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Item 1. Financial Statements

2025-07-28 compared with 2025-04-28 · 413 added, 147 removed, 1129 unchanged (33% of the section changed)

37 unchanged sentences

Preferred stock, $ 1 par value, 2,500,000 shares authorized, none issued or outstanding

Common stock, $ 1 par value, 10,000,000 shares authorized, 5,520,892 and 5,518,210 issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Common stock, $ 1 par value, 10,000,000 shares authorized, 5,522,271 and 5,518,210 issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 9,837 9,311

6 unchanged sentences

Consolidated Statements of Income

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In Thousands, Except Per Share Data) 2025 2024 2025 2024

13 unchanged sentences

Net Interest Income 33,592 27,053 64,889 53,500

(Benefit) provision for credit losses

Provision (benefit) for credit losses

1,976 ( 120 ) 567 29

2 unchanged sentences

Other Operating Income

Purchased receivable income 6,150 1,345

Mortgage banking income 7,400 5,884 11,651 9,915

Purchased receivable income 5,897 1,242 12,047 2,587

Bankcard fees 1,153 1,105 2,227 2,022

1 unchanged sentence

Unrealized gain (loss) on marketable equity securities

78 ( 60 ) 28 254

Other income 1,386 834 2,324 1,522

5 unchanged sentences

Professional and outside services 1,113 726 2,228 1,481

Insurance expense 1,017 779

Marketing expense 1,042 690 1,714 1,203

Insurance expense 756 692 1,773 1,471

Compensation expense - Sallyport acquisition payments

600 — 1,200 —

OREO expense, net rental income and gains on sale 2 2 5 ( 389 )

Other operating expense 3,708 1,944

Other expense 2,651 2,013 5,199 3,957

Total Other Operating Expense 32,488 25,194 60,659 48,832

11 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) 2025 2024 2025 2024

6 unchanged sentences

Unrealized holding gains (losses) arising during the period

( 99 ) 56 ( 343 ) 328

Foreign currency translation income (loss) 145 — 150 —

2 unchanged sentences

Other comprehensive income, net of tax

1,955 2,048 4,630 2,452

Comprehensive income

55 unchanged sentences

Balance as of March 31, 2025 5,521 $ 5,521 $ 9,523 $ 269,062 ($ 4,350 ) $ 279,756

Cash dividend on common stock ($ 0.64 per share)

— — — ( 3,585 ) — ( 3,585 )

Stock-based compensation expense — — 327 — — 327

Exercise of stock options and vesting of restricted stock units, net 1 1 ( 13 ) — — ( 12 )

Other comprehensive gain, net of tax

— — — — 1,955 1,955

Net income — — — 11,778 — 11,778

Balance as of June 30, 2025

5,522 $ 5,522 $ 9,837 $ 277,255 ($ 2,395 ) $ 290,219

See notes to consolidated financial statements

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In Thousands) 2025 2024

7 unchanged sentences

Deferred loan fees and amortization, net of costs 671 ( 238 )

(Benefit) provision for credit losses ( 1,409 ) 149

Provision for credit losses 567 29

Additions to home mortgage servicing rights carried at fair value ( 2,740 ) ( 1,619 )

15 unchanged sentences

Purchases of investment securities available for sale ( 24,691 ) ( 9,977 )

Purchases of marketable equity securities — ( 1,964 )

Purchases of FHLB stock ( 21,588 ) ( 11,775 )

Proceeds from sales/calls/maturities of securities available for sale 80,433 65,823

Proceeds from calls of marketable equity securities

Proceeds from redemption of FHLB stock 18,576 9,826

Increase in purchased receivables, net ( 21,457 ) ( 856 )

(Increase) decrease in purchased receivables, net ( 35,081 ) 11,120

Increase in loans, net

( 112,738 ) ( 109,573 )

Proceeds from the sale of loans

Proceeds from sale of other real estate owned — 392

4 unchanged sentences

Increase (decrease) in deposits 128,981 ( 21,249 )

(Decrease) increase in borrowings ( 9,909 ) ( 106 )

Increase in borrowings 39,981 30,286

Repurchase of common stock — ( 788 )

Proceeds from the issuance of common stock ( 1 ) —

Cash dividends paid ( 7,069 ) ( 6,709 )

6 unchanged sentences

Interest paid $ 21,590 $ 18,722

Noncash commitments to invest in Low Income Housing Tax Credit Partnerships $ 13,407 $ —

Non-cash lease liability arising from obtaining right of use assets $ — $ 288

Cash dividends declared but not paid $ 89 $ 72

12 unchanged sentences

The Company has evaluated subsequent events and transactions for potential recognition or disclosure.

Operating results for the interim period ended March 31, 2025 are not necessarily indicative of the results anticipated for the year ending December 31, 2025.

Operating results for the interim period ended June 30, 2025 are not necessarily indicative of the results anticipated for the year ending December 31, 2025.

These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

10 unchanged sentences

ASU 2023-09 is effective for the Company for fiscal years beginning after December 15, 2024 and may be applied on a prospective or retrospective basis.

The Company intends to adopt ASU 2023-09 prospectively and does not believe that the adoption will have a material impact on the Company's consolidated financial statements.

The Company intends to adopt ASU 2023-09 prospectively and we expect the adoption to expand our disclosures around Income Taxes.

Business Combinations

1 unchanged sentence

The primary reason for the acquisition was to expand the Company's presence in the specialty finance industry.

SCF provides factoring, asset based lending, and alternative working capital solutions to small and medium sized enterprises in the United States, and, to a lessor extent, in Canada and the United Kingdom through its subsidiaries.

SCF provides factoring, asset based lending, and alternative working capital solutions to small and medium sized enterprises in the United States, and, to a lesser extent, in Canada and the United Kingdom through its subsidiaries.

SCF will operate as a wholly-owned subsidiary of the Bank, and is expected to complement the products currently offered by Northrim Funding Services, a factoring division of the Bank.

2 unchanged sentences

The Company had pre-existing loans to SCF which totaled $ 12.0 million.

The fair value of these loans approximate their carrying value, and as a result of the acquisition, the loans were effectively settled at their carrying value, resulting in no gain or loss.

The fair value of these loans approximated their carrying value, and as a result of the acquisition, the loans were effectively settled at their carrying value, resulting in no gain or loss.

The fair value of the loans were considered as part of the total purchase consideration in the transaction.

47 unchanged sentences

Additionally, deal-related costs of $ 1.1 million for the year ended December 31, 2024 have been incurred and expensed in connection with the acquisition of Sallyport and recognized within professional and outside services expense on the Consolidated Statements of Income .

The following table presents unaudited pro forma results of operations for the three-month period ended March 31, 2024 as if the acquisition of SCF had occurred on January 1, 2024.

The following tables present unaudited pro forma results of operations for the three and six-month periods ended June 30, 2024 as if the acquisition of SCF had occurred on January 1, 2024.

The proforma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2024, primarily due to the Company's lower cost of funding as compared to SCF.

(In Thousands, except per share data) Three Months Ended March 31, 2024

(In Thousands, except per share data) Three Months Ended June 30, 2024

Pro Forma Adjustments 3

6 unchanged sentences

Weighted Average Shares Outstanding, Diluted 5,558,580 5,558,580

1 SCF represents unaudited results from January 1 to March 31 for 2024.

(In Thousands, except per share data) Six Months Ended June 30, 2024

Pro Forma Adjustments 3

Pro Forma Combined

Net interest and other income $ 70,921 $ 9,993 $ 80,914

Net income 17,219 2,133 ( 606 ) 18,746

Earnings Per Share, Basic $ 3.13 $ 3.41

Earnings Per Share, Diluted $ 3.10 $ 3.37

Weighted Average Shares Outstanding, Basic 5,500,083 5,500,083

Weighted Average Shares Outstanding, Diluted 5,562,025 5,562,025

1 SCF represents unaudited results from April 1 to June 30 for 2024.

2 SCF represents unaudited results from January 1 to June 30 for 2024.

3 Proforma adjustments include a provision for income taxes using the Company's statutory rate.

1 unchanged sentence

Marketable Equity Securities

The Company held marketable equity securities with fair values of $ 8.7 million at both March 31, 2025 and December 31, 2024.

The Company held marketable equity securities with fair values of $ 8.7 million at both June 30, 2025 and December 31, 2024.

The realized and unrealized gains (losses) recognized on marketable equity securities in other operating income in the Company's Consolidated Statements of Income were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) 2025 2024 2024 2023

6 unchanged sentences

(In Thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value

March 31, 2025

June 30, 2025

Securities available for sale

5 unchanged sentences

(In Thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

March 31, 2025

June 30, 2025

Securities held to maturity

15 unchanged sentences

Total securities held to maturity, net of ACL $ 36,750 $ 175 ($ 1,175 ) $ 35,750

Gross unrealized losses on available for sale securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2025 and December 31, 2024 were as follows:

Gross unrealized losses on available for sale securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2025 and December 31, 2024 were as follows:

Less Than 12 Months More Than 12 Months Total

(In Thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses

March 31,2025

June 30, 2025

Securities available for sale

19 unchanged sentences

Consideration is given to the extent to which the fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At March 31, 2025, the Company had six available for sale securities in an unrealized loss position without an ACL, respectively, that have been in a loss position for less than twelve months.

There were 36 available for sale securities without an ACL with unrealized losses at March 31, 2025 that have been in a loss position for more than twelve months.

At March 31, 2025, the Company had three held to maturity securities in an unrealized loss position without an ACL that have been in a loss position for more than twelve months.

At June 30, 2025, the Company had two available for sale securities in an unrealized loss position without an ACL that have been in a loss position for less than twelve months.

There were 32 available for sale securities without an ACL with unrealized losses at June 30, 2025 that have been in a loss position for more than twelve months.

At June 30, 2025, the Company had two held to maturity securities in an unrealized loss position without an ACL that have been in a loss position for more than twelve months.

Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

Accordingly, as of March 31, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, primarily changes in interest rates and other market conditions, and therefore no losses have been recognized in the Company's Consolidated Statements of Income .

At March 31, 2025 and December 31, 2024, carrying amounts of $ 200.8 million and $ 177.4 million in securities were pledged for deposits and borrowings, respectively.

The amortized cost and estimated fair values of available for sale and held to maturity debt securities at March 31, 2025, are distributed by contractual maturity as shown below.

Accordingly, as of June 30, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, primarily changes in interest rates and other market conditions, and therefore no losses have been recognized in the Company's Consolidated Statements of Income .

At June 30, 2025 and December 31, 2024, carrying amounts of $ 192.6 million and $ 177.4 million in securities were pledged for deposits and borrowings, respectively.

The amortized cost and estimated fair values of available for sale and held to maturity debt securities at June 30, 2025, are distributed by contractual maturity as shown below.

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

(In Thousands) Amortized Cost Fair Value

June 30, 2025

US Treasury and government sponsored entities

1 unchanged sentence

1-5 years 216,900 214,494

5-10 years 9,558 9,734

Total $ 388,946 $ 384,040

11 unchanged sentences

Total $ 35,480 $ 35,531

There were no proceeds from sales of investment securities for the three-month periods ending March 31, 2025 and 2024.

A summary of interest income for the three-month periods ending March 31, 2025 and 2024, on available for sale investment securities are as follows:

Three Months Ended March 31,

There were no proceeds from sales of investment securities for the three and six-month periods ending June 30, 2025 and 2024.

A summary of interest income for the three and six-month periods ending June 30, 2025 and 2024, on available for sale investment securities are as follows:

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) 2025 2024 2025 2024

8 unchanged sentences

Loans Held for Sale

Loans held for sale are comprised entirely of 1-4 family residential mortgage loans as of March 31, 2025 and December 31, 2024.

Loans held for sale are comprised entirely of 1-4 family residential mortgage loans as of June 30, 2025 and December 31, 2024.

The Company designates loans held for sale as either carried at fair value or the lower of cost or fair value at loan level at origination.

1 unchanged sentence

The following table presents amortized cost and unpaid principal balance of loans, categorized by the segments used in the Company's Current Expected Credit Losses (“CECL”) methodology to assess credit risk, for the periods indicated:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In Thousands) Amortized Cost Unpaid Principal Difference Amortized Cost Unpaid Principal Difference

15 unchanged sentences

Net loans $ 2,179,530 $ 2,212,120 ($ 10,005 ) $ 2,107,243 $ 2,138,450 ($ 9,187 )

The difference between the amortized cost and unpaid principal balance is net deferred origination fees totaling $ 9.7 million at March 31, 2025 and $ 9.2 million at December 31, 2024.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 9.9 million and $ 8.4 million at March 31, 2025 and December 31, 2024, respectively, and is included in other assets in the Consolidated Balance Sheets .

The difference between the amortized cost and unpaid principal balance is net deferred origination fees totaling $ 10.0 million at June 30, 2025 and $ 9.2 million at December 31, 2024.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 9.7 million and $ 8.4 million at June 30, 2025 and December 31, 2024, respectively, and is included in other assets in the Consolidated Balance Sheets .

Allowance for Credit Losses

The table below presents activity in the ACL related to loans held for investment for the periods indicated.

Three Months Ended March 31, Beginning Balance Credit Loss Expense (Benefit) Charge-offs Recoveries Ending Balance

Three Months Ended June 30, Beginning Balance Credit Loss Expense (Benefit) Charge-offs Recoveries Ending Balance

(In Thousands)

27 unchanged sentences

Total $ 17,533 $ 135 $ — $ 26 $ 17,694

Six Months Ended June 30, Beginning Balance Credit Loss Expense (Benefit) Charge-offs Recoveries Ending Balance

(In Thousands)

Commercial & industrial loans $ 5,800 $ 1,818 ($ 189 ) $ 79 $ 7,508

Commercial real estate:

Owner occupied properties 2,944 ( 673 ) — — 2,271

Non-owner occupied and multifamily properties 3,967 216 — — 4,183

Residential real estate:

1-4 family residential properties secured by first liens 4,364 329 — — 4,693

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens 775 139 — 14 928

1-4 family residential construction loans 230 40 — — 270

Other construction, land development and raw land loans 3,589 ( 1,281 ) — — 2,308

Obligations of states and political subdivisions in the US 106 29 — — 135

Agricultural production, including commercial fishing 169 25 — 3 197

Consumer loans 71 24 ( 16 ) 3 82

Other loans 5 5 — — 10

Total $ 22,020 $ 671 ($ 205 ) $ 99 $ 22,585

Commercial & industrial loans $ 3,438 $ 532 $ — $ 77 $ 4,047

Commercial real estate:

Owner occupied properties 2,867 96 — — 2,963

Non-owner occupied and multifamily properties 3,294 205 — — 3,499

Residential real estate:

1-4 family residential properties secured by first liens 3,470 19 — — 3,489

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens 551 104 — 10 665

1-4 family residential construction loans 191 ( 11 ) — — 180

Other construction, land development and raw land loans 3,127 ( 601 ) — — 2,526

Obligations of states and political subdivisions in the US 80 20 — — 100

Agricultural production, including commercial fishing 168 9 ( 25 ) 5 157

Consumer loans 81 ( 21 ) — 1 61

Other loans 3 4 — — 7

Total $ 17,270 $ 356 ($ 25 ) $ 93 $ 17,694

The following table shows gross charge-offs by year of loan origination for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(In Thousands) 2025 2024 2023 2022 2021 Prior Total

6 unchanged sentences

Loans are graded on a scale of 1 to 10 and, loans graded 1 – 6 are considered “pass” grade loans.

Loans graded 7 or higher are considered “classified” loans.

Loans graded 7 or higher are considered “criticized” loans.

A description of the general characteristics of the AQR risk classifications are as follows:

4 unchanged sentences

The category does not include loans with undue or unwarranted credit risks that constitute identifiable weaknesses.

Classified loans:

Criticized loans:

Special Mention – 7:

13 unchanged sentences

Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below.

March 31, 2025 2025 2024 2023 2022 2021 Prior Total

June 30, 2025 2025 2024 2023 2022 2021 Prior Total

(In Thousands)

1 unchanged sentence

Pass $ 53,042 $ 97,462 $ 67,047 $ 106,048 $ 36,135 $ 81,015 $ 440,749

Classified 792 119 6,120 16,724 14,160 7,259 45,174

Criticized 766 3,819 6,779 16,615 10,467 7,036 45,482

Total commercial & industrial loans $ 53,808 $ 101,281 $ 73,826 $ 122,663 $ 46,602 $ 88,051 $ 486,231

2 unchanged sentences

Pass $ 22,786 $ 83,781 $ 47,458 $ 70,085 $ 57,289 $ 142,440 $ 423,839

Classified — — — 3,743 — 16,692 20,435

Criticized 6,002 — — 3,739 — 11,917 21,658

Total commercial real estate owner occupied properties $ 28,788 $ 83,781 $ 47,458 $ 73,824 $ 57,289 $ 154,357 $ 445,497

1 unchanged sentence

Pass $ 50,479 $ 119,227 $ 67,539 $ 140,597 $ 79,591 $ 224,118 $ 681,551

Classified — — — 1,162 29 9,899 11,090

Criticized — — — 1,152 — 9,870 11,022

Total commercial real estate non-owner occupied and multifamily properties $ 50,479 $ 119,227 $ 67,539 $ 141,749 $ 79,591 $ 233,988 $ 692,573

2 unchanged sentences

Pass $ 963 $ 68,021 $ 87,706 $ 35,881 $ 3,060 $ 10,181 $ 205,812

Classified — — 521 315 — 52 888

Criticized — — 518 314 — 181 1,013

Total residential real estate 1-4 family residential properties secured by first liens $ 963 $ 68,021 $ 88,224 $ 36,195 $ 3,060 $ 10,362 $ 206,825

1 unchanged sentence

Pass $ 11,047 $ 20,250 $ 12,358 $ 5,880 $ 2,671 $ 7,957 $ 60,163

Classified — — 373 — — 270 643

Criticized — — 372 — — 76 448

Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens $ 11,047 $ 20,250 $ 12,730 $ 5,880 $ 2,671 $ 8,033 $ 60,611

1 unchanged sentence

Pass $ 14,542 $ 12,561 $ 413 $ — $ — $ 8,261 $ 35,777

Classified — — — — — — —

Criticized — — — — — — —

Total residential real estate 1-4 family residential construction loans $ 14,542 $ 12,561 $ 413 $ — $ — $ 8,261 $ 35,777

1 unchanged sentence

Pass $ 27,388 $ 61,777 $ 64,431 $ 14,141 $ 9,042 $ 7,653 $ 184,432

Classified — — — — — 1,577 1,577

Criticized — — — — 28 1,547 1,575

Total other construction, land development and raw land loans $ 27,388 $ 61,777 $ 64,431 $ 14,141 $ 9,070 $ 9,200 $ 186,007

1 unchanged sentence

Pass $ — $ 3,530 $ — $ 27,949 $ — $ — $ 31,479

Classified — — — — — — —

Criticized — — — — — — —

Total obligations of states and political subdivisions in the US $ — $ 3,530 $ — $ 27,949 $ — $ — $ 31,479

1 unchanged sentence

Pass $ 1,490 $ 8,035 $ 9,311 $ 7,882 $ 15,274 $ 4,211 $ 46,203

Classified — — — — 137 — 137

Criticized — — — — 137 — 137

Total agricultural production, including commercial fishing $ 1,490 $ 8,035 $ 9,311 $ 7,882 $ 15,411 $ 4,211 $ 46,340

1 unchanged sentence

Pass $ 1,713 $ 2,368 $ 1,893 $ 596 $ 57 $ 1,007 $ 7,634

Classified — — 45 5 — — 50

Criticized — — — 4 — 25 29

Total consumer loans $ 1,713 $ 2,368 $ 1,893 $ 600 $ 57 $ 1,032 $ 7,663

Pass $ — $ — $ 1,496 $ 94 $ 280 $ 1,242 $ 3,112

Classified — — — — — — —

Criticized — — — — — — —

Total other loans $ — $ — $ 1,496 $ 94 $ 280 $ 1,242 $ 3,112

Pass $ 183,450 $ 477,012 $ 359,652 $ 409,153 $ 203,399 $ 488,085 $ 2,120,751

Classified 792 119 7,059 21,949 14,326 35,749 79,994

Criticized 6,768 3,819 7,669 21,824 10,632 30,652 81,364

Total loans $ 190,218 $ 480,831 $ 367,321 $ 430,977 $ 214,031 $ 518,737 $ 2,202,115

2 unchanged sentences

Total pass loans, net of government guarantees $ 174,317 $ 436,022 $ 340,620 $ 404,186 $ 190,561 $ 470,214 $ 2,015,920

Total classified loans $ 792 $ 119 $ 7,059 $ 21,949 $ 14,326 $ 35,749 $ 79,994

Total criticized loans $ 6,768 $ 3,819 $ 7,669 $ 21,824 $ 10,632 $ 30,652 $ 81,364

Government guarantees — — ( 1,568 ) ( 17,056 ) ( 9,427 ) ( 12,722 ) ( 40,773 )

Total classified loans, net government guarantees $ 792 $ 119 $ 5,455 $ 4,815 $ 1,574 $ 22,795 $ 35,550

Total criticized loans, net government guarantees $ 6,768 $ 3,819 $ 6,101 $ 4,768 $ 1,205 $ 17,930 $ 40,591

December 31, 2024 2024 2023 2022 2021 2020 Prior Total

2 unchanged sentences

Pass $ 112,361 $ 70,871 $ 120,377 $ 37,628 $ 10,581 $ 40,288 $ 392,106

Classified 201 3,386 16,888 14,973 5,759 4,609 45,816

Criticized 201 3,386 16,888 14,973 5,759 4,609 45,816

Total commercial & industrial loans $ 112,562 $ 74,257 $ 137,265 $ 52,601 $ 16,340 $ 44,897 $ 437,922

2 unchanged sentences

Pass $ 68,074 $ 48,655 $ 74,611 $ 64,234 $ 74,662 $ 74,987 $ 405,223

Classified — — 492 — 348 12,029 12,869

Criticized — — 492 — 348 12,029 12,869

Total commercial real estate owner occupied properties $ 68,074 $ 48,655 $ 75,103 $ 64,234 $ 75,010 $ 87,016 $ 418,092

1 unchanged sentence

Pass $ 114,879 $ 70,806 $ 104,924 $ 73,008 $ 65,592 $ 175,349 $ 604,558

Classified — — 1,166 30 — 9,908 11,104

Criticized — — 1,166 30 — 9,908 11,104

Total commercial real estate non-owner occupied and multifamily properties $ 114,879 $ 70,806 $ 106,090 $ 73,038 $ 65,592 $ 185,257 $ 615,662

2 unchanged sentences

Pass $ 103,919 $ 108,642 $ 43,562 $ 3,279 $ 4,228 $ 6,978 $ 270,608

Classified — 205 — — — 153 358

Criticized — 205 — — — 153 358

Total residential real estate 1-4 family residential properties secured by first liens $ 103,919 $ 108,847 $ 43,562 $ 3,279 $ 4,228 $ 7,131 $ 270,966

1 unchanged sentence

Pass $ 18,946 $ 13,553 $ 5,116 $ 2,695 $ 2,097 $ 6,083 $ 48,490

Classified — 372 — — — 298 670

Criticized — 372 — — — 298 670

Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens $ 18,946 $ 13,925 $ 5,116 $ 2,695 $ 2,097 $ 6,381 $ 49,160

1 unchanged sentence

Pass $ 25,458 $ 4,118 $ 2,353 $ — $ — $ 7,587 $ 39,516

Classified — — — — — — —

Criticized — — — — — — —

Total residential real estate 1-4 family residential construction loans $ 25,458 $ 4,118 $ 2,353 $ — $ — $ 7,587 $ 39,516

1 unchanged sentence

Pass $ 63,430 $ 60,693 $ 51,809 $ 25,836 $ 1,236 $ 7,942 $ 210,946

Classified — — — — — 1,615 1,615

Criticized — — — — — 1,615 1,615

Total other construction, land development and raw land loans $ 63,430 $ 60,693 $ 51,809 $ 25,836 $ 1,236 $ 9,557 $ 212,561

1 unchanged sentence

Pass $ — $ — $ 29,471 $ — $ — $ — $ 29,471

Classified — — — — — — —

Criticized — — — — — — —

Total obligations of states and political subdivisions in the US $ — $ — $ 29,471 $ — $ — $ — $ 29,471

1 unchanged sentence

Pass $ 8,097 $ 8,776 $ 8,380 $ 15,847 $ 3,109 $ 1,631 $ 45,840

Classified — — — — — — —

Criticized — — — — — — —

Total agricultural production, including commercial fishing $ 8,097 $ 8,776 $ 8,380 $ 15,847 $ 3,109 $ 1,631 $ 45,840

1 unchanged sentence

Pass $ 3,346 $ 2,377 $ 717 $ 75 $ 252 $ 820 $ 7,587

Classified — 45 5 — — 1 51

Criticized — 45 5 — — 1 51

Total consumer loans $ 3,346 $ 2,422 $ 722 $ 75 $ 252 $ 821 $ 7,638

Pass $ — $ 345 $ 122 $ 285 $ 1,683 $ — $ 2,435

Classified — — — — — — —

Criticized — — — — — — —

Total other loans $ — $ 345 $ 122 $ 285 $ 1,683 $ — $ 2,435

Pass $ 518,510 $ 388,836 $ 441,442 $ 222,887 $ 163,440 $ 321,665 $ 2,056,780

Classified 201 4,008 18,551 15,003 6,107 28,613 72,483

Criticized 201 4,008 18,551 15,003 6,107 28,613 72,483

Total loans $ 518,711 $ 392,844 $ 459,993 $ 237,890 $ 169,547 $ 350,278 $ 2,129,263

2 unchanged sentences

Total pass loans, net of government guarantees $ 483,266 $ 376,415 $ 433,715 $ 209,102 $ 161,849 $ 304,389 $ 1,968,736

Total classified loans $ 201 $ 4,008 $ 18,551 $ 15,003 $ 6,107 $ 28,613 $ 72,483

Total criticized loans $ 201 $ 4,008 $ 18,551 $ 15,003 $ 6,107 $ 28,613 $ 72,483

Government guarantees — ( 1,640 ) ( 14,816 ) ( 13,476 ) ( 5,183 ) ( 7,963 ) ( 43,078 )

Total classified loans, net government guarantees $ 201 $ 2,368 $ 3,735 $ 1,527 $ 924 $ 20,650 $ 29,405

Total criticized loans, net government guarantees $ 201 $ 2,368 $ 3,735 $ 1,527 $ 924 $ 20,650 $ 29,405

Past Due Loans:

5 unchanged sentences

Due Current Total Greater Than 90 Days Past Due Still Accruing

March 31, 2025

June 30, 2025

Commercial & industrial loans $ 795 $ 70 $ 1,499 $ 2,364 $ 483,867 $ 486,231 $ —

38 unchanged sentences

Nonaccrual loans:

Nonaccrual loans net of government guarantees totaled $ 8.0 million and $ 7.5 million at March 31, 2025 and December 31, 2024, respectively.

Nonaccrual loans net of government guarantees totaled $ 7.8 million and $ 7.5 million at June 30, 2025 and December 31, 2024, respectively.

The following table presents loans on nonaccrual status and loans on nonaccrual status for the periods presented for which there was no related ACL.

All loans with no ACL are individually evaluated for credit losses in the Company's CECL methodology.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In Thousands) Nonaccrual Nonaccrual With No ACL Nonaccrual Nonaccrual With No ACL

8 unchanged sentences

Other construction, land development and raw land loans 1,490 1,490 1,432 1,432

Consumer loans 25 — — —

Total nonaccrual loans 7,861 7,760 7,516 6,976

1 unchanged sentence

Net nonaccrual loans $ 7,791 $ 7,690 $ 7,516 $ 6,976

There was no interest on nonaccrual loans reversed through interest income during the three-month periods ending March 31, 2025 or March 31, 2024.

There was no interest earned on nonaccrual loans with a principal balance during the three-month periods ending March 31, 2025 and March 31, 2024.

However, the Company recognized interest income of $ 42,000 and $ 202,000 in the three-month periods ending March 31, 2025 and 2024, respectively, related to interest collected on nonaccrual loans whose principal had been paid down to zero.

There was no interest on nonaccrual loans reversed through interest income during the three or six-month periods ending June 30, 2025 or June 30, 2024.

There was no interest earned on nonaccrual loans with a principal balance during the six-month periods ending June 30, 2025 and June 30, 2024.

However, the Company recognized interest income of $ 45,000 and $ 32,000 in the three-month periods ending June 30, 2025 and 2024, respectively, and $ 87,000 and $ 234,000 in the six-month periods ending June 30, 2025 and 2024, respectively, related to interest collected on nonaccrual loans whose principal had been paid down to zero.

Loan Modifications:

5 unchanged sentences

The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Payment Modification Term and payment modifications Total Modifications Percentage of Class of Financing Receivable

3 unchanged sentences

Total $ — $ — $ — — %

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Term Modification Term and payment modifications Total Modifications Percentage of Class of Financing Receivable

2 unchanged sentences

Total $ — $ — $ — — %

The Company has no outstanding unfunded commitments to the borrowers included in the previous tables.

Six Months Ended June 30, 2025

Term Modification Term and payment modifications Total Modifications Percentage of Class of Financing Receivable

(In Thousands)

Commercial real estate:

Owner occupied properties — $ 3,252 $ 3,252 0.73 %

Total $ — $ 3,252 $ 3,252 0.15 %

Six Months Ended June 30, 2024

Term Modification Term and payment modifications Total Modifications Percentage of Class of Financing Receivable

(In Thousands)

Commercial & industrial loans $ 5,396 $ 265 $ 5,661 1.36 %

Total $ 5,396 $ 265 $ 5,661 0.30 %

The Company has no outstanding unfunded commitments to the borrowers included in the previous table.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty as of the dates indicated:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Principal Forgiveness Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (months)

2 unchanged sentences

Owner occupied properties $ — — % 0

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Principal Forgiveness Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (months)

1 unchanged sentence

Commercial & industrial loans $ — — % 0

Six Months Ended June 30, 2025

Principal Forgiveness Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (months)

(In Thousands)

Commercial real estate:

Owner occupied properties $ — — % 33

Six Months Ended June 30, 2024

Principal Forgiveness Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (months)

(In Thousands)

Commercial & industrial loans $ — 8 % 7

The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty as of the dates indicated.

March 31, 2025 December 31, 2024

These are loans that have been modified within twelve months of the dates indicated:

June 30, 2025 December 31, 2024

(In Thousands)

8 unchanged sentences

The following table presents the amortized cost basis of loans that had a payment default during the period indicated and were modified in the twelve months before default to borrowers experiencing financial difficulty:

Three Months Ended March 31, 2025

Term modification

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

Term modification Term modification

(In Thousands)

3 unchanged sentences

Other construction, land development and raw land loans — —

Three Months Ended March 31, 2024

Term modification

Total $ — $ —

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Term modification Term modification

(In Thousands)

6 unchanged sentences

The following table presents the payment performance of loans that have been modified in the last twelve months as of the date indicated:

March 31, 2025

60-89 Days Past Due Greater Than 89 Days Past Due Total Past Due Current

June 30, 2025

Greater Than 89 Days Past Due Total Past Due Current

(In Thousands)

6 unchanged sentences

Total $ 2,079 $ 2,079 $ 4,019 $ 6,098

March 31, 2024

30-59 Days Past Due Greater Than 89 Days Past Due Total Past Due Current Total

June 30, 2024

Total Past Due Current Total

(In Thousands)

12 unchanged sentences

Income on purchased receivables is accrued and recognized on the principal amount outstanding using an effective interest method except when management believes doubt exists as to the collectability of the income or principal.

There were seven nonperforming purchased receivables with a balance of $ 4.0 million as of March 31, 2025 and there were four nonperforming purchased receivable with a balance of $ 3.8 million as of December 31, 2024 for which management was not accruing income.

There were eight nonperforming purchased receivables with a balance of $ 4.0 million as of June 30, 2025 and there were four nonperforming purchased receivable with a balance of $ 3.8 million as of December 31, 2024 for which management was not accruing income.

The following table summarizes the components of net purchased receivables for the dates indicated:

(In Thousands) March 31, 2025 December 31, 2024

(In Thousands) June 30, 2025 December 31, 2024

Purchased receivables $ 112,530 $ 77,727

1 unchanged sentence

Total $ 109,098 $ 74,078

The following table sets forth information regarding changes in the ACL on purchased receivables for the period indicated:

Three Months Ended March 31,

The following table sets forth information regarding changes in the ACL on purchased receivables for the periods indicated:

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) 2025 2024 2025 2024

Balance at beginning of year $ 3,649 $ —

Balance at beginning of period $ 3,695 $ — $ 3,649 $ —

Charge-offs ( 281 ) — ( 281 ) —

2 unchanged sentences

Provision for purchased receivables

Balance at end of year $ 3,695 $ —

Balance at end of period $ 3,432 $ — $ 3,432 $ —

Servicing Rights

Mortgage servicing rights

The following table details the activity in the Company's mortgage servicing rights (“MSR”) for the three-month periods ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table details the activity in the Company's mortgage servicing rights (“MSR”) for the three and six-month periods ended June 30, 2025 and 2024:

Three Months Ended March 31, Six Months Ended June 30,

(In Thousands) 2025 2024 2025 2024

4 unchanged sentences

( 355 ) 239 ( 677 ) 528

( 463 ) ( 320 ) ( 996 ) ( 634 )

Balance, end of period $ 27,506 $ 21,077 $ 27,506 $ 21,077

1 unchanged sentence

(2) Represents changes due to collection/realization of expected cash flows over time.

The following table details information related to our serviced mortgage loan portfolio as of March 31, 2025 and December 31, 2024:

(In Thousands) March 31, 2025 December 31, 2024

The following table details information related to our serviced mortgage loan portfolio as of June 30, 2025 and December 31, 2024:

(In Thousands) June 30, 2025 December 31, 2024

Balance of mortgage loans serviced for others $ 1,553,987 $ 1,460,720

2 unchanged sentences

MSR as a percentage of serviced loans 1.77 % 1.81 %

The Company recognized servicing fees of $ 1.5 million and $ 1.0 million during the three-month periods ending March 31, 2025 and 2024, respectively, which includes contractually specified servicing fees and ancillary fees as a component of other noninterest income in the Company's Consolidated Statements of Income.

The Company recognized servicing fees of $ 1.4 million and $ 1.1 million during the three-month periods ending June 30, 2025 and 2024, respectively, and $ 2.9 million and $ 2.1 million during the six-month periods ending June 30, 2025 and 2024, respectively, which includes contractually specified servicing fees and ancillary fees as a component of other noninterest income in the Company's Consolidated Statements of Income.

The following table outlines the weighted average key assumptions used in measuring the fair value of MSRs and the sensitivity of the current fair value of MSRs to immediate adverse changes in those assumptions as of the dates indicated.

1 unchanged sentence

(In Thousands)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Fair value of MSRs

25 unchanged sentences

Commercial servicing rights

The commercial servicing rights asset (“CSR”) has a carrying value of $ 2.3 million at March 31, 2025 and $ 2.2 million at December 31, 2024, respectively, and is included in other assets and carried at fair value on the Company's Consolidated Balance Sheets .

Total commercial loans serviced for others were $ 295.3 million and $ 279.7 million at March 31, 2025 and December 31, 2024, respectively.

Key assumptions used in measuring the fair value of the CSR as of March 31, 2025 and December 31, 2024 include a constant prepayment rate of 11.38 % and a discount rate of 12.00 %.

The commercial servicing rights asset (“CSR”) has a carrying value of $ 2.4 million at June 30, 2025 and $ 2.2 million at December 31, 2024, respectively, and is included in other assets and carried at fair value on the Company's Consolidated Balance Sheets .

Total commercial loans serviced for others were $ 306.0 million and $ 279.7 million at June 30, 2025 and December 31, 2024, respectively.

Key assumptions used in measuring the fair value of the CSR as of June 30, 2025 and December 31, 2024 include a constant prepayment rate of 11.38 % and a discount rate of 12.00 %.

The Company's lease commitments consist primarily of agreements to lease land and office facilities that it occupies to operate several of its retail branch locations that are classified as operating leases and are recognized on the balance sheet as right-of-use (“ROU”) assets and lease liabilities.

As of March 31, 2025, the Company has operating lease ROU assets of $ 7.6 million and operating lease liabilities of $ 7.7 million.

As of June 30, 2025, the Company has operating lease ROU assets of $ 7.0 million and operating lease liabilities of $ 7.1 million.

As of December 31, 2024, the Company had operating lease ROU assets of $ 7.5 million and operating lease liabilities of $ 7.5 million.

The Company did not have any agreements that are classified as finance leases as of March 31, 2025 or December 31, 2024.

The Company did not have any agreements that are classified as finance leases as of June 30, 2025 or December 31, 2024.

The following table presents additional information about the Company's operating leases for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) 2025 2024 2025 2024

Operating lease cost (1)

$ 761 $ 745 $ 1,469 $ 1,482

Short term lease cost (1)

7 unchanged sentences

(In Thousands) Operating Leases

2025 (Nine months) $ 1,999

2025 (Six months) $ 1,329

Thereafter 3,753

7 unchanged sentences

Similarly, the Company could be required to settle its obligations under the agreement if specific regulatory events occur, such as if the Company were issued a prompt corrective action directive or a cease and desist order, or if certain regulatory ratios fall below specified levels.

The Company pledged $ 584,000 as of March 31, 2025 and $ 579,000 as of December 31, 2024, in available for sale securities to collateralize fair value shortfalls on interest rate swap agreements.

The Company had interest rate swaps related to commercial loans with an aggregate notional amount of $ 321.2 million and $ 309.0 million at March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025, the notional amount of interest rate swaps is made up of 26 variable to fixed rate swaps to commercial loan customers totaling $ 160.6 million, and 26 fixed to variable rate swaps with a counterparty totaling $ 160.6 million.

Changes in fair value from these 26 interest rate swaps offset each other in the three-month periods ending March 31, 2025.

The Company recognized $ 129,000 and $ 63,000 in fee income related to interest rate swaps in the three-month periods ending March 31, 2025 and 2024, respectively.

The Company pledged $ 587,000 as of June 30, 2025 and $ 579,000 as of December 31, 2024, in available for sale securities to collateralize fair value shortfalls on interest rate swap agreements.

The Company had interest rate swaps related to commercial loans with an aggregate notional amount of $ 319.0 million and $ 309.0 million at June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025, the notional amount of interest rate swaps is made up of 26 variable to fixed rate swaps to commercial loan customers totaling $ 159.5 million, and 26 fixed to variable rate swaps with a counterparty totaling $ 159.5 million.

Changes in fair value from these 26 interest rate swaps offset each other in the three-month periods ending June 30, 2025.

The Company recognized zero and $ 10,000 in fee income related to interest rate swaps in the three-month periods ending June 30, 2025 and 2024, respectively, and $ 129,000 and $ 73,000 in fee income related to interest rate swaps in the six-month periods ending June 30, 2025 and 2024, respectively.

Interest rate swap income is recorded in other operating income on the Consolidated Statements of Income .

3 unchanged sentences

The interest rate swap effectively fixes the Company's interest payments on the $ 10.0 million of junior subordinated debentures held under Northrim Statutory Trust 2 at 3.72 % through its maturity date.

The floating rate that the dealer pays was equal to the three month LIBOR plus 1.37 % through September 15, 2023.

The floating rate that the dealer pays is now equal to the three month CME SOFR plus tenor spread adjustment 0.26 % plus 1.37 %, which reprices quarterly on the payment date.

This rate was 5.93 % as of March 31, 2025.

The Company pledged $ 130,000 in cash to collateralize initial margin and fair value exposure of our counterparty on this interest rate swap as of March 31, 2025 and December 31, 2024.

The floating rate that the dealer pays is equal to the three month CME SOFR plus tenor spread adjustment 0.26 % plus 1.37 %, which reprices quarterly on the payment date.

This rate was 5.95 % as of June 30, 2025.

The Company pledged $ 130,000 in cash to collateralize initial margin and fair value exposure of our counterparty on this interest rate swap as of June 30, 2025 and December 31, 2024.

Changes in the fair value of this interest rate swap are reported in other comprehensive income on the Consolidated Statements of Income .

The unrealized gain, net of tax on this interest rate swap was $ 1.1 million as of March 31, 2025 and the unrealized gain, net of tax was $ 1.3 million as of December 31, 2024.

The unrealized gain, net of tax on this interest rate swap was $ 1.0 million as of June 30, 2025 and the unrealized gain, net of tax was $ 1.3 million as of December 31, 2024.

Derivatives related to home mortgage banking activities

4 unchanged sentences

Market risk with respect to commitments to originate loans arises from changes in the value of contractual positions due to changes in interest rates.

Residential Mortgage Holding Company, LLC, the parent company of Residential Mortgage, LLC (collectively “RML”) had commitments to originate mortgage loans held for sale totaling $ 68.3 million and $ 32.3 million at March 31, 2025 and December 31, 2024, respectively.

Residential Mortgage, LLC (“RML”) had commitments to originate mortgage loans held for sale totaling $ 73.2 million and $ 32.3 million at June 30, 2025 and December 31, 2024, respectively.

Changes in the value of RML's interest rate derivatives are recorded in mortgage banking income on the Consolidated Statements of Income .

None of these derivatives are designated as hedging instruments.

The following table presents the fair value of derivatives not designated as hedging instruments at March 31, 2025 and December 31, 2024:

The following table presents the fair value of derivatives not designated as hedging instruments at June 30, 2025 and December 31, 2024:

(In Thousands) Asset Derivatives

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Balance Sheet Location Fair Value Fair Value

4 unchanged sentences

(In Thousands) Liability Derivatives

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Balance Sheet Location Fair Value Fair Value

3 unchanged sentences

The following table presents the net gains (losses) of derivatives not designated as hedging instruments for periods indicated below:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) Income Statement Location 2025 2024 2025 2024

5 unchanged sentences

We do not offset such financial instruments for financial reporting purposes.

The following table summarizes the derivatives that have a right of offset as of March 31, 2025 and December 31, 2024:

March 31, 2025 Gross amounts not offset in the Statement of Financial Position

The following table summarizes the derivatives that have a right of offset as of June 30, 2025 and December 31, 2024:

June 30, 2025 Gross amounts not offset in the Statement of Financial Position

(In Thousands) Gross amounts of recognized assets and liabilities Gross amounts offset in the Statement of Financial Position Net amounts of assets and liabilities presented in the Statement of Financial Position Financial Instruments Collateral Posted Net Amount

26 unchanged sentences

Interest rate contracts are valued in a model, which uses as its basis a discounted cash flow technique incorporating credit valuation adjustments to reflect nonperformance risk in the measurement of fair value.

Although the Company has determined that the

majority of inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.

However, as of March 31, 2025, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its interest rate positions and has determined that they are not significant to the overall valuation of its interest rate derivatives.

Although the Company has determined that the majority of inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation

adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.

However, as of June 30, 2025, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its interest rate positions and has determined that they are not significant to the overall valuation of its interest rate derivatives.

As a result, the Company has classified its interest rate derivative valuations in Level 2 of the fair value hierarchy.

17 unchanged sentences

Estimated fair values as of the periods indicated are as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In Thousands) Carrying Amount Fair Value Carrying Amount Fair Value

24 unchanged sentences

(In Thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

March 31, 2025

June 30, 2025

Available for sale securities

31 unchanged sentences

Total other liabilities $ 13,011 $ — $ 13,011 $ —

The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and three-month periods ended March 31, 2025 and 2024:

(In Thousands) Beginning balance Change included in earnings Purchases and issuances Sales and settlements Ending balance Net change in unrealized gains (losses) relating to items held at end of period

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Interest rate lock commitments $ 1,389 ($ 553 ) $ 4,700 ($ 4,240 ) $ 1,296 $ 1,296

2 unchanged sentences

Total $ 30,520 ($ 1,491 ) $ 6,413 ($ 4,240 ) $ 31,202 $ 1,296

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Interest rate lock commitments $ 765 ($ 453 ) $ 3,416 ($ 2,669 ) $ 1,059 $ 1,059

2 unchanged sentences

Total $ 22,920 ($ 550 ) $ 4,551 ($ 2,669 ) $ 24,252 $ 1,059

There were no changes in unrealized gains and losses for the three-month periods ending March 31, 2025 and 2024 included in other comprehensive income for recurring Level 3 fair value measurements.

As of and for the periods ending March 31, 2025 and December 31, 2024, except for certain assets as shown in the following table, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis.

Six Months Ended June 30, 2025

Interest rate lock commitments $ 465 ($ 779 ) $ 6,696 ($ 5,086 ) $ 1,296 $ 1,296

Mortgage servicing rights 26,439 ( 1,673 ) 2,740 — 27,506 —

Commercial servicing rights 2,194 ( 193 ) 399 — 2,400 —

Total $ 29,098 ($ 2,645 ) $ 9,835 ($ 5,086 ) $ 31,202 $ 1,296

Six Months Ended June 30, 2024

Interest rate lock commitments $ 342 ($ 728 ) $ 5,929 ($ 4,484 ) $ 1,059 $ 1,059

Mortgage servicing rights 19,564 ( 106 ) 1,619 — 21,077 —

Commercial servicing rights 2,200 ( 145 ) 61 — 2,116 —

Total $ 22,106 ($ 979 ) $ 7,609 ($ 4,484 ) $ 24,252 $ 1,059

There were no changes in unrealized gains and losses for the three and six-month periods ending June 30, 2025 and 2024 included in other comprehensive income for recurring Level 3 fair value measurements.

As of and for the periods ending June 30, 2025 and December 31, 2024, except for certain assets as shown in the following table, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis.

For loans individually measured for credit losses, the Company classifies fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in the fair value hierarchy, and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value hierarchy.

(In Thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

March 31, 2025

June 30, 2025

Loans individually measured for credit losses $ — $ — $ — $ —

3 unchanged sentences

Total $ — $ — $ — $ —

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three-month periods ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three and six-month periods ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

(In Thousands) 2025 2024 2025 2024

3 unchanged sentences

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following tables provide a description of the valuation technique, unobservable input, 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 recurring and nonrecurring basis at March 31, 2025 and December 31, 2024:

Financial Instrument Valuation Technique - Recurring Basis

Unobservable Input Weighted Average Rate Range

March 31, 2025

June 30, 2025

Interest rate lock commitment External pricing model Pull through rate 92.63 %

14 unchanged sentences

The Community Banking segment's principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas.

As of March 31, 2025, the Community Banking segment operated 20 branches throughout Alaska.

As of June 30, 2025, the Community Banking segment operated 20 branches throughout Alaska.

The Home Mortgage Lending segment's principal business focus is the origination and sale of mortgage loans for 1-4 family residential properties, mortgage loan servicing for a portion of mortgage loans sold, and investment in certain 1-4 family residential mortgage loans on our balance sheet.

11 unchanged sentences

Summarized financial information for the Company's reportable segments and the reconciliation to the consolidated financial results for the periods presented is shown in the following tables:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

30 unchanged sentences

Net income $ 7,743 $ 1,929 $ 2,106 $ 11,778

March 31, 2025

Three Months Ended June 30, 2025

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

48 unchanged sentences

miscellaneous operating costs related to specialty finance activities.

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

29 unchanged sentences

Net income $ 7,098 $ 1,366 $ 556 $ 9,020

March 31, 2024

Three Months Ended June 30, 2024

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

47 unchanged sentences

miscellaneous operating costs related to specialty finance activities.

March 31, 2025

Six Months Ended June 30, 2025

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

Interest income $ 75,542 $ 9,440 $ 1,378 $ 86,360

Interest expense 17,420 2,887 1,164 21,471

Net interest income 58,122 6,553 214 64,889

Provision (benefit) for credit losses

( 449 ) 332 684 567

Net interest income after provision for credit losses 58,571 6,221 ( 470 ) 64,322

Net realized gains on mortgage loans sold — 6,671 — 6,671

Change in fair value of mortgage loan commitments, net — 550 — 550

Total production revenue — 7,221 — 7,221

Mortgage servicing revenue — 5,653 — 5,653

Change in fair value of mortgage servicing rights:

Due to changes in model inputs of assumptions — ( 677 ) — ( 677 )

Other — ( 996 ) — ( 996 )

Total mortgage servicing revenue, net — 3,980 — 3,980

Other mortgage banking revenue — 450 — 450

Total mortgage banking revenue — 11,651 — 11,651

Purchased receivable income — — 12,047 12,047

Other operating income 5,971 — 11 5,982

Total other operating income 5,971 11,651 12,058 29,680

Salaries and other personnel expense 24,124 10,451 3,502 38,077

Data processing expense 5,630 533 307 6,470

Occupancy expense 2,858 994 141 3,993

Professional and outside services 1,195 514 519 2,228

Marketing expense 1,412 293 9 1,714

Insurance expense 1,722 44 7 1,773

Compensation expense - Sallyport acquisition payments — — 1,200 1,200

Other operating expense 3,404 1,254 546 5,204

Total other operating expense 40,345 14,083 6,231 60,659

Income before provision for income taxes 24,197 3,789 5,357 33,343

Provision for income taxes 5,666 1,056 1,519 8,241

Net income $ 18,531 $ 2,733 $ 3,838 $ 25,102

Six Months Ended June 30, 2025

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

Interest income

$ 75,542 $ 9,440 $ 1,378 $ 86,360

Mortgage banking income - external revenue

— 11,651 — 11,651

Mortgage banking income - intersegment revenues

— 1,356 — 1,356

Purchased receivable income

— — 12,047 12,047

Other operating income

5,971 — 11 5,982

81,513 22,447 13,436 117,396

Reconciliation of revenue

Elimination of intersegment revenues

— ( 1,356 ) — ( 1,356 )

Total consolidated revenues

$ 81,513 $ 21,091 $ 13,436 $ 116,040

Interest expense

17,420 2,887 1,164 21,471

Provision (benefit) for credit losses

( 449 ) 332 684 567

Segment gross profit

64,542 17,872 11,588 94,002

Salaries and other personnel expense $ 24,124 $ 10,451 $ 3,502 $ 38,077

Data processing expense 5,630 533 307 6,470

Occupancy expense 2,858 994 141 3,993

Professional and outside services 1,195 514 519 2,228

Marketing expense 1,412 293 9 1,714

Insurance expense 1,722 44 7 1,773

Compensation expense - Sallyport acquisition payments

— — 1,200 1,200

Intersegment expense

1,356 — — 1,356

Other segment items (2)

3,404 1,254 546 5,204

Segment expense

41,701 14,083 6,231 62,015

Reconciliation of expense

Elimination of intersegment expense

($ 1,356 ) $ — $ — ( 1,356 )

Total consolidated expense

$ 40,345 $ 14,083 $ 6,231 $ 60,659

Income before provision for income taxes

$ 24,197 $ 3,789 $ 5,357 $ 33,343

1 The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

All expenses are allocated to a segment.

2 Other segment items for each reportable segment include:

Community Banking:

OREO (income) expense, net of rental income and gains on sale, director fees, operational charge offs net of recoveries, loan collection and collateral costs, and other miscellaneous operating costs related to community banking activities.

Home Mortgage Lending:

OREO (income) expense, net of rental income and gains on sale related home mortgage loans, director fees related at RML, loan collection and collateral costs related to home mortgage loans, and other miscellaneous operating costs related to home mortgage lending activities.

Specialty Finance:

miscellaneous operating costs related to specialty finance activities.

Six Months Ended June 30, 2024

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

Interest income $ 65,033 $ 7,302 $ 382 $ 72,717

Interest expense 16,500 2,295 422 19,217

Net interest income 48,533 5,007 ( 40 ) 53,500

Provision (benefit) for credit losses

Net interest income after provision for credit losses 48,520 4,991 ( 40 ) 53,471

Net realized gains on mortgage loans sold — 5,168 — 5,168

Change in fair value of mortgage loan commitments, net — 777 — 777

Total production revenue — 5,945 — 5,945

Mortgage servicing revenue — 3,725 — 3,725

Change in fair value of mortgage servicing rights:

Due to changes in model inputs of assumptions — 528 — 528

Other — ( 634 ) — ( 634 )

Total mortgage servicing revenue, net — 3,619 — 3,619

Other mortgage banking revenue — 351 — 351

Total mortgage banking revenue — 9,915 — 9,915

Purchased receivable income — — 2,587 2,587

Other operating income 4,919 — — 4,919

Total other operating income 4,919 9,915 2,587 17,421

Salaries and other personnel expense 21,837 9,643 564 32,044

Data processing expense 4,793 448 19 5,260

Occupancy expense 2,795 947 63 3,805

Professional and outside services 1,058 384 39 1,481

Marketing expense 951 246 6 1,203

Insurance expense 1,413 58 — 1,471

Other operating expense 2,400 1,057 111 3,568

Total other operating expense 35,247 12,783 802 48,832

Income before provision for income taxes 18,192 2,123 1,745 22,060

Provision for income taxes 3,752 595 494 4,841

Net income $ 14,440 $ 1,528 $ 1,251 $ 17,219

Six Months Ended June 30, 2024

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

Interest income

$ 65,033 $ 7,302 $ 382 $ 72,717

Mortgage banking income - external revenue

— 9,915 — 9,915

Mortgage banking income - intersegment revenues

— 1,531 — 1,531

Purchased receivable income

— — 2,587 2,587

Other operating income

4,919 — — 4,919

69,952 18,748 2,969 91,669

Reconciliation of revenue

Elimination of intersegment revenues

— ( 1,531 ) — ( 1,531 )

Total consolidated revenues

$ 69,952 $ 17,217 $ 2,969 $ 90,138

Interest expense

16,500 2,295 422 19,217

Provision (benefit) for credit losses

Segment gross profit

53,439 14,906 2,547 70,892

Salaries and other personnel expense $ 21,837 $ 9,643 $ 564 $ 32,044

Data processing expense 4,793 448 19 5,260

Occupancy expense 2,795 947 63 3,805

Professional and outside services 1,058 384 39 1,481

Marketing expense 951 246 6 1,203

Insurance expense 1,413 58 — 1,471

Intersegment expense

1,531 — — 1,531

Other segment items (2)

2,400 1,057 111 3,568

Segment expense

36,778 12,783 802 50,363

Reconciliation of expense

Elimination of intersegment expense

($ 1,531 ) $ — $ — ( 1,531 )

Total consolidated expense

$ 35,247 $ 12,783 $ 802 $ 48,832

Income before provision for income taxes

$ 18,192 $ 2,123 $ 1,745 $ 22,060

1 The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

All expenses are allocated to a segment.

2 Other segment items for each reportable segment include:

Community Banking:

Home Mortgage Lending:

Specialty Finance:

miscellaneous operating costs related to specialty finance activities.

June 30, 2025

(In Thousands) Community Banking Home Mortgage Lending Specialty Finance Consolidated

Total assets $ 2,718,030 $ 355,350 $ 170,380 $ 3,243,760

11 unchanged sentences

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What changed 10-Q

Item 1. Financial Statements