in noninterest income.

There were no community bank loans held for sale at December 31, 2025 and 2024.

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The gain or loss on the sold portion of the loan is based on the difference between the sale proceeds and the allocated investment in the sold portion of the loan.

A discount is recorded against the carrying value of the retained portion of the loan to offset the decrease in the fair value allocation of said retained portion.

A discount is recorded against the carrying value of the retained portion of the loan to offset the decrease in the fair value allocation of said retained portion, as applicable.

CCBX loans sold to originating partners in accordance with partner agreements are typically sold at par, resulting in no gain or loss on sale.

The Company retains the servicing on the sold guaranteed portion of SBA and USDA loans.

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estimate of utilization) for each segment and then utilizes the ACL loss rates for each segment on an aggregate basis to calculate the allowance for unfunded commitments.

The reserve for unfunded commitments was $ 2.5 million and $ 582,000 as of December 31, 2024 and 2023, respectively.

The reserve for unfunded commitments was $ 5.2 million and $ 2.5 million as of December 31, 2025 and 2024, respectively.

The reserve for community bank loans was $ 1.4 million and the reserve for CCBX loans was $ 3.8 million as of December 31, 2025.

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The Company may also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality.

Once the software is substantially complete and ready for its intended use, capitalization ceases and the asset is amortized straight line over its estimated

useful life, which is typically three years.

Once the software is substantially complete and ready for its intended use, capitalization ceases and the asset is amortized straight line over its estimated useful life, which is typically three years.

Amortization expense is included in data processing and software licenses in the Consolidated Statements of Income.

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As of December 31, 2025 and 2024, the Company had no material unrecognized income tax benefits.

The Company recognizes interest accrued and penalties related to unrecognized tax benefits in other noninterest expense.

There were no interest and penalties assessed on income taxes during 2025, 2024 or 2023.

Interest and penalties related to unrecognized tax benefits, if any, would be recognized in other noninterest expense.

Stock-based compensation - Compensation expense is recognized for stock options and restricted stock, based on the fair value of these awards at the grant date.

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Earnings per common share - Earnings per common share (“EPS”) is computed under the two-class method.

Pursuant to the two-class method, nonvested stock based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of EPS.

Pursuant to the two-class method, unvested stock based payment awards that contain non-forfeitable rights to dividends or

dividend equivalents are participating securities and are included in the computation of EPS.

The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.

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Lending activities include the origination of real estate, commercial and industrial, and consumer loans.

Interest income on loans is the Company’s primary source of revenue, and is supplemented by interest income from investment securities, service charges, and other service provided activities.

The CCBX segment provides banking as a service (“BaaS”) that allows our broker-dealer and digital financial service partners to offer their customers banking services.

Interest income on loans is the Company’s primary source of revenue, and is supplemented by interest income from deposits with other banks and investment securities, service charges, and other service provided activities.

The CCBX segment provides banking as a service (“BaaS”) that allows our digital financial service partners to offer their customers banking services.

The CCBX segment has 28 partners as of December 31, 2025.

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Reclassifications - Certain amounts reported in prior years' consolidated financial statements may have been reclassified to conform to the current presentation with no effect on shareholders’ equity or net income.

Restatement of prior period Financial Statements - During the fourth quarter of 2024, the Company completed a review of the accounting treatment for certain CCBX loan types and concluded that it had not appropriately accounted for recognition of interest income and BaaS expense for certain BaaS partner loans in its CCBX segment.

In addition, the Company concluded that reimbursement of expenses associated with certain BaaS partners had not been appropriately accounted for under Topic 606, where the Company acts as an agent.

The Company determined the impacts of these misstatements were material to the previously issued financial statements as of and for the year ended December 31, 2023.

The financial statements as of December 31, 2022 were also revised for certain immaterial items.

See Note 23, Restatement of Prior Period Financial Statements, for additional information and quantification of prior period restatement impacts.

Note 2 - Recent accounting standards

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This ASU is effective for all entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and was implemented by the Company as of the fiscal year ended December 31, 2024.

In November 2023, the FASB issued ASU 2023-07, Income Statement—Reporting Comprehensive Income (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires enhanced disclosures about the nature of expenses included in income statement line items to improve transparency and comparability.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted.

The Company is evaluating the impact of this standard on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures by requiring more detailed information about income tax expense, cash taxes paid, and the effective tax rate reconciliation.

This ASU is effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years and was implemented by the Company as of the fiscal year ended December 31, 2025.

In September 2025, the FASB issued ASU 2025-06, Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which modernizes and clarifies guidance on capitalization of internal-use software costs (including software developed using iterative methods) and related presentation/disclosure considerations.

This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted.

The Company is evaluating the impact of this standard on its capitalization policies and disclosures.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326):

Purchased Loans, which expands and clarifies acquisition-date accounting for certain purchased loans under CECL, including use of a gross-up approach for specified acquired loans.

This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted.

The Company is evaluating the impact of this standard on its accounting for acquired loans and related disclosures.

In November 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, to clarify and improve the guidance related to interim financial reporting.

The ASU enhances the structure and navigability of Topic 270 by consolidating and organizing interim disclosure requirements and clarifying their applicability to entities that issue interim financial statements in accordance with U.S.

The amendments also introduce a disclosure principle requiring entities to disclose material events and changes that occur after the most recent annual reporting period.

The ASU does not significantly expand existing disclosure requirements but is intended to improve transparency and consistency in interim reporting.

This ASU is effective for interim reporting periods in fiscal years beginning after December 15, 2027, and early adoption is permitted.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

Note 3 - Investment Securities

16 unchanged sentences

Available-for-sale

Treasury securities $ 99,996 $ — $ ( 535 ) $ 99,461 $ —

Agency collateralized

6 unchanged sentences

Total investment securities $ 47,323 $ 149 $ ( 732 ) $ 46,740 $ —

Accrued interest on available-for-sale securities was less than $1,000 and $ 718,000 at December 31, 2024 and December 31, 2023, respectively.

Accrued interest on available-for-sale securities was less than $1,000 at December 31, 2025 and December 31, 2024.

Accrued interest on held-to-maturity securities was $ 219,000 and $ 218,000 at December 31, 2025 and December 31, 2024, respectively.

Accrued interest on securities is excluded from the balances in the preceding table of securities receivable, and is included in accrued interest receivable on the Company's consolidated balance sheets.

The amortized cost and fair value of debt securities at December 31, 2024, by contractual maturity, are shown below.

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

Mortgage-backed securities and collateralized mortgage obligations are shown separately, since they are not due at a single maturity date.

The amortized cost and fair value of debt securities at December 31, 2025, are shown below.

The Company’s debt securities portfolio consists of mortgage-backed securities and collateralized mortgage obligations.

Expected maturities may differ from contractual maturities because borrowers underlying these securities generally have the right to prepay obligations, with or without prepayment penalties.

As a result, these securities do not have a single contractual maturity date.

Available-for-Sale Held-to-Maturity

4 unchanged sentences

$ 30 $ 29 $ 48,218 $ 48,713

Investment securities with amortized cost of $ 19.2 million and $ 21.8 million at December 31, 2024 and December 31, 2023 respectively, were pledged to secure public deposits and for other purposes as required or permitted by law and an additional $ 24.0 million and $ 25.0 million in securities were pledged for borrowing lines at December 31, 2024 and December 31, 2023, respectively.

During the twelve months ended December 31, 2024, two securities matured, consisting of a total of $ 100.0 million in AFS U.S.

Treasury securities.

During the twelve months ended December 31, 2024, no securities were purchased.

Investment securities with amortized cost of $ 44.3 million and $ 24.0 million in securities were pledged for borrowing lines at December 31, 2025 and December 31, 2024, respectively.

An additional $ 19.2 million were pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2024, no securities were pledged for these purposes at December 31, 2025.

During the year ended December 31, 2025 the Company purchased two debt securities with an aggregate cost of $ 5.1 million.

No investment securities were purchased during 2024.

During 2023, the Company purchased 16 debt securities with an aggregate book value of $ 50.2 million.

There were no sales of investments during the year ended December 31, 2025, December 31, 2024 or December 31, 2023.

At December 31, 2024 there were sixteen securities with a $ 732,000 unrealized loss.

At December 31, 2023 there were nine securities with a $ 823,000 unrealized loss.

At December 31, 2025, eight securities were in an unrealized loss position, with total gross unrealized losses of $ 215,000 , compared to 16 securities with total gross unrealized losses of $ 732,000 at December 31, 2024.

The following table shows the investments’ gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for which an allowance for credit losses has not been recorded:

11 unchanged sentences

The decline is largely due to changes in market conditions and interest rates, rather than credit quality.

The fair value is expected to recover as the underlying securities in the portfolio approach maturity date and market conditions improve.

The fair value is expected to recover as the underlying securities in the portfolio approach maturity and as market conditions improve.

Management believes there is a high probability of collecting all contractual amounts due because the majority of the securities in the portfolio are backed by government agencies or government sponsored enterprises.

7 unchanged sentences

Partner loan limits are established and documented in the relevant partner agreement.

There were $ 20.6 million loans held for sale as of December 31, 2024 and no loans held for sale as of December 31, 2023.

There were $ 71.2 million loans held for sale as of December 31, 2025 and $ 20.6 million loans held for sale as of December 31, 2024.

Loans Held for Investment

1 unchanged sentence

December 31, December 31,

2024 2023 (1)

(dollars in thousands)

21 unchanged sentences

Loans receivable $ 3,749,531 3,486,565

(1) See Note 23, Restatement of Prior Period Financial Statements.

Accrued interest on loans, which is excluded from the balances in the preceding table of loans receivable, was $ 17.9 million and $ 20.5 million at December 31, 2025 and December 31, 2024, respectively, and was included in accrued interest receivable on the Company's consolidated balance sheets.

Included in commercial and industrial loans is $ 109.0 million and $ 87.5 million in capital call lines, as of December 31, 2024 and December 31, 2023, respectively, provided to venture capital firms through one of our BaaS clients.

Included in commercial and industrial loans is $ 210.5 million and $ 109.0 million in capital call lines, as of December 31, 2025 and December 31, 2024, respectively, provided to venture capital firms through one of our BaaS partners.

These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards and the underwriting is reviewed by the Bank on every line/loan.

Consumer and other loans includes overdrafts of $ 16.9 million and $ 7.4 million at December 31, 2025 and December 31, 2024, respectively.

Community bank overdrafts were $ 147,000 and $ 255,000 at December 31, 2024 and

December 31, 2023, respectively and CCBX overdrafts were $ 7.3 million and $ 2.5 million at December 31, 2024 and December 31, 2023, respectively.

The Company has pledged loans totaling $ 933.9 million and $ 1.01 billion at December 31, 2024 and December 31, 2023, respectively, for borrowing lines at the FHLB and FRB.

Loans are pledged to increase and maintain the borrowing capacity of the Bank in the event of a liquidity crisis.

The balance of SBA and USDA loans and participations serviced for others totaled $ 4.1 million and $ 8.7 million at December 31, 2024 and December 31, 2023, respectively.

The gross balance of MSLP loans participated and serviced for others totaled $ 50.3 million and $ 53.4 million at December 31, 2024 and December 31, 2023, respectively, with $ 2.6 million and $ 2.8 million in MSLP loans on the balance sheet and included in commercial and industrial loans at December 31, 2024 and December 31, 2023, respectively.

Servicing is retained on the gross balance.

The Company, through the community bank, at times purchases individual loans at fair value as of the acquisition date.

The Company held purchased loans with remaining balances totaled $ 6.1 million and $ 8.1 million as of December 31, 2024 and December 31, 2023, respectively.

Unamortized premiums totaled $ 117,000 and $ 154,000 as of December 31, 2024 and December 31, 2023, respectively, and are amortized into interest income over the life of the loans.

These loans are included in the applicable loan category depending upon the collateral and purpose of the individual loan.

The Company, through the community bank, has purchased participation loans with remaining balances totaling $ 29.2 million and $ 53.5 million as of December 31, 2024 and December 31, 2023, respectively.

These loans are included in the applicable loan category depending upon the collateral and purpose of the individual loan.

The Company, through the community bank, purchased loans from CCBX partners, at par, through agreements with those CCBX partners, and those loans had a remaining balance of $ 208.0 million as of December 31, 2024 and $ 45.7 million as of December 31, 2023.

Community bank overdrafts were $ 10,000 and $ 147,000 at December 31, 2025 and December 31, 2024, respectively and CCBX overdrafts were $ 16.8 million and $ 7.3 million at December 31, 2025 and December 31, 2024, respectively.

The Company, through the Bank, purchased loans from CCBX partners, at par, through agreements with those CCBX partners, and those loans had a remaining balance of $ 134.9 million as of December 31, 2025 and $ 208.0 million as of December 31, 2024.

As of December 31, 2025, $ 132.6 million is included in consumer and other loans, and $ 2.3 million is included in commercial and industrial loans, compared to $ 202.7 million in consumer and other loans and $ 5.3 million in commercial and industrial loans as of December 31, 2024.

The Company, through the Bank, at times purchases individual loans at fair value as of the acquisition date.

The Company held purchased loans with remaining balances that totaled $ 4.4 million and $ 6.1 million as of December 31, 2025 and December 31, 2024, respectively.

Unamortized premiums on these loans totaled $ 84,000 and $ 117,000 as of December 31, 2025 and December 31, 2024, respectively, and are amortized into interest income over the life of the loans.

These loans are included in the applicable loan category depending upon the collateral and purpose of the individual loan.

The Company, through the Bank, has purchased participation loans with remaining balances totaling $ 26.9 million and $ 29.2 million as of December 31, 2025 and December 31, 2024, respectively.

These loans are included in the applicable loan category depending upon the collateral and purpose of the individual loan and are underwritten to the Bank's credit standards.

The balance of SBA and United States Department of Agriculture ("USDA") loans and participations sold and serviced for others totaled $ 2.5 million and $ 4.1 million at December 31, 2025 and December 31, 2024, respectively.

The gross balance of the MSLP loans participated and serviced for others, totaled $ 23.1 million at December 31, 2025 and $ 50.3 million at December 31, 2024, with $ 1.2 million in MSLP loans on the balance sheet and included in commercial and industrial loans at December 31, 2025 compared to $ 2.6 million at December 31, 2024.

Servicing is retained on the gross balance.

The Company has pledged loans totaling $ 895.5 million at December 31, 2025 and $ 933.9 million at December 31, 2024, for borrowing lines at the FHLB and FRB.

Loans are pledged to increase and maintain the borrowing capacity of the Bank for liquidity management purposes.

The following is a summary of the Company’s loan portfolio segments:

Commercial and industrial loans - Commercial and industrial loans are secured by business assets including inventory, receivables and machinery and equipment of businesses located generally in the Company’s primary market area and capital calls on venture and investment funds.

Also included in commercial and industrial loans are $ 29.9 million in unsecured loans originated through CCBX partners as of December 31, 2024, compared to $ 52.7 million as of December 31, 2023.

Loan types include revolving lines of credit, term loans, PPP loans, and loans secured by liquid collateral such as cash deposits or marketable securities.

Loan types include revolving lines of credit, term loans, and loans secured by liquid collateral such as cash deposits or marketable securities.

Also included in commercial and industrial loans are loans to other financial institutions.

4 unchanged sentences

In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its customers.

As of December 31, 2025, $ 224.4 million in community bank loans are included in commercial and industrial loans, compared to $ 150.4 million at December 31, 2024.

As of December 31, 2025, $ 229.6 million in loans originated through CCBX partners are included in commercial and industrial loans, compared to $ 143.0 million at December 31, 2024.

For the year ended December 31, 2025, $ 210.5 million in CCBX capital call lines are included in commercial and industrial loans compared to $ 109.0 million at December 31, 2024.

1 unchanged sentence

These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards and the underwriting is reviewed by the Bank on every line/loan.

Also included in commercial and industrial loans are $ 19.2 million in unsecured loans originated through CCBX partners as of December 31, 2025, compared to $ 34.0 million as of December 31, 2024.

Construction, land and land development loans – The Company originates loans for the construction of 1-4 family, multifamily, and CRE properties in the Company’s market area.

2 unchanged sentences

Additionally, the fair value of the underlying collateral may fluctuate as market conditions change.

occasionally originates land loans for the purpose of facilitating the ultimate construction of a home or commercial building.

The Company occasionally originates land loans for the purpose of facilitating the ultimate construction of a home or commercial building.

The primary risks include the borrower’s ability to pay and the inability of the Company to recover its investment due to a material decline in the fair value of the underlying collateral.

As of December 31, 2025, $ 222.1 million in community bank loans are included in construction, land and land development loans compared to $ 148.2 million at December 31, 2024.

Residential real estate - Residential real estate includes various types of loans for which the Company holds real property as collateral.

1 unchanged sentence

The primary risks of residential real estate loans include the borrower’s inability to pay, material decreases in the value of the collateral, and significant increases in interest rates which may make the loan unprofitable.

As of December 31, 2025, $ 202.3 million in community bank loans are included in residential real estate loans, compared to $ 202.1 million at December 31, 2024.

These include multi-family loans, first lien single family loans and home equity lines of credit.

As of December 31, 2025, $ 264.1 million in loans originated through CCBX partners are included in residential real estate loans, compared to $ 267.7 million at December 31, 2024.

2 unchanged sentences

Commercial real estate (includes owner occupied and nonowner occupied) - Commercial real estate loans include various types of loans for which the Company holds real property as collateral.

We have commercial mortgage loans totaling $ 386.8 million that are collateralized by owner-occupied real-estate and $ 565.5 million that are collateralized by non-owner-occupied real estate, as well as $ 412.0 million of multi-family residential loans and $ 10.5 million of farmland loans, as of December 31, 2024.

As of December 31, 2025, $ 1.29 billion in community bank loans are included in commercial real estate loans, compared to $ 1.37 billion at December 31, 2024.

We have commercial mortgage loans totaling $ 374.7 million that are collateralized by owner-occupied real-estate and $ 531.1 million that are collateralized by non-owner-occupied real estate, as well as $ 367.9 million of multi-family residential loans and $ 12.2 million of farmland loans, as of December 31, 2025, compared to $ 386.8 million that are collateralized by owner-occupied real-estate, $ 565.5 million that are collateralized by non-owner-occupied real estate,$ 412.0 million of multi-family residential loans and $ 10.5 million of farmland loans, as of December 31, 2024.

The primary risks of commercial real estate loans include the borrower’s inability to pay, material decreases in the value of the collateralized real estate and significant increases in interest rates, which may make the real estate loan unprofitable.

4 unchanged sentences

Repayment of these loans is dependent on the borrower’s ability to pay and the fair value of the underlying collateral.

As of December 31, 2024, $ 1.19 billion in CCBX loans are included in consumer and other loans compared to $ 811.9 million at December 31, 2023.

Not included in this category is $ 267.7 million and $ 238.0 million as of December 31, 2024 and December 31, 2023, respectively, in home equity lines of credit that are secured by residential real estate and are accessed by using a credit card.

These credit card accessed home equity lines of credit are classified as residential real estate per regulatory guidelines.

As of December 31, 2025, $ 14.1 million in community bank loans are included in consumer and other loans compared to $ 13.5 million at December 31, 2024.

As of December 31, 2025, $ 1.31 billion in CCBX loans are included in consumer and other loans compared to $ 1.19 billion at December 31, 2024.

The following chart breaks out our consumer loan portfolio by segment and type of loan as of December 31, 2025.

The largest portion of our consumer portfolio is comprised of CCBX installment loans and credit card loans.

These loans are further divided to show the total secured and unsecured amounts in each of these categories.

The average overall outstanding consumer loan balance is $ 809 .

(dollars in thousands;

unaudited) Outstanding Balance % of Total Outstanding Balance Consumer Loans

Average Loan Balance Number of Loans

CCBX consumer loans

Installment loans - cash secured $ 162,072 12.2 %

Installment loans - unsecured 502,767 37.8

Installment loans - total 664,839 50.0 $ 0.8 864,638

Credit cards - cash secured 56 0.1

Credit cards - unsecured 622,625 46.9

Credit cards - total 622,681 46.9 1.4 435,236

Lines of credit 10,027 0.8 0.1 89,736

Other loans 16,842 1.3 0.1 252,381

Community bank consumer loans

Lines of credit 140 0.0 4.5 31

Installment loans 3,010 0.2 111.5 27

Other loans 10,922 0.8 28.6 382

Total $ 1,328,461 100.0 % $ 0.8 1,642,431

The following chart breaks out our consumer loan portfolio by segment and type of loan as of December 31, 2024.

The largest portion of our consumer portfolio is comprised of CCBX installment loans and credit card loans.

These loans are further divided to show the total secured and unsecured amounts in each of these categories.

The average overall outstanding consumer loan balance is $ 1,044 .

(dollars in thousands;

unaudited) Outstanding Balance % of Total Outstanding Balance Consumer Loans

Average Loan Balance Number of Loans

CCBX consumer loans

Installment loans - cash secured $ 127,014 10.5 %

Installment loans - unsecured 529,783 43.9

Installment loans - total 656,797 54.4 $ 1.0 690,596

Credit cards - cash secured 211 0.0

Credit cards - unsecured 528,343 43.8

Credit cards - total 528,554 43.8 1.8 301,799

Lines of credit 722 0.1 1.4 524

Other loans 7,261 0.6 — 163,026

Community bank consumer loans

Lines of credit 181 0.0 5.7 32

Installment loans 1,917 0.2 68.5 28

Other loans 11,444 0.9 30.6 374

Total $ 1,206,876 100.0 % $ 1.0 1,156,379

Past due and Nonaccrual Loans

62 unchanged sentences

Loans receivable $ 3,486,565

(1) See Note 23, Restatement of Prior Period Financial Statements.

There were $ 33.1 million in loans past due 90 days or more and still accruing interest as of December 31, 2025, and $ 43.1 million as of December 31, 2024.

1 unchanged sentence

As of December 31, 2025 and December 31, 2024, $ 30.9 million and $ 41.8 million, respectively, of loans past due 90 days or more and still accruing interest are covered by credit enhancements provided by our CCBX partners that protect the Bank against losses.

Some CCBX partners have instituted a collection practice that places certain loans on nonaccrual status to improve collectability and amounts projected to not be collected are written-off.

The accrual of interest on community bank loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due or when they are 90 days past due as to either principal or interest, unless they are well secured and in the process of collection.

Installment/closed-end, and revolving/open-end consumer loans originated through CCBX lending partners will continue to accrue interest until 120 and 180 days past due, respectively, and an allowance is recorded through provision expense for these expected losses.

For installment/closed-end and revolving/open-end consumer loans originated through CCBX lending partners with balances outstanding beyond 120 days and 180 days past due, respectively, principal and capitalized interest outstanding is charged off against the allowance

and accrued interest outstanding is reversed against interest income.

These consumer loans are reported as nonperforming/substandard, 90 days or more days past due and still accruing.

Certain CCBX partners employ collection practices that place specific loans on nonaccrual status to enhance collectability.

As of December 31, 2025, $ 20.3 million of these nonaccrual CCBX loans were less than 90 days past due, compared to $ 17.2 million as of December 31, 2024.

outstanding is charged off against the allowance and accrued interest outstanding is reversed against interest income.

These consumer loans are reported as nonperforming/substandard, 90 days or more past due and still accruing.

When loans are placed on nonaccrual status, all accrued interest is reversed from current period earnings.

5 unchanged sentences

Total Nonaccrual Nonaccrual with No ACL Nonaccrual with

ACL Total Nonaccrual Nonaccrual with No ACL

ACL Total Nonaccrual Nonaccrual with No ACL Nonaccrual with

(dollars in thousands)

Community Bank

Commercial and industrial loans $ 100 $ 100 $ — $ — $ —

Commercial and industrial

loans $ 2,151 $ 2,058 $ 93 $ 100 $ 100 $ —

Real estate loans:

1 unchanged sentence

Commercial real estate 4,344 4,344 — — — —

Total Community Bank nonaccrual loans $ 100 $ 100 $ — $ 7,315 $ 7,315

Commercial and industrial loans $ 234 $ — $ 234 $ — $ —

Total community bank

nonaccrual loans $ 6,533 $ 6,440 $ 93 $ 100 $ 100 $ —

Commercial and industrial

loans $ 127 $ — $ 127 $ 234 $ — $ 234

Consumer and other loans:

Credit cards 21,433 — 21,433 10,262 — 10,262

Consumer and other consumer loans 8,967 — 8,967 — —

Consumer and other

consumer loans 2,875 — 2,875 8,967 — 8,967

Total CCBX nonaccrual loans $ 24,435 $ — $ 24,435 $ 19,463 $ — $ 19,463

Total Consolidated nonaccrual loans $ 19,563 $ 100 $ 19,463 $ 7,315 $ 7,315

Total consolidated nonaccrual

loans $ 30,968 $ 6,440 $ 24,528 $ 19,563 $ 100 $ 19,463

In some circumstances, the Company modifies loans in response to borrower financial difficulty, and generally provides for a temporary modification of loan repayment terms.

In order for a modified loan to be considered for accrual status, the loan’s collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow for an extended period of time, usually at least six months in duration.

One loan was modified for a community bank borrower experiencing financial difficulty in the twelve months ended months ended December 31, 2024, and no community bank loans were modified in the twelve months ended December 31, 2023 .

The Company has no commitment to lend additional amounts to this borrower.

The following table presents the community bank loan that was both experiencing financial difficulty and was modified during the year by class and by type of modification for the periods indicated with the percentage of community bank loans that were modified to borrowers in financial distress as compared to the total of each class of community bank loans.

Also presented is the financial effect of the loan modification to the borrower experiencing financial difficulty for the year ended as indicated.

There was no modified loan for a community bank borrower experiencing financial difficulty at December 31, 2025, and there was one loan at December 31, 2024.

The Company had no commitment to lend additional amounts borrower at December 31, 2025 and December 31, 2024.

No modified community bank loans were 90 days past due or in default at December 31, 2025 and December 31, 2024.

The following table presents the community bank loan that was both experiencing financial difficulty and was modified during the year by class and by type of modification for the period indicated with the percentage of community bank loans that were modified to borrowers in financial distress as compared to the total of each class of community bank loans.

Also presented is the financial effect of the loan modification to the borrower experiencing financial difficulty as of the period indicated.

Financial Effect of the Loan Modifications

4 unchanged sentences

Total $ 101 $ 101 0.01 % $ 82 9.75 %

The Company has no commitment to lend additional amounts to the borrower in the table above.

No community bank modified loans to borrowers experiencing financial difficulty were past due as of December 31, 2024 and there were no payment defaults on this loan during the year ended December 31, 2024.

The following table presents the CCBX loans that were both experiencing financial difficulty and were modified during the years ended December 31, 2024 and 2023 by class and by type of modification for the periods indicated.

The following table presents the CCBX loans that were both experiencing financial difficulty and were modified during the years ended December 31, 2025 and 2024 by class and by type of modification.

The percentage of the CCBX loans that were modified to borrowers in financial distress as compared to the total of each class of CCBX loans is also presented below.

December 31, 2024 Principal Forgiveness Term Extension Interest Rate Reduction Principal Forgiveness & Payment Delay Principal Forgiveness, Payment Delay & Term Extension Total Total Class of Financing Receivable

December 31, 2025 Principal Forgiveness Term Extension Interest Rate Reduction Principal Forgiveness & Payment Delay Interest Rate Reduction & Payment Delay Principal Forgiveness Payment Delay & Term Extension Total Total Class of Financing Receivable

(dollars in thousands)

19 unchanged sentences

December 31, 2025 30-89

Past Due Total Past Due

Past Due Total Past Due Current

(dollars in thousands)

7 unchanged sentences

December 31, 2024 30-89

Past Due Total Past Due

Past Due Total Past Due Current

(dollars in thousands)

20 unchanged sentences

All other commercial & industrial loans

Real estate loans:

Residential real estate loans 42 — n/a

$ 138 — % 1.4

Consumer and other loans:

2 unchanged sentences

Total CCBX $ 14,077 14.6 % 1.6

The following table presents the total of loans that had a payment default during the periods indicated and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

December 31, 2024 Principal Forgiveness Term Extension Interest Rate Reduction Principal Forgiveness & Payment Delay Total

The following table presents the total of loans to borrowers experiencing financial difficulty that had a payment default during the periods indicated and were modified in the twelve months prior to that default.

(dollars in thousands)

6 unchanged sentences

Total $ 12,339 $ 3,895 $ 21,798 $ 644 $ 204 $ 15 $ 38,895

December 31, 2023 Term Extension Interest Rate Reduction Principal Forgiveness & Payment Delay Principal Forgiveness, Payment Delay & Term Extension Total

December 31, 2024 Principal Forgiveness Term Extension Interest Rate Reduction Principal Forgiveness & Payment Delay Total

(dollars in thousands)

12 unchanged sentences

The Company establishes loan grades for loans at the origination of the loan.

Changes to community bank loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower and after loan reviews.

Changes to community bank loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated

financial information from the borrower and after loan reviews.

For consumer loans, the Bank follows the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default.

Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement.

Credit deterioration is evidenced by

delinquency, direct communications with the borrower or other borrower information that becomes known to management.

Credit deterioration is evidenced by delinquency, direct communications with the borrower or other borrower information that becomes known to management.

Credit improvements are evidenced by known facts regarding the borrower or the collateral property.

10 unchanged sentences

If a loan or a portion thereof is classified as Loss, it must be charged-off, meaning the amount of the loss is charged against the allowance for credit losses, thereby reducing that reserve.

Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination.

Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of a loan constitutes a current period origination.

The following tables show the risk category of community bank loans by year of origination for the periods indicated, based on the most recent analysis performed as of each period end:

10 unchanged sentences

other commercial and industrial loans $ 131,644 $ 8,913 $ 33,940 $ 12,240 $ 3,605 $ 5,363 $ 26,478 $ 2,256 $ 224,439

Current period gross charge-offs $ — $ 92 $ — $ — $ — $ 167 $ — $ — $ 259

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2025

Real estate loans - Construction, land and land

3 unchanged sentences

Substandard — — — — — — — — $ —

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2024

Doubtful — — — — — — — — $ —

1 unchanged sentence

and land development loans $ 139,810 $ 67,584 $ 6,838 $ 2,370 $ 239 $ 1,732 $ 3,502 $ — $ 222,075

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Real estate loans - Residential real estate loans

5 unchanged sentences

estate loans $ 29,962 $ 24,678 $ 35,497 $ 34,525 $ 23,262 $ 25,146 $ 28,809 $ 414 $ 202,293

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 13 $ — $ — $ 13

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2025

Real estate loans - Commercial real estate loans

5 unchanged sentences

estate loans $ 153,993 $ 259,048 $ 269,038 $ 210,948 $ 106,140 $ 274,896 $ 10,005 $ 1,788 $ 1,285,856

Current period gross charge-offs $ — $ — $ — $ — $ 41 $ 223 $ — $ — $ 264

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Consumer and other loans - Other consumer and

5 unchanged sentences

consumer and other loans $ 2,526 $ 32 $ 7,394 $ — $ 206 $ 2,710 $ 1,204 $ — $ 14,072

Current period gross charge-offs $ 31 $ — $ — $ — $ — $ — $ — $ — $ 31

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2024

Year-to-date gross charge-offs $ 29 $ 15 $ — $ — $ — $ — $ — $ — $ 44

Total community bank loans receivable

4 unchanged sentences

Total community bank loans $ 457,935 $ 360,255 $ 352,707 $ 260,083 $ 133,452 $ 309,847 $ 69,998 $ 4,458 $ 1,948,735

Current period gross charge-offs $ 31 $ 92 $ — $ — $ 41 $ 390 $ — $ — $ 554

Year-to-date gross charge-offs $ 29 $ 15 $ — $ — $ — $ 13 $ — $ — $ 57

Term Loans Amortized Cost Basis by Origination Year

9 unchanged sentences

other commercial and industrial loans $ 12,016 $ 11,672 $ 43,490 $ 13,177 $ 8,109 $ 7,634 $ 32,801 $ 21,496 $ 150,395

Current period gross charge-offs $ — $ — $ — $ — $ — $ 46 $ — $ — $ 46

Year-to-date gross charge-offs $ — $ 92 $ — $ — $ — $ 167 $ — $ — $ 259

Real estate loans - Construction, land and land

6 unchanged sentences

and land development loans $ 34,089 $ 70,457 $ 34,937 $ 5,180 $ 755 $ 2,180 $ 600 $ — $ 148,198

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2024

Real estate loans - Residential real estate loans

5 unchanged sentences

estate loans $ 15,475 $ 30,332 $ 38,660 $ 37,834 $ 25,844 $ 27,159 $ 26,745 $ 15 $ 202,064

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2023

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Real estate loans - Commercial real estate loans

5 unchanged sentences

estate loans $ 111,558 $ 302,470 $ 283,086 $ 224,751 $ 130,060 $ 312,237 $ 8,982 $ 1,657 $ 1,374,801

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Year-to-date gross charge-offs $ — $ — $ — $ — $ 41 $ 223 $ — $ — $ 264

Term Loans Amortized Cost Basis by Origination Year

Community Bank 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2024

Consumer and other loans - Other consumer and

5 unchanged sentences

consumer and other loans $ 1,447 $ 53 $ 8,269 $ 2 $ 249 $ 3,337 $ 185 $ — $ 13,542

Current period gross charge-offs $ 18 $ — $ — $ — $ — $ — $ — $ — $ 18

Year-to-date gross charge-offs $ 31 $ — $ — $ — $ — $ — $ — $ — $ 31

Total community bank loans receivable

4 unchanged sentences

Total community bank loans $ 174,585 $ 414,984 $ 408,442 $ 280,944 $ 165,017 $ 352,547 $ 69,313 $ 23,168 $ 1,889,000

Current period gross charge-offs $ 18 $ — $ — $ — $ — $ 46 $ — $ — $ 64

Year-to-date gross charge-offs $ 31 $ 92 $ — $ — $ 41 $ 390 $ — $ — $ 554

The Company considers the performance of the CCBX loan portfolio and its impact on the allowance for credit losses.

5 unchanged sentences

As of December 31, 2025

Commercial and industrial loans - Capital call lines

Commercial and industrial loans - Capital

Payment performance

3 unchanged sentences

call lines $ — $ — $ — $ — $ — $ — $ 210,480 $ — $ 210,480

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial and industrial loans - All other

5 unchanged sentences

other commercial and industrial loans $ — $ 15 $ 11,910 $ 1,988 $ — $ 2 $ 5,251 $ — $ 19,166

Current period gross charge-offs $ 503 $ 11,845 $ 1,956 $ 2 $ 5 $ — $ 986 $ — $ 15,297

Year-to-date gross charge-offs $ — $ 18 $ 5,164 $ 817 $ 4 $ 4 $ 816 $ — $ 6,823

Real estate loans - Residential real estate loans

4 unchanged sentences

loans $ — $ — $ — $ — $ — $ — $ 262,107 $ 1,952 $ 264,059

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ 5,006 $ — $ 5,006

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ 4,923 $ — $ 4,923

Term Loans Amortized Cost Basis by Origination Year

CCBX 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2025

Consumer and other loans - Credit cards

3 unchanged sentences

Total consumer and other loans - Credit cards $ — $ — $ — $ — $ — $ — $ 622,653 $ 28 $ 622,681

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ 130,825 $ — $ 130,825

Term Loans Amortized Cost Basis by Origination Year

CCBX 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2024

Consumer and other loans - Other consumer and

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ 109,468 $ — $ 109,468

Consumer and other loans - Other consumer

and other loans

Payment performance

3 unchanged sentences

consumer and other loans $ 395,346 $ 172,598 $ 78,468 $ 22,922 $ 1,000 $ 99 $ 21,275 $ — $ 691,708

Current period gross charge-offs $ 13,759 $ 34,352 $ 14,702 $ 3,580 $ 24 $ 282 $ 10,710 $ — $ 77,409

Year-to-date gross charge-offs $ 9,522 $ 36,940 $ 23,660 $ 7,840 $ 734 $ 2 $ 17,220 $ — $ 95,918

Total CCBX loans receivable

3 unchanged sentences

Total CCBX loans $ 395,346 $ 172,613 $ 90,378 $ 24,910 $ 1,000 $ 101 $ 1,121,766 $ 1,980 $ 1,808,094

Current period gross charge-offs $ 14,262 $ 46,197 $ 16,658 $ 3,582 $ 29 $ 282 $ 147,527 $ — $ 228,537

Year-to-date gross charge-offs $ 9,522 $ 36,958 $ 28,824 $ 8,657 $ 738 $ 6 $ 132,427 $ — $ 217,132

Term Loans Amortized Cost Basis by Origination Year

8 unchanged sentences

call lines $ — $ — $ — $ — $ — $ — $ 109,017 $ — $ 109,017

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial and industrial loans - All other

5 unchanged sentences

commercial and industrial loans $ 1,049 $ 23,830 $ 4,093 $ 5 $ 12 $ — $ 4,972 $ — $ 33,961

Current period gross charge-offs $ 3,848 $ 2,502 $ 15 $ 16 $ — $ — $ 224 $ — $ 6,605

Year-to-date gross charge-offs $ 503 $ 11,845 $ 1,956 $ 2 $ 5 $ — $ 986 $ — $ 15,297

Real estate loans - Residential real estate loans

4 unchanged sentences

loans $ — $ — $ — $ — $ — $ — $ 258,387 $ 9,320 $ 267,707

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ 4,641 $ — $ 4,641

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ 5,006 $ — $ 5,006

Term Loans Amortized Cost Basis by Origination Year

CCBX 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total

(dollars in thousands)

As of December 31, 2024

Consumer and other loans - Credit cards

3 unchanged sentences

Total consumer and other loans - Credit cards $ — $ — $ — $ — $ — $ — $ 528,507 $ 47 $ 528,554

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ 61,358 $ — $ 61,358

Term Loans Amortized Cost Basis by Origination Year

CCBX 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term Total (1)

(dollars in thousands)

As of December 31, 2023

Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ 130,825 $ — $ 130,825

Consumer and other loans - Other consumer and other

4 unchanged sentences

consumer and other loans $ 432,125 $ 160,846 $ 49,009 $ 2,634 $ 47 $ 207 $ 19,912 $ — $ 664,780

Current period gross charge-offs $ 17,815 $ 43,115 $ 11,574 $ 84 $ 346 $ 217 $ 6,178 $ — $ 79,329

Year-to-date gross charge-offs $ 13,759 $ 34,352 $ 14,702 $ 3,580 $ 24 $ 282 $ 10,710 $ — $ 77,409

Total CCBX loans receivable

3 unchanged sentences

Total CCBX loans $ 433,174 $ 184,676 $ 53,102 $ 2,639 $ 59 $ 207 $ 920,795 $ 9,367 $ 1,604,019

Current period gross charge-offs $ 21,663 $ 45,617 $ 11,589 $ 100 $ 346 $ 217 $ 72,401 $ — $ 151,933

(1) See Note 23, Restatement of Prior Period Financial Statements.

Year-to-date gross charge-offs $ 14,262 $ 46,197 $ 16,658 $ 3,582 $ 29 $ 282 $ 147,527 $ — $ 228,537

Allowance for Credit Losses ("ACL")

1 unchanged sentence

Agreements with our CCBX partners provide for a credit enhancement which protects the Bank by reimbursing most losses.

In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts.

In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans, reclassified negative deposit accounts and accrued interest receivable on CCBX loans.

When the provision for CCBX credit losses and provision for unfunded commitments are recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements).

1 unchanged sentence

The credit enhancement asset is reduced when credit enhancement payments are received from the CCBX partner or taken from the partner's cash reserve account.

CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses by reimbursing the Bank for the losses.

CCBX partners provide for credit enhancements

that provide protection to the Bank from credit and fraud losses by reimbursing the Bank for the losses.

If the partner is unable to fulfill its contracted obligations then the Bank could be exposed to the loss of the reimbursement and credit enhancement income.

In accordance with the program agreement for one CCBX partner, the Company is responsible for credit losses on approximately 5 % of a $ 324.6 million loan portfolio that are without credit enhancement reimbursements.

In accordance with the program agreement for one CCBX partner, the Company is responsible for credit losses on approximately 5 % of a $ 321.3 million loan portfolio that is without credit enhancements.

At December 31, 2025, 5 % of this portfolio represented $ 22.1 million in loans.

1 unchanged sentence

The Company earns 100 % of the interest income on the aforementioned $ 22.1 million of loans.

The following tables summarize the allocation of the ACL, as well as the activity in the ACL attributed to various segments in the loan portfolio, as of and for the years ended December 31, 2024 and December 31, 2023.

The following table summarizes the allocation of the ACL, as well as the activity in the ACL attributed to various segments in the loan portfolio, as of and for the years ended December 31, 2025, December 31, 2024 and December 31, 2023.

Industrial Construction,

4 unchanged sentences

(dollars in thousands)

Twelve Months Ended December 31, 2024

Year Ended December 31, 2025

ACL Balance, December 31, 2024 $ 11,051 $ 3,439 $ 12,250 $ 8,456 $ 141,798 $ — $ 176,994

5 unchanged sentences

ACL balance, December 31, 2025 $ 8,757 $ 6,580 $ 11,100 $ 5,496 $ 137,597 $ — $ 169,530

Twelve Months Ended December 31, 2023 (1)

ALLL Balance, December 31, 2022 $ 4,831 $ 7,425 $ 4,142 $ 5,470 $ 50,996 $ 1,165 $ 74,029

Impact of adopting CECL (ASC 326) 1,428 ( 1,589 ) 1,623 1,240 2,315 ( 1,165 ) $ 3,852

Year Ended December 31, 2024

ACL Balance, December 31, 2023 $ 8,894 $ 6,386 $ 13,049 $ 7,441 $ 81,611 $ — $ 117,381

Provision for credit losses or (recapture) 16,605 ( 2,947 ) 4,199 1,279 256,527 — 275,663

4 unchanged sentences

ACL Balance, December 31, 2024 $ 11,051 $ 3,439 $ 12,250 $ 8,456 $ 141,798 $ — $ 176,994

(1) See Note 23, Restatement of Prior Period Financial Statements.

There was an unfunded commitments provision of $ 1.9 million for the twelve months ended December 31, 2024 and an unfunded commitments recapture of $ 51,000 for the twelve months ended December 31, 2023.

The following table presents the collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

Business Assets Total ACL

Year Ended December 31, 2023

ALLL Balance, December 31, 2022 $ 4,831 $ 7,425 $ 4,142 $ 5,470 $ 50,996 $ 1,165 $ 74,029

Impact of adopting CECL (ASC 326) 1,428 ( 1,589 ) 1,623 1,240 2,315 ( 1,165 ) $ 3,852

Provision for credit losses 9,264 550 11,921 731 161,577 — 184,043

15,523 6,386 17,686 7,441 214,888 — 261,924

Loans charged-off ( 6,651 ) — ( 4,641 ) — ( 140,705 ) — ( 151,997 )

Recoveries of loans previously charged-off 22 — 4 — 7,428 — 7,454

ACL Balance, Net charge-offs ( 6,629 ) — ( 4,637 ) — ( 133,277 ) — ( 144,543 )

ACL Balance, December 31, 2023 $ 8,894 $ 6,386 $ 13,049 $ 7,441 $ 81,611 $ — $ 117,381

There was an unfunded commitments provision of $ 2.6 million for the year ended December 31, 2025 and $ 1.9 million for the year ended December 31, 2024.

The following tables present the collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of the periods presented:

Real Estate Business Assets Total ACL

(dollars in thousands)

1 unchanged sentence

Commercial and industrial loans $ — $ 190 $ 190 $ 93

Total $ 100 $ 100 $ —

Real Estate Total ACL

(dollars in thousands)

December 31, 2023

Real estate loans:

2 unchanged sentences

Total $ 4,383 $ 190 $ 4,573 $ 93

Business Assets Total ACL

(dollars in thousands)

December 31, 2024

Commercial and industrial loans $ 100 $ 100 $ —

Total $ 100 $ 100 $ —

Note 5 – Premises and Equipment

The investment in premises and equipment consisted of the following at December 31:

The investment in premises and equipment consisted of the following as of the periods presented:

(dollars in thousands)

10 unchanged sentences

Depreciation and amortization on land, buildings, leasehold improvements, furniture and equipment is charged to occupancy expense and totaled $ 1.5 million, $ 1.5 million and $ 1.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Amortization on software is charged to data processing and software licenses and totaled $ 3.0 million, $ 754,000 and $ 329,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

Amortization on software is charged to data processing and software licenses and totaled $ 5.1 million, $ 3.0 million and $ 754,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

Note 6 – Leases

4 unchanged sentences

The Company’s leases do not provide an implicit interest rate, therefore the Company used its incremental collateralized borrowing rates commensurate with the underlying lease terms to determine the present value of operating and finance lease liabilities at the inception of the lease.

The weighted average discount rate as of December 31, 2024 was

for operating leases and 4.75 % for finance leases and is based off the discount rate and term at the time the lease is originated or renewed.

The weighted average discount rate as of December 31, 2025 was 4.0 % for operating leases and 4.75 % for finance leases and is based off the discount rate and term at the time the lease is originated or renewed.

The Company’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately.

The Company’s lease agreements do not contain any residual value guarantees.

Operating leases with original terms of 12 months or less are not included in ROU assets and operating lease liabilities recorded in our consolidated balance sheets.

Operating leases with original terms of 12 months or less are not included in ROU assets and corresponding operating lease liabilities are not recorded in our consolidated balance sheets.

Operating lease terms include options to extend when it is reasonably certain that the Company will exercise such options, determined on a lease-by-lease basis.

At December 31, 2024, lease expiration dates ranged from less than one month to 21.2 years, with additional renewal options on certain leases typically ranging from zero to 10 years.

At December 31, 2025, lease expiration dates ranged from less than twelve months to 21.2 years, with additional renewal options on certain leases typically ranging from zero to 10 years.

At December 31, 2025, the dollar weighted average remaining lease term for the Company’s operating leases was 7.4 years.

The weighted average remaining lease term for the Company's finance lease was 1.8 years.

Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $ 1.2 million for the years ended December 31, 2024 and 2023 and $ 1.4 million for the year ended December 31, 2022.

The weighted average remaining lease term for the Company's finance lease was 9 months.

Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $ 1.2 million for the years ended December 31, 2025, 2024 and 2023.

Variable lease components, such as inflation adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Amortization expense for finance leases is recognized on a straight-line basis over the lease term and amounted to $ 43,000 for the twelve months ended December 31, 2024.

Interest on finance leases was $ 5,000 for the twelve months ended December 31, 2024.

This is a new lease for 2024, so there was no amortization or interest expense for the twelve months ended December 31, 2023 and 2022.

Amortization expense for the finance lease is recognized on a straight-line basis over the lease term and amounted to $ 34,000 and $ 43,000 for the year December 31, 2025 and December 31, 2024, respectively.

Interest on the finance lease was $ 2,000 and $ 5,000 for the year December 31, 2025 and December 31, 2024, respectively.

There was no amortization expense or interest on finance leases in 2023.

The following sets forth, as of December 31, 2025, the minimum annual lease payments under the terms of these leases, inclusive of renewal options that the Company is reasonably certain to renew:

8 unchanged sentences

Lease and sublease income was $ 180,000 , $ 204,000 and $ 205,000 for 2025, 2024 and 2023, respectively.

The following table presents the components of total lease expense and operating cash flows for the year ended December 31, 2024:

The following table presents the components of total lease expense and operating cash flows for the periods presented:

For the Year Ended

8 unchanged sentences

Right-of-use amortization (2)

$ 34 $ 43 $ —

Interest expense (3)

35 unchanged sentences

Weighted average interest rate during period:

5.66 % 5.60 %

Balance outstanding at end of period:

Weighted average interest rate at end of period:

(1) No borrowings were outstanding during the period, except for an immaterial borrowing incurred to test the advance line.

The Company has established a $ 50.0 million unsecured line of credit with interest payable at the then-stated rate, with PCBB, which expires in June 2026.

18 unchanged sentences

The note matures on November 1, 2032 , is fixed for five years at 7.000 %, and thereafter is variable at a floating rate, calculated quarterly, based on the 3-month SOFR + 2.90 %.

Subordinated debt interest expense of $ 2.4 million was recognized during 2024 and 2023 and $ 1.2 million was recognized during 2022, and accrued interest payable on these notes totaled $ 515,000 at December 31, 2024 and 2023.

Subordinated debt interest expense of $ 2.4 million was recognized during the years ended December 31, 2025, 2024 and 2023.

Accrued interest payable on these notes totaled $ 515,000 at December 31, 2025 and 2024.

Note 10 – Junior Subordinated Debentures

8 unchanged sentences

Total liability, at carrying value $ 3,593 $ 3,591

Stated Maturity:

December 15, 2034

On December 15, 2004, the Company issued $ 3.6 million floating rate junior subordinated debentures to Coastal (WA) Statutory Trust I, which was formed for the issuance of trust preferred securities.

10 unchanged sentences

Note 11 – Income Taxes

Income taxes paid were as follows:

(dollars in thousands) 2025 2024 2023

Cash taxes paid, net of refunds

Federal $ 5,871 $ 9,750 $ 6,000

California (1)

Other domestic 460 ( 355 ) 412

Foreign — — —

Total tax expense $ 7,631 $ 9,920 $ 6,412

(1) The amount of income taxes paid during 2023 does not meet the 5% disaggregation threshold.

Pretax income is entirely related to domestic activities.

The Company did not have any foreign operations.

The components of the income tax for the Company consisted of the following at December 31:

2024 2023 2022

(dollars in thousands) 2025 2024 2023

Current tax expense (benefit)

Deferred tax expense (benefit) 138 13,879 ( 11,018 )

Federal $ 7,744 $ 10,486 $ ( 1,365 )

State 2,055 1,474 40

Total current tax expense (benefit) 9,799 11,960 ( 1,325 )

Deferred tax expense

Federal 3,862 50 12,313

State 591 88 1,566

Total deferred tax expense 4,453 138 13,879

Total tax expense $ 14,252 $ 12,098 $ 12,554

At December 31, 2025 the current net income tax receivable was $ 4.9 million, and at December 31, 2024 the net income tax receivable was $ 7.1 million .

The significant change in current and deferred tax expense from 2022 to 2023 is related to the Company filing income tax refund claims related to the tax treatment of the credit enhancement recovery.

A reconciliation of the income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate to the income before income taxes is as follows for the year ended December 31:

2024 2023 2022

(dollars in thousands)

2025 2024 2023

Amount Rate Amount Rate Amount Rate

Federal income tax at statutory rate $ 12,861 21.0 % $ 12,037 21.0 % $ 11,998 21.0 %

State income taxes 1,284 2.2 1,275 2.2 523 1.0

State income taxes, net of federal

income tax effect (1)

2,091 3.4 1,284 2.2 1,275 2.2

Nontaxable or nondeductible items

Excess executive compensation 1,695 2.8 167 0.3 145 0.3

1 unchanged sentence

Bank owned life insurance earnings ( 108 ) ( 0.2 ) ( 102 ) ( 0.2 ) ( 39 ) ( 0.1 )

Other 34 0.1 33 0.1 41 0.1

Stock-based compensation ( 2,016 ) ( 3.3 ) ( 993 ) ( 1.7 ) ( 728 ) ( 1.3 )

Other ( 240 ) ( 0.4 ) ( 257 ) ( 0.5 ) ( 61 ) ( 0.1 )

$ 12,098 21.1 % $ 12,554 22.0 % $ 9,996 19.7 %

Total tax (benefit) expense $ 14,252 23.3 % $ 12,098 21.1 % $ 12,554 22.0 %

(1) For the year ended December 31, 2025, state taxes in California made up the majority (greater than 50%) of the tax effect in this category.

For the years ended December 31, 2024 and 2023, state taxes in California and Georgia made up the majority (greater than 50%) of the tax effect in this category.

The Company did not record or accrue any interest and penalties related to income taxes for the years ended December 31, 2025, 2024 or 2023.

2 unchanged sentences

The net deferred tax asset consists of the following temporary differences and carryforward items at December 31:

2024 2023 (1)

(dollars in thousands) 2025 2024

2 unchanged sentences

Lease liability 1,219 1,245

Stock based compensation 1,220 983

Accrued expenses 799 582

Deferred compensation 65 76

Net unrealized loss on available-for-sale securities — 69

Stock based compensation 1,132 1,220

Section 174 costs — 801

Other 2,448 829

1 unchanged sentence

Deferred tax liabilities:

Credit enhancement recovery ( 40,101 ) ( 25,030 )

Right of use asset ( 1,179 ) ( 1,203 )

Depreciation and amortization ( 284 ) ( 365 )

Credit enhancement recovery ( 43,196 ) ( 40,101 )

Section 174 costs ( 3,299 ) —

Other ( 160 ) ( 218 )

Total deferred tax liabilities ( 48,118 ) ( 41,887 )

Net deferred tax asset $ 3,600 $ 3,806

(1) see Note 23, Restatement of Prior Period Financial Statements

Net deferred tax (liability) asset $ ( 853 ) $ 3,600

The determination of the amount of deferred income tax assets which are more likely than not to be realized is primarily dependent on projections of future earnings, which are subject to uncertainty and estimates that may change given economic conditions and other factors.

2 unchanged sentences

All available evidence, both positive and negative is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed.

Based upon its

analysis of available evidence, including recent profitability, management has determined that it is “more likely than not” that the Company’s deferred income tax assets as of December 31, 2024 will be fully realized and therefore no valuation allowance was recorded.

Based upon its analysis of available evidence, including recent profitability, management has determined that it is “more likely than not” that the Company’s deferred income tax assets as of December 31, 2025 will be fully realized and therefore no valuation allowance was recorded.

CCBX partners reimburse the Bank for credit losses on loans covered by credit enhancements, therefore the credit enhancement recovery deferred tax liability partially offsets the allowance for credit losses deferred tax asset.

13 unchanged sentences

Payments ( 463 ) ( 403 )

No longer related parties ( 1,138 ) —

Ending Balance December 31 $ 14,160 $ 12,641

The Company held deposits of $ 3.9 million and $ 4.0 million from directors, principal shareholders and executive officers at December 31, 2024 and 2023, respectively.

The Company held deposits of $ 4.3 million and $ 3.9 million from directors, principal shareholders and key executive officers at December 31, 2025 and 2024, respectively.

All deposits included in such transactions were made on substantially the same terms, including interest rate, as those prevailing at the time for comparable transactions with other persons.

4 unchanged sentences

For fiscal years ended December 31, 2025, 2024 and 2023, total payments to Adams and Duncan, Inc.

for legal services were $ 971,000 , $ 1.0 million and $ 864,000 respectively.

for legal services were $ 1.3 million, $ 971,000 and $ 1.0 million, respectively.

The Company leased one facility from a related party in 2023.

2 unchanged sentences

The current lease is through March 2034.

Monthly rent under the Everett lease was $ 46,000 through March 2023 and decreased to $ 19,000 a month beginning in May 2023, due to a lower lease rate and a reduction in the square footage leased;

rent for April of 2023 was a blended rate.

Rents paid during 2023 and 2022 for the related party Everett lease totaled $ 316,000 and $ 546,000 , respectively.

Rents paid during 2023 for the related party Everett lease totaled $ 316,000 .

Note 13 – Commitments and Contingencies

2 unchanged sentences

The Company uses the same credit policies in making such commitments as it does for instruments that are included in the consolidated balance sheets.

At December 31, 2024 and 2023, the Company had a reserve for unfunded commitments of $ 2.5 million and $ 582,000 , respectively, included in other liabilities on the consolidated balance sheet.

At December 31, 2025 and 2024, the Company had a reserve for unfunded commitments of $ 5.2 million and $ 2.5 million, respectively, included in other liabilities on the consolidated balance sheet.

The following table presents commitments associated with outstanding commitments to extend credit, standby and commercial letters of credit and equity investment commitments as of the periods indicated:

24 unchanged sentences

Commitments to extend credit on CCBX loans are included in the table above and are summarized below:

(dollars in thousands) 2024 2023

(dollars in thousands) December 31

2025 December 31

Commitments to extend credit:

4 unchanged sentences

Total commitments to extend credit $ 2,049,212 $ 1,756,426

As of December 31, 2024, $ 1.30 billion in CCBX commitments to extend credit are unconditionally cancelable, compared to $ 1.63 billion at December 31, 2023.

These unconditionally cancelable commitments are attributed to activity in CCBX loans.

As of December 31, 2025, $ 1.42 billion in CCBX commitments to extend credit were unconditionally cancelable, compared to $ 1.30 billion at December 31, 2024.

Commitments that are unconditionally cancelable allow us to manage loan growth, credit concentrations and liquidity.

3 unchanged sentences

Capital call lines Business - Venture Capital $ 350,000

All other commercial & industrial loans

All other commercial & industrial

Business - Small Business 515,589

4 unchanged sentences

Installment loans Consumer 1,740,813

Other consumer and other loans Consumer - Secured Credit Builder & Unsecured consumer 5,398

Other consumer and other loans Consumer - Secured Credit Builder &

Unsecured consumer 478,598

The Company also has agreements with certain key officers that provide for potential payments upon retirement, disability, termination, change in control and death.

10 unchanged sentences

The movement to an alternate BaaS provider is cumbersome and would be over a period of time, which would allow us the opportunity to put alternate liquidity in place.

As of December 31, 2024, we have two partners with deposits that are in excess of 10% of total deposits and represent 44% of total deposits.

As of December 31, 2025, we had two partners with deposits that together represent 45% of total deposits.

Our maximum concentration for any one partner is 30% of total assets.

Loans to the same borrower are generally limited, by state banking regulations, to 20 % of the Bank’s capital and surplus.

7 unchanged sentences

The 2018 Coastal Financial Corporation Omnibus Plan (“2018 Plan”) authorizes the Company to grant awards, including but not limited to, stock options, restricted stock units, and restricted stock awards, to eligible employees, directors or individuals that provide service to the Company, up to an aggregate of 500,000 shares of common stock.

On May 24, 2021, the Company’s shareholders approved the First Amendment to the 2018 Plan, which increased the

authorized plan shares by 600,000 .

On May 24, 2021, the Company’s shareholders approved the First Amendment to the 2018 Plan, which increased the authorized plan shares by 600,000 .

On May 28, 2025, the Company's shareholders approved the Second Amendment to the 2018 Plan which increased the authorized plan shares by 600,000 .

The 2018 Plan replaced both the 2006 Plan and the Directors’ Stock Bonus Plan.

25 unchanged sentences

The intrinsic value of options exercised during the year ended December 31, 2024 was $ 6.7 million.

As of December 31, 2024, there was $ 523,000 of total unrecognized compensation cost related to nonvested stock options granted under the Plan.

Total unrecognized compensation costs is adjusted for unvested forfeitures.

As of December 31, 2025, there was $ 284,000 of total unrecognized compensation cost related to unvested stock options granted under the Plan.

Total unrecognized compensation cost is adjusted for unvested forfeitures.

The Company expects to recognize that cost over a weighted-average period of approximately 2.1 years.

Compensation expense recorded related to stock options was $ 602,000 , $ 274,000 and $ 319,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

Included in stock option compensation expense for the year ended December 31, 2025 is $ 449,000 related to the acceleration of certain equity awards in connection with retirements and employment separations.

This total amount includes both the immediate recognition of previously unrecognized compensation cost and $ 375,000 of incremental compensation expense resulting from award modifications.

Restricted Stock Units

During the year ended December 31, 2024, the Company granted 163,901 restricted stock units under the 2018 Plan to employees, which vest ratably over various terms ranging from 3 years to 5 years.

Additionally, the Company granted to an employee 60,000 performance-based restricted stock units ("PSUs") under the 2018 Plan that are eligible to vest on the first day of each month beginning on October 1, 2024 until April 30, 2028, subject to continuous employment with the Company and the achievement of certain stock price conditions, and 15,000 PSUs that are eligible to vest on April 30, 2028, subject to continuous employment with the Company and the achievement of specified performance goals.

Restricted stock units provide for an interest in Company common stock to the recipient, the underlying stock is not issued until certain conditions are met.

During the year ended December 31, 2025, the Company granted 108,710 restricted stock units under the 2018 Plan to employees, which vest ratably over various terms ranging from four years to five years .

Additionally, the Company granted 64,435 performance-based restricted stock units ("PSUs") under the 2018 Plan that are eligible to vest over various terms ranging from 5.0 years to 1 year, 6 months .

RSUs provide for an interest in Company common stock to the recipient, the underlying stock is not issued until certain conditions are met.

Vesting requirements include time-based, performance-based, or market-based conditions.

Recipients of restricted stock units do not pay any cash consideration to the Company for the units and the holders of the restricted units do not have voting rights.

Recipients of RSUs do not pay any cash consideration to the Company for the units and the holders of the restricted units do not have voting rights.

The fair value of time-based and performance-based units is equal to the fair market value of the Company’s common stock on the grant date.

The fair value of market-based units is estimated on the grant date using a Monte Carlo simulation model.

The fair value of market-based units is estimated on the grant date using the Monte Carlo simulation model.

Compensation expense is recognized over the vesting period that the awards are based.

Restricted stock units are nonparticipating securities.

As of December 31, 2024, there was $ 15.2 million of total unrecognized compensation cost related to nonvested restricted stock units.

RSUs are nonparticipating securities.

As of December 31, 2025, there was $ 18.0 million of total unrecognized compensation cost related to unvested restricted stock units.

The Company expects to recognize that cost over the remaining weighted-average vesting period of approximately 3.2 years.

Compensation expense recorded related to restricted stock units was $ 7.0 million, $ 3.9 million and $ 2.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

A summary of the Company’s nonvested restricted stock units at December 31, 2024 and changes during the year is presented below:

Nonvested shares - RSUs Number of Shares Weighted-

(dollars in thousands, except per share amounts)

Nonvested shares at December 31, 2023 409,271 $ 31.22

Included in restricted stock unit compensation expense for the year ended December 31, 2025 is $ 1.9 million related to the acceleration of certain equity awards in connection with retirements and employment separations.

This total amount includes both the immediate recognition of previously unrecognized compensation cost and $ 959,000 of incremental compensation expense resulting from award modifications.

A summary of the Company’s unvested restricted stock units at December 31, 2025 and changes during the year is presented below:

Unvested shares - RSUs Number of Shares Weighted-

Unvested shares at December 31, 2024 563,384 $ 36.20

Granted 173,145 $ 79.77

1 unchanged sentence

Vested ( 173,832 ) $ 42.59

Nonvested shares at December 31, 2024 563,384 $ 36.20

Unvested shares at December 31, 2025 476,302 $ 51.93

Restricted Stock Awards

3 unchanged sentences

Restricted stock awards are participating securities.

As of December 31, 2024, there was $ 28,000 of total unrecognized compensation cost related to nonvested restricted stock awards.

The Company expects to recognize that cost over the remaining weighted-average vesting period of approximately 3.1 years.

Compensation expense recorded related to restricted stock awards was $ 9,000 for the years ended December 31, 2024, 2023 and 2022.

As of December 31, 2025, there was no unrecognized compensation cost related to unvested restricted stock awards.

Compensation expense recorded related to restricted stock awards was $ 167,000 for the year ended December 31, 2025, and $ 9,000 for the years ended December 31, 2024 and 2023.

Included in restricted stock award compensation expense for the year ended December 31, 2025 is $ 160,000 related to the acceleration of certain equity awards in connection with retirements and employment separations.

This total amount includes both the immediate recognition of previously unrecognized compensation cost and $ 139,000 of incremental compensation expense resulting from award modifications.

Director’s Stock Bonus

6 unchanged sentences

Director compensation expense recorded related to the 2018 Plan totaled $ 823,000 , $ 625,000 and $ 432,000 for the for the years ended December 31, 2025, 2024 and 2023, respectively.

A summary of the Company’s nonvested shares at December 31, 2024 and changes during the year is presented below:

Nonvested shares - RSAs Number of Shares Weighted-

(dollars in thousands, except per share amounts)

Nonvested shares at December 31, 2023 16,038 $ 32.41

A summary of the Company’s unvested shares at December 31, 2025 and changes during the year is presented below:

Unvested shares - RSAs Number of Shares Weighted-

Unvested shares at December 31, 2024 18,698 $ 40.90

Granted 10,039 $ 87.19

1 unchanged sentence

Vested ( 18,698 ) $ 50.81

Nonvested shares at December 31, 2024 18,698 $ 40.90

Unvested shares at December 31, 2025 10,039 $ 87.19

Note 16 – Employee Benefit Plans

13 unchanged sentences

Compensation expense related to this Plan was $ 21,000 , $ 29,000 and $ 39,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

Payments of accrued benefits totaling $ 175,000 were made during 2024, 2023 and 2022.

Payments of accrued benefits totaling $ 86,000 were made during 2025, and $ 175,000 each for 2024 and 2023.

Note 17 - Regulatory Matters

1 unchanged sentence

Failure to meet minimum capital requirements can initiate certain mandatory (and possibly additional discretionary) actions by regulators that, if undertaken, could have a direct material effect on the financial statements of the Bank and the Company.

A bank holding company that crosses the $3.0 billion total consolidated assets threshold as of June 30 of a particular year is no longer permitted to file reports as a small holding company beginning the following March.

The Company’s total consolidated assets were in excess of $3.0 billion as of June 30, 2023, and as a consequence, beginning in March 2024, the Company ceased preparing and filing financial reports with the Federal Reserve as a small bank holding company.

Under the regulatory capital adequacy guidelines, the Company and Bank must meet specific capital adequacy guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices.

8 unchanged sentences

Management believes the Company and the Bank exceed all capital adequacy requirements to which they are subject, including the ratios described below and the capital conservation buffer, as of December 31, 2025.

The Company and Bank’s actual and required capital amo unts and ratios are as follows:

The Company’s and Bank’s actual and required capital amo unts and ratios are as follows:

Actual Minimum Required

33 unchanged sentences

The capital conservation buffer is an additional 2.5% of the amount necessary to meet the minimum risk-based capital requirements for total, tier 1, and common equity tier 1 risk-based capital.

Prior to September 30, 2022, the Company operated under the Small Bank Holding Company Policy Statement and therefore was not subject to Basel III capital adequacy requirements.

Note 18 - Fair Value Measurements

26 unchanged sentences

Other investments 10,800 10,800 — 8,181 2,619

Loans held for sale 20,600 20,600 — 20,600

Loans receivable, net 3,486,565 3,460,131 — — 3,460,131

5 unchanged sentences

Accrued interest payable 962 962 — 962 —

(1) See Note 23, Restatement of Prior Period Financial Statements.

The Company measures and discloses certain assets and liabilities at fair value.

26 unchanged sentences

Available-for-sale

Treasury securities $ 99,461 $ — $ — $ 99,461

Agency collateralized mortgage obligations $ — $ 35 $ — $ 35

30 unchanged sentences

These equity securities are included in other investments on the balance sheet.

• The Company had a $ 2.2 million equity interest in a specialized bank technology company as of December 31, 2024 and December 31, 2023 .

• The Company had a $ 350,000 equity interest in a technology company as of the years ended December 31, 2024 and December 31, 2023.

• The Company had a $ 47,000 and $ 50,000 equity interest in a technology company as of the years ended December 31, 2024, and December 31, 2023, respectively.

• a $ 1.8 million and $ 2.2 million equity interest in a specialized bank technology company as of December 31, 2025 and December 31, 2024, respectively;

• a $ 350,000 equity interest in a technology company as of the years ended December 31, 2025 and December 31, 2024;

• a $ 42,000 and $ 47,000 equity interest in a technology company as of the years ended December 31, 2025, and December 31, 2024, respectively.

For the Year Ended

4 unchanged sentences

Carrying value, end of period $ 2,171 $ 2,619 $ 2,622

Assets measured at fair value using significant unobservable inputs (Level 3)

The following table provides a description of the valuation technique, unobservable inputs, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis at the date indicated:

15 unchanged sentences

Other income (2)

1,286 692 323

Total noninterest income subject to Topic 606 34,335 24,673 18,100

4 unchanged sentences

Loan servicing fees 117 142 171

Sweep fee income 1,208 — —

Earnings on life insurance 515 486 185

5 unchanged sentences

wire transfer fees, annuity fees, mortgage broker fees and brokerage fees.

(3) See Note 23, Restatement of Prior Period Financial Statements.

A description of the Company’s revenue streams accounted for under Topic 606 is as follows:

Service Charges on Accounts:

The Company earns fees from deposit customers for transaction-based, account maintenance and overdraft services.

The Company earns fees from deposit customers for transaction-based fees, account maintenance and overdraft services.

Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed.

5 unchanged sentences

Interchange fees from cardholder transactions represent a percentage of the underlying transactions’ value and are recognized daily, concurrently with the transaction processing services provided by the cardholder.

Interchange income is included in Service Charges on Deposit Accounts in the consolidated statements of income.

Interchange income is included in Service Charges and Fees in the consolidated statements of income.

Merchant Service Fees:

7 unchanged sentences

The Company recognizes the loan referral fee for arranging the interest rate swap.

The Company earns fees and is reimbursed for certain expenses, as specified in the program agreement, for providing banking services to broker-dealers and digital financial service providers.

The Company earns fees and is reimbursed for certain expenses, as specified in the program agreement, for providing banking services to digital financial service providers.

Earned program fees and reimbursement of expenses are recorded gross and recognized on a monthly basis, as earned.

Credit enhancements for fraud and credit losses are not within the scope of Topic 606.

The following tables presents the BaaS fees that are within and not within the scope of Topic 606:

The following table presents the BaaS fees that are within and not within the scope of Topic 606:

December 31, 2025 compared to 2024 2024 compared to 2023

3 unchanged sentences

Servicing and other BaaS fees $ 5,795 $ 4,743 $ 3,855 $ 1,052 $ 888

Transaction 5,910 4,011 3,211 1,899 800

Interchange 6,933 4,252 2,583 2,681 1,669

Transaction and interchange fees 18,744 12,843 8,263 5,901 4,580

Reimbursement of expenses 4,952 2,489 1,122 2,463 1,367

5 unchanged sentences

Total BaaS fees $ 225,158 $ 302,748 $ 198,169 $ ( 77,590 ) $ 104,579

(1) See Note 23, Restatement of Prior Period Financial Statements.

Note 20 - Earnings Per Common Share

12 unchanged sentences

As defined in ASC 280, Segment Reporting, an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

We evaluate performance based on an internal performance measurement accounting system, which provides line of business results.

We evaluate performance based on classifications within accounting and reporting systems, which provides line of business results.

This system uses various techniques to assign balance sheet and income statement amounts to the business segments, including allocations of income and expense.

7 unchanged sentences

The CCBX segment provides BaaS that allows our broker-dealer and digital financial service partners to offer their customers banking services.

The CCBX segment has 24 relationships, at varying stages, including three signed letters of intent as of December 31, 2024.

We also have a loan production office which is located in King county.

The CCBX segment provides BaaS that allows digital financial service providers, companies and brands to offer their customers banking services.

The CCBX segment has 28 partners as of December 31, 2025.

The treasury & administration segment includes investments, debt and other reporting items that are not specific to the community bank or CCBX segments.

26 unchanged sentences

Total liabilities $ 1,957,800 $ 2,596,956 $ ( 304,278 ) $ 4,250,478 $ 1,896,846 $ 2,099,808 $ ( 314,150 ) $ 3,682,504

(1) See Note 23, Restatement of Prior Period Financial Statements.

Year Ended December 31, 2025 Year Ended December 31, 2024

6 unchanged sentences

Net interest income 82,363 211,172 16,530 310,065 75,573 184,472 12,983 273,028

Provision/(Recapture) for credit losses - loans ( 2,130 ) 277,793 — 275,663 1,322 182,721 — 184,043

Provision/(Recapture) for credit losses ( 504 ) 193,135 — 192,631 ( 1,373 ) 278,980 — 277,607

Provision for unfunded commitments — — — —

6 unchanged sentences

Noninterest income 4,097 226,428 1,083 231,608 4,442 302,871 892 308,205

4,442 302,871 892 308,205 4,975 198,646 501 204,122

NONINTEREST EXPENSE

10 unchanged sentences

Net Income $ 31,159 $ 30,308 $ ( 14,474 ) $ 46,993 $ 35,982 $ 25,092 $ ( 15,855 ) $ 45,219

(1) See Note 23, Restatement of Prior Period Financial Statements.

Year Ended December 31, 2023

6 unchanged sentences

Net interest income 79,225 144,731 $ 7,619 231,575

Provision/(Recapture) for credit losses - loans 719 78,345 $ — 79,064

Provision/(Recapture) for credit losses 1,111 182,881 $ — 183,992

Net interest income/(expense) after provision for credit losses - loans and unfunded commitments 78,114 ( 38,150 ) 7,619 47,583

5 unchanged sentences

Noninterest income 4,975 198,646 $ 501 204,122

5,168 117,541 $ 234 122,943

NONINTEREST EXPENSE

21 unchanged sentences

LIABILITIES AND SHAREHOLDERS' EQUITY

Junior subordinated debentures, net of issuances costs $ 3,591 $ 3,590

Junior subordinated debentures, net of issuance costs $ 3,593 $ 3,591

Subordinated debt, net of debt issuance costs 44,443 44,293

17 unchanged sentences

NONINTEREST INCOME

Unrealized gain (loss) on equity investment 27 279 ( 153 )

Unrealized (loss) gain on equity investment ( 414 ) 27 279

Other income 35 9 30

21 unchanged sentences

Investments in subsidiaries — ( 50,000 ) ( 14,945 )

Investments in loans receivable — — 350

Investments in other, net ( 555 ) ( 72 ) ( 123 )

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options 1,395 618 1,468

Proceeds from exercise of stock options, net of shares held to cover 104 1,395 618

Net cash for shares held to cover taxes on restricted stock vesting ( 3,528 ) — —

Proceeds from public offering, net 82 91,801 —

Proceeds from subordinated debt — — 19,625

Net cash provided by financing activities ( 3,342 ) 93,196 618

2 unchanged sentences

Cash, end of year $ 42,350 $ 47,739 $ 5,479

Note 23 – Restatement of Prior Period Financial Statements

Restatement Background

The Company has restated herein the impacted line items to the Consolidated Balance Sheet, Consolidated Income Statement, and Consolidated Statement of Cash flows as of and for the year ended December 31, 2023.

In addition, the Company has restated the impacted line items to its unaudited quarterly Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income and Cash Flows for the first three quarters of and each of the years ended December 31, 2024 and December 31, 2023.

Description of Misstatements

• BaaS partner loans

Certain interest income and BaaS loan expense amounts were misstated due to differences between BaaS lending partner accounting policies and the Company’s accounting policies.

The Company made an adjustment to decrease interest and fees on loans with a corresponding decrease to BaaS loan expense as well as the related Balance Sheet accounts impacted.

• Presentation of BaaS partner interchange fees on point of sale transaction

Reimbursement of expenses for interchange fees associated with certain BaaS partners had not been appropriately accounted for under Topic 606, where the Company acts as an agent.

The Company should have been recording these transactions on a net basis in Non-Interest Expense but reported the transaction gross in both Non-Interest Income and Non-Interest Expense.

As a result, the Company made an adjustment to reduce reimbursement of expenses included in Non-Interest Income with a corresponding decrease to point of sale expense in Non-Interest Expense.

Neither of these misstatements had any impact on consolidated pre-tax or net income.

Other Immaterial Adjustments

The restatement of the historical consolidated financial statements also includes the correction of its Consolidated Statement of Income for the year ended December 31, 2022 related to BaaS partner interchange fees.

The Company determined this correction did not, either individually or in the aggregate, result in a material misstatement of its previously issued consolidated financial statements for the year ended December 31, 2022.

Description of Restatement Tables

The following tables present the amounts previously reported and a reconciliation of the restatement amounts reported on the restated Consolidated Balance Sheets, the restated Consolidated Statements of Income and the restated Consolidated Statements of Cash Flows for the periods presented.

Further information regarding the misstatements and related restatements are summarized in the tables below.

Corrected Consolidated Balance Sheets As of

December 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated

Loans receivable $ 3,026,092 $ ( 4,550 ) $ 3,021,542

Allowance for credit losses ( 116,958 ) ( 423 ) ( 117,381 )

Total loans receivable, net 2,909,134 ( 4,973 ) 2,904,161

CCBX credit enhancement asset 107,921 4,973 112,894

Accrued interest receivable

26,819 ( 3,361 ) 23,458

Total assets 3,753,366 ( 3,361 ) 3,750,005

CCBX payable 33,651 ( 3,361 ) 30,290

Total liabilities 3,458,388 ( 3,361 ) 3,455,027

Total liabilities and shareholders' equity 3,753,366 ( 3,361 ) 3,750,005

Retained earnings 165,311 — 165,311

Corrected Consolidated Statements of Income Year Ended

December 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated

Interest and fees on loans $ 311,441 $ ( 7,152 ) $ 304,289

Total interest income 330,371 ( 7,152 ) 323,219

Net interest income 238,727 ( 7,152 ) 231,575

Net interest income/(expense) after provision for credit losses 54,735 ( 7,152 ) 47,583

Reimbursement of expenses 4,175 ( 3,053 ) 1,122

BaaS program income 16,293 ( 3,053 ) 13,240

Total noninterest income 207,175 ( 3,053 ) 204,122

Point of sale expense 3,534 ( 3,053 ) 481

Noninterest expense, excluding BaaS loan and BaaS fraud expense 110,712 ( 3,053 ) 107,659

BaaS loan expense

86,900 ( 7,152 ) 79,748

BaaS loan and fraud expense 94,065 ( 7,152 ) 86,913

Total noninterest expense 204,777 ( 10,205 ) 194,572

Net income 44,579 — 44,579

Corrected Consolidated Statement of Cash Flows Year Ended

December 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated

Net change in CCBX credit enhancement asset $ ( 50,079 ) $ ( 4,973 ) $ ( 55,052 )

Net change in CCBX payable 13,232 ( 3,361 ) 9,871

Net change in other assets and liabilities ( 15,919 ) 3,361 ( 12,558 )

Net cash provided by operating activities 196,513 ( 4,973 ) 191,540

Increase in loans receivable, net

( 1,052,283 ) 4,973 ( 1,047,310 )

Net cash used by investing activities ( 598,985 ) 4,973 ( 594,012 )

Corrected Consolidated Balance Sheets As of As of

September 30, 2024 June 30, 2024

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Loans receivable $ 3,418,832 $ ( 4,938 ) $ 3,413,894 $ 3,326,460 $ ( 4,647 ) $ 3,321,813

Allowance for credit losses ( 170,263 ) ( 1,411 ) ( 171,674 ) ( 147,914 ) ( 964 ) ( 148,878 )

Total loans receivable, net 3,248,569 ( 6,349 ) 3,242,220 3,178,546 ( 5,611 ) 3,172,935

CCBX credit enhancement asset 167,251 6,349 173,600 143,485 5,611 149,096

Accrued interest receivable

23,664 ( 1,349 ) 22,315 23,617 ( 1,997 ) 21,620

Total assets 4,065,821 ( 1,349 ) 4,064,472 3,961,546 ( 1,997 ) 3,959,549

CCBX payable 39,188 ( 1,349 ) 37,839 34,536 ( 1,997 ) 32,539

Total liabilities 3,733,891 ( 1,349 ) 3,732,542 3,644,853 ( 1,997 ) 3,642,856

Total liabilities and shareholders' equity 4,065,821 ( 1,349 ) 4,064,472 3,961,546 ( 1,997 ) 3,959,549

Retained earnings 197,162 — 197,162 183,706 — 183,706

Corrected Consolidated Balance Sheets As of As of

March 31, 2024 September 30, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Loans receivable $ 3,199,554 $ ( 4,453 ) $ 3,195,101 $ 2,967,035 $ ( 3,289 ) $ 2,963,746

Allowance for credit losses ( 139,258 ) ( 683 ) ( 139,941 ) ( 101,085 ) ( 110 ) ( 101,195 )

Total loans receivable, net 3,060,296 ( 5,136 ) 3,055,160 2,865,950 ( 3,399 ) 2,862,551

CCBX credit enhancement asset 137,276 5,136 142,412 91,867 3,399 95,266

Accrued interest receivable

24,681 ( 2,196 ) 22,485 23,428 ( 1,443 ) 21,985

Total assets 3,865,258 ( 2,196 ) 3,863,062 3,678,265 ( 1,443 ) 3,676,822

CCBX payable 33,095 ( 2,196 ) 30,899 38,229 ( 1,443 ) 36,786

Total liabilities 3,561,549 ( 2,196 ) 3,559,353 3,393,815 ( 1,443 ) 3,392,372

Total liabilities and shareholders' equity 3,865,258 ( 2,196 ) 3,863,062 3,678,265 ( 1,443 ) 3,676,822

Retained earnings 172,110 — 172,110 156,299 — 156,299

Corrected Consolidated Balance Sheets As of As of

June 30, 2023 March 31, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Loans receivable $ 3,007,553 $ ( 1,950 ) $ 3,005,603 $ 2,837,204 $ ( 770 ) $ 2,836,434

Allowance for credit losses ( 110,762 ) ( 51 ) ( 110,813 ) ( 89,123 ) — ( 89,123 )

Total loans receivable, net 2,896,791 ( 2,001 ) 2,894,790 2,748,081 ( 770 ) 2,747,311

CCBX credit enhancement asset 96,928 2,001 98,929 76,395 770 77,165

Accrued interest receivable

21,581 ( 783 ) 20,798 19,321 ( 319 ) 19,002

Total assets 3,535,283 ( 783 ) 3,534,500 3,451,033 ( 319 ) 3,450,714

CCBX payable 27,714 ( 783 ) 26,931 30,794 ( 319 ) 30,475

Total liabilities 3,262,621 ( 783 ) 3,261,838 3,192,270 ( 319 ) 3,191,951

Total liabilities and shareholders' equity 3,535,283 ( 783 ) 3,534,500 3,451,033 ( 319 ) 3,450,714

Retained earnings 146,029 — 146,029 133,123 — 133,123

Corrected Consolidated Statements of Income Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2024

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest and fees on loans $ 99,590 $ 86 $ 99,676 $ 275,155 $ 1,291 $ 276,446

Total interest income 105,079 86 105,165 293,038 1,291 294,329

Net interest income 72,187 86 72,273 199,360 1,291 200,651

Net interest income/(expense) after

provision for credit losses 1,930 86 2,016 ( 16,380 ) 1,291 ( 15,089 )

Reimbursement of expenses 1,843 ( 1,278 ) 565 4,514 ( 2,837 ) 1,677

BaaS program income 6,436 ( 1,278 ) 5,158 17,357 ( 2,837 ) 14,520

Total noninterest income 80,068 ( 1,278 ) 78,790 236,941 ( 2,837 ) 234,104

Point of sale expense 1,351 ( 1,278 ) 73 3,072 ( 2,837 ) 235

Noninterest expense, excluding

BaaS loan and BaaS fraud expense 30,920 ( 1,278 ) 29,642 89,127 ( 2,837 ) 86,290

BaaS loan expense

32,612 86 32,698 86,525 1,291 87,816

BaaS loan and fraud expense 34,696 86 34,782 91,316 1,291 92,607

Total noninterest expense 65,616 ( 1,192 ) 64,424 180,443 ( 1,546 ) 178,897

Net income 13,456 — 13,456 31,852 — 31,852

Corrected Consolidated Statements of Income Three Months Ended Six Months Ended

June 30, 2024 June 30, 2024

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest and fees on loans $ 90,944 $ ( 65 ) $ 90,879 $ 175,565 $ 1,205 $ 176,770

Total interest income 97,487 ( 65 ) 97,422 187,959 1,205 189,164

Net interest income 66,237 ( 65 ) 66,172 127,173 1,205 128,378

Net interest income/(expense) after

provision for credit losses 3,912 ( 65 ) 3,847 ( 18,310 ) 1,205 ( 17,105 )

Reimbursement of expenses 1,637 ( 780 ) 857 2,670 ( 1,559 ) 1,111

BaaS program income 6,096 ( 780 ) 5,316 10,921 ( 1,559 ) 9,362

Total noninterest income 69,918 ( 780 ) 69,138 156,873 ( 1,559 ) 155,314

Point of sale expense 852 ( 780 ) 72 1,721 ( 1,559 ) 162

Noninterest expense, excluding

BaaS loan and BaaS fraud expense 27,949 ( 780 ) 27,169 58,207 ( 1,559 ) 56,648

BaaS loan expense

29,076 ( 65 ) 29,011 53,913 1,205 55,118

BaaS loan and fraud expense 30,860 ( 65 ) 30,795 56,620 1,205 57,825

Total noninterest expense 58,809 ( 845 ) 57,964 114,827 ( 354 ) 114,473

Net income 11,596 — 11,596 18,396 — 18,396

Corrected Consolidated Statements of Income Three Months Ended

March 31, 2024

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated

Interest and fees on loans $ 84,621 $ 1,270 $ 85,891

Total interest income 90,472 1,270 91,742

Net interest income 60,936 1,270 62,206

Net interest income/(expense) after provision for credit losses ( 22,222 ) 1,270 ( 20,952 )

Reimbursement of expenses 1,033 ( 779 ) 254

BaaS program income 4,825 ( 779 ) 4,046

Total noninterest income 86,955 ( 779 ) 86,176

Point of sale expense 869 ( 779 ) 90

Noninterest expense, excluding BaaS loan and BaaS fraud expense 30,258 ( 779 ) 29,479

BaaS loan expense

24,837 1,270 26,107

BaaS loan and fraud expense 25,760 1,270 27,030

Total noninterest expense 56,018 491 56,509

Net income 6,800 — 6,800

Corrected Consolidated Statements of Income Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest and fees on loans $ 83,652 $ ( 1,704 ) $ 81,948 $ 230,282 $ ( 3,968 ) $ 226,314

Total interest income 88,331 ( 1,704 ) 86,627 242,128 ( 3,968 ) 238,160

Net interest income 62,229 ( 1,704 ) 60,525 179,070 ( 3,968 ) 175,102

Net interest income/(expense) after

provision for credit losses 34,976 ( 1,704 ) 33,272 55,867 ( 3,968 ) 51,899

Reimbursement of expenses 1,152 ( 888 ) 264 3,099 ( 2,244 ) 855

BaaS program income 4,401 ( 888 ) 3,513 11,924 ( 2,244 ) 9,680

Total noninterest income 34,579 ( 888 ) 33,691 142,481 ( 2,244 ) 140,237

Point of sale expense 1,068 ( 888 ) 180 2,635 ( 2,244 ) 391

Noninterest expense, excluding

BaaS loan and BaaS fraud expense 30,648 ( 888 ) 29,760 84,098 ( 2,244 ) 81,854

BaaS loan expense

23,003 ( 1,704 ) 21,299 62,590 ( 3,968 ) 58,622

BaaS loan and fraud expense 25,853 ( 1,704 ) 24,149 68,976 ( 3,968 ) 65,008

Total noninterest expense 56,501 ( 2,592 ) 53,909 153,074 ( 6,212 ) 146,862

Net income 10,270 — 10,270 35,567 — 35,567

Corrected Consolidated Statements of Income Three Months Ended Six Months Ended

June 30, 2023 June 30, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest and fees on loans $ 80,199 $ ( 1,375 ) $ 78,824 $ 146,630 $ ( 2,264 ) $ 144,366

Total interest income 83,686 ( 1,375 ) 82,311 153,797 ( 2,264 ) 151,533

Net interest income 62,350 ( 1,375 ) 60,975 116,841 ( 2,264 ) 114,577

Net interest income/(expense) after

provision for credit losses 10,097 ( 1,375 ) 8,722 20,891 ( 2,264 ) 18,627

Reimbursement of expenses 1,026 ( 703 ) 323 1,947 ( 1,356 ) 591

BaaS program income 3,948 ( 703 ) 3,245 7,523 ( 1,356 ) 6,167

Total noninterest income 58,595 ( 703 ) 57,892 107,902 ( 1,356 ) 106,546

Point of sale expense 814 ( 703 ) 111 1,567 ( 1,356 ) 211

Noninterest expense, excluding

BaaS loan and BaaS fraud expense 28,340 ( 703 ) 27,637 53,450 ( 1,356 ) 52,094

BaaS loan expense 22,033 ( 1,375 ) 20,658 39,587 ( 2,264 ) 37,323

BaaS loan and fraud expense 23,570 ( 1,375 ) 22,195 43,123 ( 2,264 ) 40,859

Total noninterest expense 51,910 ( 2,078 ) 49,832 96,573 ( 3,620 ) 92,953

Net income 12,906 — 12,906 25,297 — 25,297

Corrected Consolidated Statements of Income Three Months Ended

March 31, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated

Interest and fees on loans $ 66,431 $ ( 889 ) $ 65,542

Total interest income 70,111 ( 889 ) 69,222

Net interest income 54,491 ( 889 ) 53,602

Net interest income/(expense) after provision for credit losses 10,794 ( 889 ) 9,905

Reimbursement of expenses 921 ( 653 ) 268

BaaS program income 3,575 ( 653 ) 2,922

Total noninterest income 49,307 ( 653 ) 48,654

Point of sale expense 753 ( 653 ) 100

Noninterest expense, excluding BaaS loan and BaaS fraud expense 25,110 ( 653 ) 24,457

BaaS loan expense

17,554 ( 889 ) 16,665

BaaS loan and fraud expense 19,553 ( 889 ) 18,664

Total noninterest expense 44,663 ( 1,542 ) 43,121

Net income 12,391 — 12,391

Corrected Consolidated Statement of Cash Flows Nine Months Ended Six Months Ended

September 30, 2024 June 30, 2024

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net change in CCBX credit enhancement asset $ ( 59,330 ) $ ( 6,349 ) $ ( 65,679 ) $ ( 35,564 ) $ ( 5,611 ) $ ( 41,175 )

Net change in CCBX payable 5,537 ( 1,349 ) 4,188 885 ( 1,997 ) ( 1,112 )

Net change in other assets and liabilities 4,248 1,349 5,597 2,194 1,997 4,191

Net cash provided by operating activities 197,813 ( 6,349 ) 191,464 134,451 ( 5,611 ) 128,840

Increase in loans receivable, net

( 1,218,640 ) 6,349 ( 1,212,291 ) ( 645,787 ) 5,611 ( 640,176 )

Net cash used by investing activities ( 465,112 ) 6,349 ( 458,763 ) 313,976 5,611 319,587

Corrected Consolidated Statement of Cash Flows Three Months Ended Nine Months Ended

March 31, 2024 September 30, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net change in CCBX credit enhancement asset $ ( 29,355 ) $ ( 5,136 ) $ ( 34,491 ) $ ( 34,025 ) $ ( 3,399 ) $ ( 37,424 )

Net change in CCBX payable ( 556 ) ( 2,196 ) ( 2,752 ) 17,810 ( 1,443 ) 16,367

Net change in other assets and liabilities ( 312 ) 2,196 1,884 ( 13,299 ) 1,443 ( 11,856 )

Net cash provided by operating activities 61,900 ( 5,136 ) 56,764 146,236 ( 3,399 ) 142,837

Increase in loans receivable, net

( 311,264 ) 5,136 ( 306,128 ) ( 823,221 ) 3,399 ( 819,822 )

Net cash used by investing activities ( 132,801 ) 5,136 ( 127,665 ) ( 486,209 ) 3,399 ( 482,810 )

Corrected Consolidated Statement of Cash Flows Six Months Ended Three Months Ended

June 30, 2023 March 31, 2023

(dollars in thousands;

unaudited) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net change in CCBX credit enhancement asset $ ( 39,086 ) $ ( 2,001 ) $ ( 41,087 ) $ ( 18,553 ) $ ( 770 ) $ ( 19,323 )

Net change in CCBX payable 7,295 ( 783 ) 6,512 10,375 ( 319 ) 10,056

Net change in other assets and liabilities 5,562 783 6,345 3,177 319 3,496

Net cash provided by operating activities 81,115 ( 2,001 ) 79,114 46,631 ( 770 ) 45,861

Increase in loans receivable, net

( 585,510 ) 2,001 ( 583,509 ) ( 295,583 ) 770 ( 294,813 )

Net cash used by investing activities ( 493,834 ) 2,001 ( 491,833 ) ( 273,123 ) 770 ( 272,353 )

Note 23 – Intangible Assets

During the year ended December 31, 2025, the Company completed a small asset acquisition that included the purchase of certain identifiable intangible assets.

The transaction was accounted for as an asset acquisition.

The acquired intangible asset is finite-lived and is being amortized over its estimated useful life.

The carrying amount of the intangible asset was $ 4.5 million at December 31, 2025.

The acquisition did not have a material impact on the Company’s consolidated financial statements.

The Company’s intangibles are evaluated if events and circumstances lead management to believe their value may not be recoverable.

The Company is unaware of any events and/or circumstances that would indicate the value of intangible assets are impaired as of December 31, 2025.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data