What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 180 added, 109 removed, 728 unchanged (28% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts) March 31, 2025 December 31, 2024

(in thousands, except share amounts) June 30, 2025 December 31, 2024

Cash and due from financial institutions $ 53,724 $ 33,882

2 unchanged sentences

Time deposits in banks 849 4,121

Securities available-for-sale, at fair value, net of allowance for credit losses of $ 0 at March 31, 2025 and December 31, 2024 (amortized cost of $ 113,642 and $ 115,757 at March 31, 2025 and December 31, 2024, respectively)

Securities available-for-sale, at fair value, net of allowance for credit losses of $ 0 at June 30, 2025 and December 31, 2024 (amortized cost of $ 111,332 and $ 115,757 at June 30, 2025 and December 31, 2024, respectively)

94,990 98,194

Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $ 20 at March 31, 2025 and December 31, 2024 (fair value of $ 2,275 and $ 2,353 at March 31, 2025 and December 31, 2024, respectively)

Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $ 20 at June 30, 2025 and December 31, 2024 (fair value of $ 2,270 and $ 2,353 at June 30, 2025 and December 31, 2024, respectively)

Loans held for sale 309 3,247

22 unchanged sentences

10,000,000 shares authorized;

zero issued and outstanding at March 31, 2025 and December 31, 2024

zero issued and outstanding at June 30, 2025 and December 31, 2024

Common stock, no par value;

100,000,000 shares authorized;

21,329,235 shares issued and outstanding at March 31, 2025;

21,360,991 shares issued and outstanding at June 30, 2025;

21,319,083 shares issued and outstanding at December 31, 2024

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share amounts) 2025 2024 2025 2024

4 unchanged sentences

Interest-bearing deposits in banks

3,987 1,986 7,562 5,088

Total interest and fee income 60,580 48,998 117,667 96,539

15 unchanged sentences

Earnings on BOLI 220 158 381 300

Other 482 78 561 451

Total non-interest income 1,810 1,573 3,169 3,406

13 unchanged sentences

5,591 4,370 10,871 8,700

$ 14,508 $ 10,782 $ 27,619 $ 21,413

Basic earnings per common share $ 0.68 $ 0.51 $ 1.30 $ 1.12

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

190 295 1,220 ( 660 )

Income tax expense (benefit) related to items of other comprehensive income (loss)

Other comprehensive income (loss)

Income tax expense (benefit) related to items of other comprehensive (loss) income

502 87 807 ( 195 )

Other comprehensive (loss) income

( 312 ) 208 413 ( 465 )

Total comprehensive income

3 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three Months Ended March 31, 2025 and 2024

For the Three Months Ended June 30, 2025 and 2024

Common Stock Retained Earnings

2 unchanged sentences

(in thousands, except per share amounts) Shares Amount

Balance at March 31, 2024 17,353,251 $ 220,804 $ 84,216 $ ( 12,440 ) $ 292,580

Net income — — 10,782 — 10,782

Other comprehensive income — — — 208 208

Common stock issued 3,967,500 80,870 — — 80,870

Stock compensation expense — 294 — — 294

Stock forfeitures ( 1,168 ) — — — —

Cash dividends paid ($ 0.20 per share)

— — ( 4,264 ) — ( 4,264 )

Balance at June 30, 2024 21,319,583 $ 301,968 $ 90,734 $ ( 12,232 ) $ 380,470

Balance at March 31, 2025 21,329,235 $ 302,788 $ 115,309 $ ( 11,646 ) $ 406,451

Net income — — 14,508 — 14,508

Other comprehensive loss — — — ( 312 ) ( 312 )

Stock issued under stock award plans 31,756 — — — —

Stock compensation expense — 367 — — 367

Cash dividends paid ($ 0.20 per share)

— — ( 4,272 ) — ( 4,272 )

Balance at June 30, 2025 21,360,991 $ 303,155 $ 125,545 $ ( 11,958 ) $ 416,742

See accompanying notes to the unaudited consolidated financial statements.

FIVE STAR BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Six Months Ended June 30, 2025 and 2024

Common Stock Retained Earnings

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

(in thousands, except per share amounts) Shares Amount

Balance at December 31, 2023 17,256,989 $ 220,505 $ 77,036 $ ( 11,767 ) $ 285,774

1 unchanged sentence

Other comprehensive loss — — — ( 465 ) ( 465 )

Common stock issued 3,967,500 80,870 — — 80,870

Stock issued under stock award plans 96,380 — — — —

3 unchanged sentences

— — ( 7,715 ) — ( 7,715 )

Balance at March 31, 2024 17,353,251 $ 220,804 $ 84,216 $ ( 12,440 ) $ 292,580

Balance at June 30, 2024 21,319,583 $ 301,968 $ 90,734 $ ( 12,232 ) $ 380,470

Balance at December 31, 2024 21,319,083 $ 302,531 $ 106,464 $ ( 12,371 ) $ 396,624

6 unchanged sentences

— — ( 8,538 ) — ( 8,538 )

Balance at March 31, 2025 21,329,235 $ 302,788 $ 115,309 $ ( 11,646 ) $ 406,451

See accompanying notes to the unaudited consolidated financial statements.

Balance at June 30, 2025 21,360,991 $ 303,155 $ 125,545 $ ( 11,958 ) $ 416,742

See accompanying notes to unaudited consolidated financial statements.

FIVE STAR BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

14 unchanged sentences

Gross proceeds from sale of loans 3,531 12,909

Gain on partial sale of equity investment — 300

Gain on equity investment ( 399 ) ( 300 )

Net changes in:

7 unchanged sentences

Proceeds received from equity investment — 300

Low income housing tax credits ( 5,381 ) ( 1,160 )

Net change in time deposits in banks 3,272 1,761

2 unchanged sentences

Purchase of BOLI ( 3,710 ) ( 1,550 )

Other real estate sale proceeds 87 —

Net cash used in investing activities ( 229,885 ) ( 173,378 )

1 unchanged sentence

Net change in deposits 336,628 122,735

Proceeds from issuance of stock, net of issuance costs — 80,870

Advances (payments) on other borrowings — ( 170,000 )

Cash dividends paid ( 8,538 ) ( 7,715 )

Net cash provided by (used in) financing activities 174,094 ( 124,575 )

Net cash provided by financing activities 328,090 25,890

Net change in cash and cash equivalents 131,467 ( 131,217 )

9 unchanged sentences

ROUA acquired ( 1,433 ) ( 1,958 )

Net change in commitment for low income housing tax credits ( 10,000 ) —

See accompanying notes to the unaudited consolidated financial statements.

11 unchanged sentences

These interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the interim periods presented.

These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2024, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”), which was filed with the SEC on February 28, 2025.

These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2024, and the notes thereto, included in the Company’s Annual Report on Form 10-K (the “2024 Annual Report on Form 10-K”), which was filed with the SEC on February 28, 2025.

The unaudited consolidated financial statements include Bancorp and its wholly owned subsidiary, the Bank.

All significant intercompany transactions and balances are eliminated in consolidation.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2025.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2025.

The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry.

65 unchanged sentences

Changes in Fair Value Recorded In

March 31, 2025

June 30, 2025

Securities available-for-sale:

10 unchanged sentences

In addition, values use discounted cash flow models and may include significant management judgment and estimation.

As of March 31, 2025 and December 31, 2024, there were no Level 1 available-for-sale securities and no transfers between Level 1 and Level 2 classifications for assets or liabilities measured at fair value on a recurring basis.

On a recurring basis, derivative financial instruments are recorded at fair value, which is based on the income approach using observable Level 2 market inputs, reflecting market expectations of future interest rates as of the measurement date.

Standard valuation techniques are used to calculate the present value of the future expected cash flows assuming an orderly transaction.

Valuation adjustments may be made to reflect both the Company’s credit risk and the counterparties’ credit risk in determining the fair value of the derivatives.

A similar credit risk adjustment, correlated to the credit standing of the counterparty, is made when collateral posted by the counterparty does not fully cover their liability to the Company.

There was no carrying value or fair value for interest rate swaps as of March 31, 2025 and December 31, 2024.

As of June 30, 2025 and December 31, 2024, there were no Level 1 available-for-sale securities and no transfers between Level 1 and Level 2 classifications for assets or liabilities measured at fair value on a recurring basis.

Certain financial assets may be measured at fair value on a non-recurring basis.

These assets are subject to fair value adjustments that result from the application of the lower of cost or fair value accounting or write-downs of individual assets, such as collateral dependent loans and other real estate owned.

As of March 31, 2025 and December 31, 2024, the carrying amount of assets measured at fair value on a non-recurring basis was immaterial to the Company.

As of June 30, 2025 and December 31, 2024, the carrying amount of assets measured at fair value on a non-recurring basis was immaterial to the Company.

Disclosures about Fair Value of Financial Instruments

Table 2.2 is a summary of fair value estimates for financial instruments as of March 31, 2025 and December 31, 2024.

Table 2.2 is a summary of fair value estimates for financial instruments as of June 30, 2025 and December 31, 2024.

The carrying amounts in Table 2.2 are recorded in the consolidated balance sheets under the indicated captions.

1 unchanged sentence

Fair Value Estimates for Financial Instruments

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands) Carrying Amounts Fair Value Fair Value Hierarchy Carrying Amounts Fair Value Fair Value Hierarchy

10 unchanged sentences

Subordinated notes 73,968 73,533 Level 3 73,895 73,371 Level 3

The Company used the following methods and assumptions to estimate the fair value of its financial instruments at March 31, 2025 and December 31, 2024:

The Company used the following methods and assumptions to estimate the fair value of its financial instruments at June 30, 2025 and December 31, 2024:

Cash and cash equivalents and time deposits in banks :

25 unchanged sentences

The Company also invests in residential and commercial mortgage-backed securities, collateralized mortgage obligations issued or guaranteed by GSEs, and corporate bonds, as reflected in Tables 3.1 and 3.2.

A summary of the amortized cost and fair value related to securities held-to-maturity as of March 31, 2025 and December 31, 2024 is presented in Table 3.1.

Securities held-to-maturity, at amortized cost, had a $ 20.0 thousand allowance for credit losses as of March 31, 2025 and December 31, 2024.

A summary of the amortized cost and fair value related to securities held-to-maturity as of June 30, 2025 and December 31, 2024 is presented in Table 3.1.

Securities held-to-maturity, at amortized cost, had a $ 20.0 thousand allowance for credit losses as of June 30, 2025 and December 31, 2024.

Securities Held-to-Maturity

1 unchanged sentence

Gains (Losses)

March 31, 2025

June 30, 2025

Obligations of states and political subdivisions $ 2,585 $ — $ ( 315 ) $ 2,270

9 unchanged sentences

and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the issuers.

As of March 31, 2025 and December 31, 2024, the allowance for credit losses on held-to-maturity securities, at amortized cost, was $ 20.0 thousand.

The Company did not record an allowance for credit losses on available-for-sale securities as of March 31, 2025 or December 31, 2024.

A summary of the amortized cost and fair value related to securities available-for-sale as of March 31, 2025 and December 31, 2024 is presented in Table 3.2.

Securities available-for-sale did not have an allowance for credit losses as of March 31, 2025 or December 31, 2024.

As of June 30, 2025 and December 31, 2024, the allowance for credit losses on held-to-maturity securities, at amortized cost, was $ 20.0 thousand.

The Company did not record an allowance for credit losses on available-for-sale securities as of June 30, 2025 or December 31, 2024.

A summary of the amortized cost and fair value related to securities available-for-sale as of June 30, 2025 and December 31, 2024 is presented in Table 3.2.

Securities available-for-sale did not have an allowance for credit losses as of June 30, 2025 or December 31, 2024.

Securities Available-for-Sale

1 unchanged sentence

Gains (Losses)

March 31, 2025

June 30, 2025

government agency securities $ 6,909 $ 154 $ ( 61 ) $ 7,002

11 unchanged sentences

Total available-for-sale $ 115,757 $ 159 $ ( 17,722 ) $ 98,194

The amortized cost and fair value of investment securities by contractual maturity at March 31, 2025 and December 31, 2024 are shown in Table 3.3.

The amortized cost and fair value of investment securities by contractual maturity at June 30, 2025 and December 31, 2024 are shown in Table 3.3.

Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.

Contractual Maturities - Investment Securities

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Held-to-Maturity Available-for-Sale Held-to-Maturity Available-for-Sale

10 unchanged sentences

Total $ 2,585 $ 2,270 $ 111,332 $ 94,990 $ 2,720 $ 2,353 $ 115,757 $ 98,194

There were no purchases or sales of investment securities during the three months ended March 31, 2025 and March 31, 2024.

There were no purchases or sales of investment securities during the three and six months ended June 30, 2025 and June 30, 2024.

Pledged Investment Securities

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

The State of California, securing deposits of public funds and borrowings $ 48,127 $ 49,477

1 unchanged sentence

Total pledged investment securities $ 91,057 $ 95,053

Table 3.5 details the gross unrealized losses and fair values aggregated by investment category and length of time that individual available-for-sale securities have been in a continuous unrealized loss position at March 31, 2025 and December 31, 2024.

Securities Available-for-Sale in Continuous Unrealized Loss Positions

1 unchanged sentence

Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

March 31, 2025

June 30, 2025

government agency securities $ 935 $ ( 8 ) $ 1,918 $ ( 53 ) $ 2,853 $ ( 61 )

13 unchanged sentences

$ 2,316 $ ( 11 ) $ 91,330 $ ( 17,711 ) $ 93,646 $ ( 17,722 )

There were 147 available-for-sale securities in unrealized loss positions at both March 31, 2025 and December 31, 2024.

As of March 31, 2025, the investment portfolio included 141 investment securities that had been in a continuous loss position for twelve months or more and six investment securities that had been in a loss position for less than twelve months.

There was one held-to-maturity security in a continuous unrealized loss position at both March 31, 2025 and December 31, 2024, which at December 31, 2024 had been in a continuous loss position for more than twelve months.

There were 144 and 147 available-for-sale securities in unrealized loss positions at June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025, the investment portfolio included 139 investment securities that had been in a continuous loss position for twelve months or more and five investment securities that had been in a loss position for less than twelve months.

There was one held-to-maturity security in a continuous unrealized loss position at both June 30, 2025 and December 31, 2024, which at December 31, 2024 had been in a continuous loss position for more than twelve months.

Obligations issued or guaranteed by government agencies such as the GNMA and the SBA or GSEs under conservatorship such as the FNMA and the FHLMC, are guaranteed or sponsored by agencies of the U.S.

7 unchanged sentences

Shares cannot be purchased or sold except between the FHLB and its members at the $ 100 per share par value.

The Company held $ 15.0 million of FHLB stock at both March 31, 2025 and December 31, 2024.

The Company held $ 15.0 million of FHLB stock at both June 30, 2025 and December 31, 2024.

The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value.

Based on management’s analysis of the FHLB’s financial condition and certain qualitative factors, management determined that the FHLB stock was not impaired at March 31, 2025 or December 31, 2024.

Based on management’s analysis of the FHLB’s financial condition and certain qualitative factors, management determined that the FHLB stock was not impaired at June 30, 2025 or December 31, 2024.

Equity investments :

The Company is a limited partner in certain venture-backed capital funds.

The Company held $ 14.5 million and $ 10.8 million of equity investments at June 30, 2025 and December 31, 2024, respectively.

The carrying amounts of these investments are reasonable estimates of fair value because the investments reflect the Company's share of earnings and losses of each fund.

Loans and Allowance for Credit Losses

3 unchanged sentences

Loans Outstanding

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Commercial $ 3,066,627 $ 2,857,173

80 unchanged sentences

Loans by Risk Category and Vintage

Amortized Cost Basis by Origination Year as of March 31, 2025

Amortized Cost Basis by Origination Year as of June 30, 2025

(in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Converted to Term Total

69 unchanged sentences

Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals generally ranging from monthly to annually depending on credit size, risk, and complexity.

All commercial borrowers with loans exceeding a certain dollar threshold are usually required to submit financials annually for review;

this includes business financial statements, rent rolls, property income statements, and tax returns.

All commercial borrowers with loans exceeding a certain dollar threshold are usually required to submit financials annually for review, which includes business financial statements, rent rolls, property income statements, and tax returns.

Management monitors construction loans monthly and reviews consumer loans based on delinquency.

4 unchanged sentences

30-59 Days 60-89 Days Greater Than 90 Days Total Past Due Current Total Loans Receivable

March 31, 2025

June 30, 2025

Commercial $ — $ — $ — $ — $ 3,063,694 $ 3,063,694

19 unchanged sentences

Total $ 1,174 $ — $ — $ 1,174 $ 3,531,512 $ 3,532,686

There were no loans greater than 90 days past due and still accruing interest income as of March 31, 2025 or December 31, 2024.

No collateral dependent loans were in process of foreclosure at March 31, 2025 or December 31, 2024.

The Company had one collateral dependent commercial real estate loan outstanding as of March 31, 2025 and December 31, 2024 in the amounts of $ 1.7 million and $ 1.8 million, respectively, for which the borrower was experiencing financial difficulty.

Non-accrual loans, segregated by class, as of March 31, 2025 and December 31, 2024 are shown in Table 4.4.

There were no loans greater than 90 days past due and still accruing interest income as of June 30, 2025 or December 31, 2024.

One collateral dependent loan was in process of foreclosure at June 30, 2025:

a commercial real estate loan in the amount of $ 0.8 million rated substandard.

No collateral dependent loans were in process of foreclosure at December 31, 2024.

The Company had one collateral dependent commercial real estate loan outstanding as of June 30, 2025 and December 31, 2024 in the amount of $ 1.7 million and $ 1.8 million, respectively, for which the applicable borrower was experiencing financial difficulty.

Non-accrual loans, segregated by class, as of June 30, 2025 and December 31, 2024 are shown in Table 4.4.

Non-accrual Loans

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Commercial $ 2,240 $ 1,750

1 unchanged sentence

Total non-accrual loans $ 2,278 $ 1,798

No interest income was recognized on non-accrual loans in the three months ended March 31, 2025 or March 31, 2024.

Non-accrual real estate loans did not have an allowance for credit losses as of March 31, 2025.

No interest income was recognized on non-accrual loans in the three and six months ended June 30, 2025 or June 30, 2024.

Non-accrual real estate loans did not have an allowance for credit losses as of June 30, 2025.

Interest income can be recognized on non-accrual loans in cases where resolution occurs through a sale or full payment is received on the non-accrual loan.

The amount of foregone interest income related to non-accrual loans was $ 35.2 thousand for the three months ended March 31, 2025, as compared to $ 39.2 thousand for the three months ended March 31, 2024.

The amount of foregone interest income related to non-accrual loans was $ 35.6 thousand and $ 70.9 thousand for the three and six months ended June 30, 2025, respectively, as compared to $ 38.2 thousand and $ 77.4 thousand for the three and six months ended June 30, 2024, respectively.

Allowance for Credit Losses

2 unchanged sentences

(in thousands) Beginning Balance Charge-offs Recoveries Provision (Benefit) Ending Balance

Three months ended March 31, 2025

Three months ended June 30, 2025

Commercial $ 27,027 $ — $ — $ 765 $ 27,792

8 unchanged sentences

Total $ 39,224 $ ( 1,638 ) $ 181 $ 2,400 $ 40,167

Three months ended March 31, 2024

Allowance for Credit Losses (continued)

(in thousands) Beginning Balance Charge-offs Recoveries Provision (Benefit) Ending Balance

Three months ended June 30, 2024

Commercial $ 28,895 $ — $ — $ ( 4,187 ) $ 24,708

8 unchanged sentences

Total $ 34,653 $ ( 1,347 ) $ 150 $ 1,950 $ 35,406

Six months ended June 30, 2025

Commercial $ 25,864 $ — $ — $ 1,928 $ 27,792

Commercial land and development 78 — — ( 45 ) 33

Commercial construction 2,268 — — 307 2,575

Residential construction 64 — — 11 75

Residential 270 — — 64 334

Farmland 607 — — 116 723

Secured 5,866 ( 2,261 ) 160 1,858 5,623

Unsecured 278 ( 50 ) — 189 417

Consumer and other 2,496 ( 143 ) 120 122 2,595

Total $ 37,791 $ ( 2,454 ) $ 280 $ 4,550 $ 40,167

Six months ended June 30, 2024

Commercial $ 29,015 $ — $ — $ ( 4,307 ) $ 24,708

Commercial land and development 178 — — ( 106 ) 72

Commercial construction 718 — — 379 1,097

Residential construction 89 — — 11 100

Residential 151 — — 44 195

Farmland 399 — — 3 402

Secured 3,314 ( 2,237 ) 239 6,070 7,386

Unsecured 189 ( 70 ) — 95 214

Consumer and other 378 ( 143 ) 186 811 1,232

Total $ 34,431 $ ( 2,450 ) $ 425 $ 3,000 $ 35,406

Unfunded Loan Commitment Reserves

2 unchanged sentences

Unfunded Loan Commitment Reserves

Three months ended

(in thousands) March 31, 2025 March 31, 2024

Three months ended Six months ended

(in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Balance at beginning of period $ 497 $ 1,097 $ 747 $ 1,247

3 unchanged sentences

Pledged Loans

The Company’s FHLB line of credit is secured under terms of a collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $ 1.9 billion at March 31, 2025 and December 31, 2024.

In addition, the Company pledges eligible tenants in common loans, which totaled $ 1.2 billion at March 31, 2025 and December 31, 2024, to secure its borrowing capacity with the Federal Reserve Discount Window.

The Company’s FHLB line of credit is secured under terms of a collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $ 1.9 billion at June 30, 2025 and December 31, 2024.

In addition, the Company pledges eligible tenants in common loans, which totaled $ 1.3 billion and $ 1.2 billion at June 30, 2025 and December 31, 2024, to secure its borrowing capacity with the Federal Reserve Discount Window.

See Note 6, Subordinated Notes and Other Borrowings, for further discussion of these borrowings.

Interest-Bearing Deposits

Table 5.1 shows the composition of interest-bearing deposits as of March 31, 2025 and December 31, 2024.

Table 5.1 shows the composition of interest-bearing deposits as of June 30, 2025 and December 31, 2024.

Interest-Bearing Deposits

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Interest-bearing transaction accounts $ 292,257 $ 315,217

5 unchanged sentences

Total interest-bearing deposits $ 2,890,561 $ 2,635,365

Time deposits totaled $ 801.4 million and $ 670.2 million as of March 31, 2025 and December 31, 2024, respectively.

Scheduled maturities of time deposits as of March 31, 2025 for the next five years are shown in Table 5.2.

Time deposits totaled $ 772.1 million and $ 670.2 million as of June 30, 2025 and December 31, 2024, respectively.

Scheduled maturities of time deposits as of June 30, 2025 for the next five years are shown in Table 5.2.

Scheduled Maturities of Time Deposits

6 unchanged sentences

The Company considers the reciprocal deposits to be in-market deposits, as distinguished from traditional out-of-market brokered deposits.

There were no one-way deposits at March 31, 2025 or December 31, 2024.

The composition of network deposits as of March 31, 2025 and December 31, 2024 is shown in Table 5.3.

There were no one-way deposits at June 30, 2025 or December 31, 2024.

The composition of network deposits as of June 30, 2025 and December 31, 2024 is shown in Table 5.3.

Network Deposits

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

CDARS $ 21,518 $ 19,292

1 unchanged sentence

Total network deposits $ 788,490 $ 693,745

Table 5.4 presents interest expense recognized on interest-bearing deposits for the periods ended March 31, 2025 and 2024.

Table 5.4 presents interest expense recognized on interest-bearing deposits for the periods ended June 30, 2025 and 2024.

Interest Expense Recognized on Interest-Bearing Deposits

Three months ended

(in thousands) March 31, 2025 March 31, 2024

Three months ended Six months ended

(in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Interest-bearing transaction accounts $ 1,043 $ 1,104 $ 2,155 $ 2,230

2 unchanged sentences

Time accounts, $ 250 or more

3,945 2,412 7,701 6,235

Other time accounts 3,845 957 7,718 2,502

5 unchanged sentences

The subordinated notes have a maturity date of September 1, 2032 and bear interest, payable semi-annually, at the rate of 6.00 % per annum until September 1, 2027.

On that date, the interest rate will be adjusted to float at a rate equal to the three-month Term SOFR plus 329.0 basis points ( 7.58 % as of March 31, 2025) until maturity.

On that date, the interest rate will be adjusted to float at a rate equal to the three-month Term SOFR plus 329.0 basis points ( 7.50 % as of June 30, 2025) until maturity.

The notes include a right of prepayment, on or after August 17, 2027 or, in certain limited circumstances, before that date.

2 unchanged sentences

Eligible amounts will be phased out by 20% per year beginning five years before the maturity date of the notes.

Debt issuance costs incurred in conjunction with the notes were $ 1.5 million, of which $ 0.4 million has been amortized as of March 31, 2025.

Debt issuance costs incurred in conjunction with the notes were $ 1.5 million, of which $ 0.4 million has been amortized as of June 30, 2025.

The Company reflects debt issuance costs as a direct deduction from the face of the note.

The debt issuance costs are amortized into interest expense through the maturity period.

At March 31, 2025 and December 31, 2024, the carrying value of the Company’s subordinated notes outstanding was $ 73.9 million.

At June 30, 2025 and December 31, 2024, the carrying value of the Company’s subordinated notes outstanding was $ 74.0 million and $ 73.9 million, respectively.

Other borrowings :

3 unchanged sentences

Financing Availability with the FHLB

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Total financing ability from the FHLB $ 1,290,446 $ 1,212,209

4 unchanged sentences

Available borrowing capacity with the FHLB $ 557,946 $ 510,709

At March 31, 2025 and December 31, 2024, the Company had the ability to borrow from the Federal Reserve Discount Window.

The borrowings were available at an interest rate of 4.50 % as of March 31, 2025.

At March 31, 2025 and December 31, 2024, the borrowing capacity under this arrangement was $ 856.4 million and $ 862.1 million, respectively.

There were no amounts outstanding at March 31, 2025 or December 31, 2024.

As of June 30, 2025 and December 31, 2024, the Company had the ability to borrow from the Federal Reserve Discount Window.

The borrowings were available at an interest rate of 4.50 % as of June 30, 2025.

At June 30, 2025 and December 31, 2024, the borrowing capacity under this arrangement was $ 926.6 million and $ 862.1 million, respectively.

There were no amounts outstanding at June 30, 2025 or December 31, 2024.

The borrowing line is secured by certain liens on the Company’s loans and certain available-for-sale securities.

At March 31, 2025 and December 31, 2024, the Company had five unsecured federal funds lines of credit totaling $ 175.0 million with five of its correspondent banks.

The borrowings were available at interest rates ranging from 4.50 % to 5.70 % as of March 31, 2025.

There were no amounts outstanding at March 31, 2025 or December 31, 2024.

At June 30, 2025 the Company had five unsecured federal funds lines of credit totaling $ 185.0 million with five of its correspondent banks.

At December 31, 2024, the Company had five unsecured federal funds lines of credit totaling $ 175.0 million with five of its correspondent banks.

The borrowings were available at interest rates ranging from 4.50 % to 5.70 % as of June 30, 2025.

There were no amounts outstanding at June 30, 2025 or December 31, 2024.

Shareholders’ Equity

5 unchanged sentences

However, under the two-class method, the difference in EPS is not significant for these participating securities.

Three months ended

(in thousands, except share count and earnings per common share) March 31, 2025 March 31, 2024

Three months ended Six months ended

(in thousands, except share count and earnings per common share) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Net income $ 14,508 $ 10,782 $ 27,619 $ 21,413

5 unchanged sentences

Diluted EPS $ 0.68 $ 0.51 $ 1.30 $ 1.12

The Company did not have any anti-dilutive shares at March 31, 2025 or March 31, 2024.

The Company did not have any anti-dilutive shares at June 30, 2025 or June 30, 2024.

(b) Dividends

The board of directors declared on January 16, 2025, and the Company subsequently paid, a cash dividend of $ 0.20 per share, totaling $ 4.3 million.

The board of directors declared on April 17, 2025, and the Company subsequently paid, a cash dividend of $ 0.20 per share, totaling $ 4.3 million.

6 unchanged sentences

Shares granted to non-employee directors vested immediately upon grant, while shares granted to certain employees, officers, and executives vest ratably over three , five , or seven years (as defined in the respective agreements).

Since the completion of the IPO, the Company has granted RSAs under the Equity Incentive Plan to certain executives, which vest ratably over three or five years (as defined in the respective agreements), and to

directors, which vest over one year .

All RSAs were granted at the fair value of common stock at the time of the award.

The RSAs are considered fixed awards, as the number of shares and fair value are known at the date of grant and the fair value at the grant date is amortized over the service period.

For both the three months ended March 31, 2025 and the three months ended March 31, 2024, $ 0.3 million of non-cash stock compensation expense was recognized.

As of March 31, 2025, there was approximately $ 2.1 million of unrecognized compensation expense related to the 111,786 unvested restricted shares.

The Company recognized $ 0.4 million and $ 0.3 million of non-cash stock compensation expense for the three months ended June 30, 2025 and June 30, 2024, respectively.

The Company recognized $ 0.6 million of non-cash stock compensation expense for both the six months ended June 30, 2025 and June 30, 2024, respectively.

As of June 30, 2025, there was approximately $ 2.9 million of unrecognized compensation expense related to the 129,448 unvested restricted shares.

The holders of unvested RSAs are entitled to dividends at the same per-share ratio as holders of common stock.

Tax benefits for dividends paid on unvested RSAs are recorded as tax benefits in the consolidated statements of income with a corresponding decrease to current taxes payable.

Such tax benefits and related expense are expected to be recognized over the weighted average term remaining on the unvested restricted shares of 2.82 years as of March 31, 2025.

The impact of tax benefits for dividends paid on unvested restricted stock on the Company’s unaudited consolidated statements of income for the three months ended March 31, 2025 and March 31, 2024 was immaterial.

Such tax benefits and related expense are expected to be recognized over the weighted average term remaining on the unvested restricted shares of 2.99 years as of June 30, 2025.

The impact of tax benefits for dividends paid on unvested restricted stock on the Company’s unaudited consolidated statements of income for the three and six months ended June 30, 2025 and June 30, 2024 was immaterial.

Table 7.2 summarizes activity related to restricted shares for the periods indicated.

Unvested Restricted Share Activity

For the three months ended March 31,

Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value

For the three months ended June 30,

For the six months ended June 30,

2025 2024 2025 2024

Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value

Beginning of the period balance 111,786 $ 22.08 162,348 $ 21.22 120,577 $ 21.36 69,338 $ 20.53

6 unchanged sentences

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs.

These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.

These are agreements to provide credit or to support the credit of others, as long as

conditions established in the contract are met, and usually have expiration dates.

Commitments may expire without being used.

2 unchanged sentences

The Company uses the same credit policies in making commitments to originate loans and lines of credit as it does for on-balance sheet instruments, including obtaining collateral at exercise of the commitment.

The contractual

amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets at the dates indicated are presented in Table 8.1.

The contractual amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets at the dates indicated are presented in Table 8.1.

Unfunded Loan Commitments and Standby Letters of Credit

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Commercial lines of credit $ 242,896 $ 230,063

7 unchanged sentences

The Company records an allowance for credit losses on unfunded loan commitments at the consolidated balance sheet date based on estimates of the probability that these commitments will be drawn upon according to historical utilization experience of the different types of commitments and historical loss rates determined for pooled funded loans.

The allowance for credit losses on unfunded commitments totaled $ 0.5 million as of March 31, 2025 and $ 0.7 million as of December 31, 2024, which is recorded in “Interest payable and other liabilities” in the unaudited consolidated balance sheets.

The allowance for credit losses on unfunded commitments totaled $ 0.6 million as of June 30, 2025 and $ 0.7 million as of December 31, 2024, which is recorded in “Interest payable and other liabilities” in the unaudited consolidated balance sheets.

Concentrations of credit risk :

1 unchanged sentence

Although the Company has a diversified loan portfolio, a substantial portion is secured by commercial and residential real estate.

In management’s judgment, a concentration of loans exists in real estate related loans, which represented approximately 86.62 % of the Company’s loan portfolio at March 31, 2025 and 86.41 % of the Company’s loan portfolio at December 31, 2024.

In management’s judgment, a concentration of loans exists in real estate related loans, which represented approximately 86.97 % of the Company’s loan portfolio at June 30, 2025 and 86.41 % of the Company’s loan portfolio at December 31, 2024.

Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, or a decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on the collectability of these loans.

1 unchanged sentence

Deposit concentrations :

At March 31, 2025, the Company had 104 deposit relationships that exceeded $ 5.0 million each, totaling $ 2.3 billion, or approximately 60.87 % of total deposits.

The Company’s largest single deposit relationship at March 31, 2025 totaled $ 400.0 million, or approximately 10.71 % of total deposits.

At June 30, 2025, the Company had 105 deposit relationships that exceeded $ 5.0 million each, totaling $ 2.3 billion, or approximately 59.91 % of total deposits.

The Company’s largest single deposit relationship at June 30, 2025 totaled $ 366.4 million, or approximately 9.41 % of total deposits.

Management maintains the Company’s liquidity position and lines of credit with correspondent banks to mitigate the risk of large withdrawals by this group of large depositors.

4 unchanged sentences

The Company maintains funds on deposit with other FDIC-insured financial institutions under correspondent banking agreements.

Uninsured deposits through these agreements totaled approximately $ 37.8 million and $ 29.2 million at March 31, 2025 and December 31, 2024, respectively.

Uninsured deposits through these agreements totaled approximately $ 47.9 million and $ 29.2 million at June 30, 2025 and December 31, 2024, respectively.

Equity investments :

The Company has committed to and is invested in a limited number of venture funds.

As of March 31, 2025 and December 31, 2024, the estimated remaining commitment for these funds totaled $ 14.6 million and $ 10.8 million, respectively.

As of June 30, 2025 and December 31, 2024, the estimated remaining commitment for these funds totaled $ 14.5 million and $ 10.8 million, respectively.

Litigation Matters

2 unchanged sentences

Subsequent Events

On April 17, 2025, the board of directors of the Company declared a cash dividend of $ 0.20 per common share, which the Company expects to pay on May 12, 2025 to shareholders of record as of May 5, 2025.

On July 4, 2025, the President signed H.R.

1, the “One Big Beautiful Bill Act,” into law.

The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.

The Act also made certain changes to the deductibility of the cost of meals and charitable contributions that are effective for tax years beginning after December 31, 2025.

These changes were not reflected in the income tax provision for the period ended June 30, 2025, as enactment occurred after the balance sheet date.

The Company is currently evaluating the impact on future periods.

On July 17, 2025, the board of directors of the Company declared a cash dividend of $ 0.20 per common share, which the Company expects to pay on August 11, 2025 to shareholders of record as of August 4, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements