What changed in this filing

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Item 1. Financial Statements

2026-07-31 compared with 2026-05-01 · 398 added, 152 removed, 1172 unchanged (32% of the section changed)

36 unchanged sentences

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

Common stock, $ 0.25 par value, 40,000,000 shares authorized, 22,244,766 and 22,111,637 issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Common stock, $ 0.25 par value, 40,000,000 shares authorized, 22,244,766 and 22,111,637 issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital 10,757 10,822

Retained earnings 331,394 309,575

Accumulated other comprehensive income, net of tax

Accumulated other comprehensive (loss) income, net of tax ( 98 ) 619

Total shareholders' equity 347,614 326,544

3 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) 2026 2025 2026 2025

13 unchanged sentences

Net Interest Income 37,136 33,592 71,797 64,889

Provision (benefit) for credit losses

960 ( 1,409 )

Net Interest Income After Provision (Benefit) for Credit Losses

33,701 32,706

Provision for credit losses 1,627 1,976 2,587 567

Net Interest Income After Provision for Credit Losses 35,509 31,616 69,210 64,322

Other Operating Income

3 unchanged sentences

Service charges on deposit accounts 912 726 1,723 1,403

Unrealized (loss) on marketable equity securities

( 256 ) ( 50 )

Unrealized gain (loss) on marketable equity securities 164 78 ( 92 ) 28

Other income 721 1,386 1,363 2,324

7 unchanged sentences

Compensation expense - Sallyport acquisition payments

500 600 1,000 1,200

Insurance expense 432 756 836 1,773

14 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Ended March 31,

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

(In Thousands) 2026 2025 2026 2025

6 unchanged sentences

Unrealized holding gains (losses) arising during the period

68 ( 99 ) 74 ( 343 )

Foreign currency translation income

59 unchanged sentences

Balance as of March 31, 2026 22,245 $ 5,561 $ 10,363 $ 319,660 $ 225 $ 335,809

Cash dividend on common stock ($ 0.16 per share)

— — — ( 3,608 ) — ( 3,608 )

Stock-based compensation expense — — 394 — — 394

Exercise of stock options and vesting of restricted stock units, net — — — — — —

Repurchase of common stock — — — — — —

Other comprehensive loss, net of tax — — — — ( 323 ) ( 323 )

Net income — — — 15,342 — 15,342

Balance as of June 30, 2026 22,245 $ 5,561 $ 10,757 $ 331,394 ($ 98 ) $ 347,614

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) 2026 2025

5 unchanged sentences

Amortization of investment security premium, net of discount accretion ( 251 ) 55

Unrealized loss on marketable equity securities

Deferred tax (benefit) expense 1,729 —

Unrealized (gain) loss on marketable equity securities 92 ( 28 )

Deferred tax expense 1,729 —

Stock-based compensation 704 559

5 unchanged sentences

Change in fair value of loans held for sale

( 487 ) ( 60 )

Gain on sale of loans ( 8,405 ) ( 6,671 )

14 unchanged sentences

Purchases of investment securities held to maturity ( 15,000 ) —

Proceeds from sales/calls/maturities of securities available for sale 56,693 34,631

Proceeds from sales/calls/maturities of securities held to maturity 10,000 —

Proceeds from calls/maturities of securities available for sale 135,455 80,433

Proceeds from calls/maturities of securities held to maturity 10,000 —

Proceeds from redemption of FHLB stock 354 18,576

9 unchanged sentences

105,759 128,981

Decrease in borrowings

( 112 ) ( 9,909 )

(Decrease) increase in borrowings ( 224 ) 39,981

Proceeds from the issuance of common stock 483 ( 1 )

24 unchanged sentences

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

Operating results for the interim period ended March 31, 2026 are not necessarily indicative of the results anticipated for the year ending December 31, 2026.

Operating results for the interim period ended June 30, 2026 are not necessarily indicative of the results anticipated for the year ending December 31, 2026.

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, 2025.

6 unchanged sentences

Interest expense related to subordinated debt includes cash interest and the amortization of debt issuance costs and is recognized in interest expense in the consolidated statements of income.

Stock Incentive Plans:

In May of 2026, the Company's shareholders approved an amendment to the 2025 Stock Incentive Plan to add non-employee directors of the Company to the class of eligible participants who may be issued awards under the 2025 Plan.

Common Stock Split

1 unchanged sentence

All share, equity award and per share amounts presented throughout this Quarterly Report of Form 10-Q have been retrospectively adjusted to reflect the common stock split.

Reclassification of Prior Period Presentation

Certain prior year amounts have been reclassified for consistency with the current period presentation.

These reclassifications had no effect on the reported results of operations or total shareholders' equity.

Recent Accounting Pronouncements

1 unchanged sentence

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”).

This updated mandates that public business entities provide detailed disclosures in the notes to the financial statements, breaking down specific expense categories such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities included in each relevant expense cation.

The objective is to enhance transparency, enabling investors to gain a clearer understanding of the nature and impact of these expenses on the Company's financial performance.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and may be applied on a prospective or retrospective basis.

The Company intends to adopt ASU 2024-03 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 2024-03 retrospectively and does not currently expect the adoption to have a material impact on the Company's consolidated financial statements.

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

8 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2025‑08 but does not expect the adoption to have a material effect on its consolidated financial statements.

The Company is currently evaluating the impact of ASU 2025‑08, including the accounting for loans acquired in future business combinations or loan portfolio acquisitions.

In November 2025, FASB issued ASU 2025‑09, Derivatives and Hedging (Topic 815):

1 unchanged sentence

The amendments in ASU 2025‑09 clarify and expand certain aspects of hedge accounting to better align financial reporting with the economics of an entity’s risk‑management activities.

The ASU addresses stakeholder feedback following the implementation of prior hedge accounting guidance and issues arising from the global transition away from LIBOR.

ASU 2025-09 addresses stakeholder feedback following the implementation of prior hedge accounting guidance and issues arising from the global transition away from LIBOR.

The amendments include targeted improvements across several areas of hedge accounting.

3 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2025‑09 and does not expect the adoption to have a material effect on its consolidated financial statements.

The Company is currently evaluating the impact of ASU 2025‑09 and does not currently expect the adoption to have a material impact on the Company's consolidated financial statements.

In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270):

4 unchanged sentences

The amendments also introduce a comprehensive list of required interim disclosures drawn from various Codification topics and clarify the presentation requirements for interim financial statements, including condensed financial statements and accompanying footnotes.

Importantly, the ASU does not change the fundamental nature of interim reporting nor expand or reduce existing disclosure requirements;

Importantly, ASU 2025-11 does not change the fundamental nature of interim reporting nor expand or reduce existing disclosure requirements;

rather, it improves clarity and consistency across entities that issue interim financial statements in accordance with generally accepted accounting principles.

1 unchanged sentence

Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of ASU 2025‑11 and does not expect the adoption to have a material effect on its consolidated financial statements.

The Company is currently evaluating the impact of ASU 2025‑11 and does not currently expect the adoption to have a material impact on the Company's consolidated financial statements.

In December 2025, the FASB issued ASU 2025‑12, Codification Improvements (“ASU 2025‑12”).

6 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2025‑12 and does not expect the adoption to have a material effect on its consolidated financial statements.

The Company is currently evaluating the impact of ASU 2025‑12 and does not currently expect the adoption to have a material impact on the Company's consolidated financial statements.

Investment Securities

Marketable Equity Securities

The Company held marketable equity securities with fair values of $ 10.1 million at March 31, 2026 and $ 8.4 million at December 31, 2025, respectively.

The Company held marketable equity securities with fair values of $ 11.3 million at June 30, 2026 and $ 8.4 million at December 31, 2025, respectively.

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) 2026 2025 2026 2025

Unrealized (loss) on marketable equity securities

($ 256 ) ($ 50 )

Unrealized gain (loss) on marketable equity securities $ 164 $ 78 ($ 92 ) $ 28

Total $ 164 $ 78 ($ 92 ) $ 28

3 unchanged sentences

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

March 31, 2026

June 30, 2026

Securities available for sale

5 unchanged sentences

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

March 31, 2026

June 30, 2026

Securities held to maturity

16 unchanged sentences

$ 26,750 $ 426 ($ 578 ) $ — $ 26,598

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, 2026 and December 31, 2025 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, 2026 and December 31, 2025 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, 2026

June 30, 2026

Securities available for sale

18 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, 2026, the Company had 16 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 22 available for sale securities without an ACL with unrealized losses at March 31, 2026 that have been in a loss position for more than twelve months.

At March 31, 2026, 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.

There was one held to maturity security without an ACL with an unrealized loss at March 31, 2026 that had been in a loss position for less than twelve months.

At June 30, 2026, the Company had 27 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 15 available for sale securities without an ACL with unrealized losses at June 30, 2026 that have been in a loss position for more than twelve months.

At June 30, 2026, 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.

There were two held to maturity securities without an ACL with an unrealized loss at June 30, 2026 that had been in a loss position for less 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, 2026, 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, 2026 and December 31, 2025, carrying amounts of $ 214.9 million and $ 210.3 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, 2026, are distributed by contractual maturity as shown below.

Accordingly, as of June 30, 2026, 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, 2026 and December 31, 2025, carrying amounts of $ 244.5 million and $ 210.3 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, 2026, 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

March 31, 2026

June 30, 2026

Treasury and government sponsored entities

1 unchanged sentence

1-5 years 229,988 229,113

5-10 years 9,739 9,882

Total $ 381,603 $ 379,789

10 unchanged sentences

Total $ 25,249 $ 25,238

There were no proceeds from sales of investment securities for the three-month periods ending March 31, 2026 and 2025.

A summary of interest income for the three-month periods ending March 31, 2026 and 2025, 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, 2026 and 2025.

A summary of interest income for the three and six-month periods ending June 30, 2026 and 2025, on available for sale investment securities are as follows:

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

(In Thousands) 2026 2025 2026 2025

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, 2026 and December 31, 2025.

Loans held for sale are comprised entirely of 1-4 family residential mortgage loans as of June 30, 2026 and December 31, 2025.

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 CECL methodology to assess credit risk, for the periods indicated:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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

15 unchanged sentences

Net loans $ 2,360,867 $ 2,396,240 ($ 9,912 ) $ 2,271,762 $ 2,305,663 ($ 10,164 )

The difference between the amortized cost and unpaid principal balance is net deferred origination fees totaling $ 9.6 million at March 31, 2026 and $ 10.2 million at December 31, 2025.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 11.1 million and $ 9.6 million at March 31, 2026 and December 31, 2025, 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 $ 9.9 million at June 30, 2026 and $ 10.2 million at December 31, 2025.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 11.0 million and $ 9.6 million at June 30, 2026 and December 31, 2025, 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 $ 20,922 $ 1,803 ($ 155 ) $ 15 $ 22,585

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

(In Thousands)

Commercial & industrial loans $ 6,707 ($ 229 ) ($ 314 ) $ 64 $ 6,228

Commercial real estate:

Owner occupied properties 2,207 416 — — 2,623

Non-owner occupied and multifamily properties 4,440 746 ( 78 ) — 5,108

Residential real estate:

1-4 family residential properties secured by first liens 5,712 785 — — 6,497

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens 1,041 261 — 6 1,308

1-4 family residential construction loans 324 ( 165 ) — — 159

Other construction, land development and raw land loans 2,839 9 — — 2,848

Obligations of states and political subdivisions in the US 143 41 — — 184

Agricultural production, including commercial fishing 202 37 — 1 240

Consumer loans 114 10 ( 2 ) — 122

Other loans 8 136 — — 144

Total $ 23,737 $ 2,047 ($ 394 ) $ 71 $ 25,461

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

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) 2026 2025 2024 2023 2022 Prior Total

29 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, 2026 2026 2025 2024 2023 2022 Prior Total

June 30, 2026 2026 2025 2024 2023 2022 Prior Total

(In Thousands)

116 unchanged sentences

Due Current Total Greater Than 90 Days Past Due Still Accruing

March 31, 2026

June 30, 2026

Commercial & industrial loans $ 19 $ — $ 451 $ 470 $ 470,745 $ 471,215 $ —

38 unchanged sentences

Nonaccrual loans:

Nonaccrual loans net of government guarantees totaled $ 14.2 million and $ 12.0 million at March 31, 2026 and December 31, 2025, respectively.

Nonaccrual loans net of government guarantees totaled $ 21.8 million and $ 12.0 million at June 30, 2026 and December 31, 2025, 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, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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

10 unchanged sentences

Net nonaccrual loans $ 21,811 $ 18,110 $ 1,339 $ 11,968 $ 6,392 $ 1,395

There was no interest on nonaccrual loans reversed through interest income during the three-month periods ending March 31, 2026 or March 31, 2025.

There was no interest earned on nonaccrual loans with a principal balance during the three -month periods ending March 31, 2026 and March 31, 2025.

However, the Company recognized interest income of $ 68,000 and $ 42,000 in the three-month periods ending March 31, 2026 and 2025, respectively, related to interest collected on nonaccrual loans whose principal had been paid down to zero.

There was $ 468,000 interest on nonaccrual loans reversed through interest income during the three and six-month periods ending June 30, 2026 and no interest on nonaccrual loans reversed through interest income during the three and six-month periods ending June 30, 2025.

There was no interest earned on nonaccrual loans with a principal balance during the three and six -month periods ending June 30, 2026 and June 30, 2025.

However, the Company recognized interest income of $ 170,000 and $ 45,000 in the three-month periods ending June 30, 2026 and 2025, respectively, and $ 238,000 and $ 87,000 in the six-month periods ending June 30, 2026 and 2025, 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, 2026

Three Months Ended June 30, 2026

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

(In Thousands)

Commercial real estate:

Non-owner occupied and multifamily properties $ — $ 1,057 $ 1,057 0.14 %

Total $ — $ 1,057 $ 1,057 0.04 %

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, 2025

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

Six Months Ended June 30, 2026

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

(In Thousands)

Commercial real estate:

Non-owner occupied and multifamily properties $ — $ 1,057 $ 1,057 0.14 %

Total $ — $ 1,057 $ 1,057 0.04 %

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 %

2 unchanged sentences

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, 2026

Three Months Ended June 30, 2026

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

1 unchanged sentence

Commercial real estate:

Owner occupied properties $ — — % 0

Three Months Ended March 31, 2025

Non-owner occupied and multifamily properties — 2 % 0

Three Months Ended June 30, 2025

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

1 unchanged sentence

Commercial real estate:

Owner occupied properties $ — — % 33

Non-owner occupied and multifamily properties — — % 0

Six Months Ended June 30, 2026

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

(In Thousands)

Commercial real estate:

Non-owner occupied and multifamily properties $ — 2 % 0

Six Months Ended June 30, 2025

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

(In Thousands)

Commercial & industrial loans $ — — % 33

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

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

(In Thousands) March 31, 2026 December 31, 2025

(In Thousands) June 30, 2026 December 31, 2025

Commercial & industrial loans $ 208 $ 142

7 unchanged sentences

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

Three Months Ended March 31, 2026

Term modification Term and payment modification

Three Months Ended June 30, 2026 Six Months Ended June 30, 2026

Term modification Term and payment modification Term modification Term and payment modification

(In Thousands)

5 unchanged sentences

Total $ 1,748 $ — $ 1,748 $ 703

Three Months Ended March 31, 2025

Term modification

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

Term and payment modification Term and payment modification

(In Thousands)

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens $ —

Commercial real estate:

Owner occupied properties $ — $ 3,252

Total $ — $ 3,252

The Company monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

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, 2026

June 30, 2026

Greater Than 89 Days Past Due Total Past Due Current

7 unchanged sentences

Total $ 1,748 $ 1,748 $ 4,393 $ 6,141

March 31, 2025

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

June 30, 2025

Greater Than 89 Days Past Due Total Past Due Current Total

(In Thousands)

11 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 no nonperforming purchased receivables as of March 31, 2026 and there was one nonperforming purchased receivable with a balance of $ 67,000 as of December 31, 2025 for which management was not accruing income.

There were no nonperforming purchased receivables as of June 30, 2026 and there was one nonperforming purchased receivable with a balance of $ 67,000 as of December 31, 2025 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, 2026 December 31, 2025

(In Thousands) June 30, 2026 December 31, 2025

Purchased receivables $ 123,402 $ 101,642

2 unchanged sentences

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

Three Months Ended March 31,

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

(In Thousands) 2026 2025 2026 2025

3 unchanged sentences

Charge-offs net of recoveries — ( 281 ) 5 ( 281 )

(Benefit) / provision for purchased receivables ( 5 ) 46

Foreign currency translation adjustment ( 15 ) — ( 15 ) —

Provision for purchased receivables 625 18 620 64

Balance at end of period $ 610 $ 3,432 $ 610 $ 3,432

1 unchanged sentence

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, 2026 and 2025:

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, 2026 and 2025:

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

(In Thousands) 2026 2025 2026 2025

4 unchanged sentences

( 366 ) ( 355 ) 97 ( 677 )

( 562 ) ( 463 ) ( 1,152 ) ( 996 )

Balance, end of period $ 28,475 $ 27,506 $ 28,475 $ 27,506

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, 2026 and December 31, 2025:

(In Thousands) March 31, 2026 December 31, 2025

The following table details information related to our serviced mortgage loan portfolio as of June 30, 2026 and December 31, 2025:

(In Thousands) June 30, 2026 December 31, 2025

Balance of mortgage loans serviced for others $ 1,659,395 $ 1,629,528

2 unchanged sentences

MSR as a percentage of serviced loans 1.72 % 1.69 %

The Company recognized servicing fees of $ 1.6 million and $ 1.5 million during the three-month periods ending March 31, 2026 and 2025, 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 $ 1.6 million and $ 1.4 million during the three-month periods ending June 30, 2026 and 2025, respectively, and $ 3.2 million and $ 2.9 million during the six -month periods ended June 30, 2026 and 2025, 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, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Fair value of MSRs

25 unchanged sentences

Commercial servicing rights

The commercial servicing rights asset (“CSR”) has a carrying value of $ 2.4 million at March 31, 2026 and $ 2.3 million at December 31, 2025, 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 $ 298.4 million and $ 296.2 million at March 31, 2026 and December 31, 2025, respectively.

Key assumptions used in measuring the fair value of the CSR as of March 31, 2026 and December 31, 2025 include a constant prepayment rate of 11.71 % and a discount rate of 12.00 %.

The commercial servicing rights asset (“CSR”) has a carrying value of $ 2.2 million at June 30, 2026 and $ 2.3 million at December 31, 2025, 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 $ 280.2 million and $ 296.2 million at June 30, 2026 and December 31, 2025, respectively.

Key assumptions used in measuring the fair value of the CSR as of June 30, 2026 and December 31, 2025 include a constant prepayment rate of 11.71 % 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, 2026, the Company has operating lease ROU assets of $ 11.7 million and operating lease liabilities of $ 11.9 million.

As of June 30, 2026, the Company has operating lease ROU assets of $ 11.3 million and operating lease liabilities of $ 11.5 million.

As of December 31, 2025, the Company had operating lease ROU assets of $ 5.9 million and operating lease liabilities of $ 5.9 million.

The Company did not have any agreements that are classified as finance leases as of March 31, 2026 or December 31, 2025.

The Company entered into a new seven year lease for the headquarters building for Residential Mortgage in the first quarter of 2026.

The Company did not have any agreements that are classified as finance leases as of June 30, 2026 or December 31, 2025.

The Company entered into a new seven year lease for the headquarters building for Residential Mortgage, LLC (“RML”) in the first quarter of 2026.

Upon commencement, the operating lease ROU assets increased $ 6.3 million and the operating lease liabilities increased $ 6.4 million.

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) 2026 2025 2026 2025

Operating lease cost (1)

$ 615 $ 761 $ 1,337 $ 1,469

Short term lease cost (1)

73 78 143 164

Total lease cost $ 688 $ 839 $ 1,480 $ 1,633

6 unchanged sentences

(In Thousands) Operating Leases

2026 (Nine months) $ 1,605

2026 (Six months) $ 1,152

Thereafter 5,834

8 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 $ 598,000 as of March 31, 2026 and $ 596,000 as of December 31, 2025, in available for sale securities to collateralize fair value shortfalls on interest rate swap agreements.

At March 31, 2026, the notional amount of interest rate swaps is made up of 27 variable to fixed rate swaps to commercial loan customers totaling $ 178.0 million with a fair value of negative $ 8.1 million and 27 fixed to variable rate swaps with a counterparty totaling $ 178.0 million with a fair value of $ 8.1 million.

Changes in fair value from these 27 interest rate swaps offset each other in the three-month periods ending March 31, 2026.

The Company recognized zero and $ 129,000 in fee income related to interest rate swaps in the three-month periods ending March 31, 2026 and 2025, respectively.

The Company pledged $ 609,000 as of June 30, 2026 and $ 596,000 as of December 31, 2025, in available for sale securities to collateralize fair value shortfalls on interest rate swap agreements.

At June 30, 2026, the notional amount of interest rate swaps is made up of 27 variable to fixed rate swaps to commercial loan customers totaling $ 176.7 million with a fair value of negative $ 8.8 million and 27 fixed to variable rate swaps with a counterparty totaling $ 176.7 million with a fair value of $ 8.8 million.

Changes in fair value from these 27 interest rate swaps offset each other in the three and six -month periods ending June 30, 2026.

The Company recognized no fee income related to interest rate swaps in the three-month periods ending June 30, 2026 and 2025, respectively, and zero and $ 129,000 in fee income related to interest rate swaps in the six -month periods ending June 30, 2026 and 2025, respectively.

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

2 unchanged sentences

The Company has designated this interest rate swap as a hedging instrument.

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 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 (“Trust 2”) at 3.72 % through its maturity date.

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 5.31 % as of March 31, 2026.

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, 2026 and December 31, 2025.

The fair value of this interest rate swap was $ 1.4 million as of both March 31, 2026 and December 31, 2025, which is included in other assets on the Consolidated Balance Sheet.

This rate was 5.30 % as of June 30, 2026.

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, 2026 and December 31, 2025.

The fair value of this interest rate swap was $ 1.5 million as of both June 30, 2026 and December 31, 2025, which is included in other assets on the Consolidated Balance Sheet.

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 $ 1.0 million as of March 31, 2026 and December 31, 2025.

The unrealized gain, net of tax on this interest rate swap was $ 1.1 million as of June 30, 2026 and December 31, 2025.

Derivatives related to home mortgage banking activities:

5 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, LLC (“RML”) had commitments to originate mortgage loans held for sale totaling $ 85.8 million and $ 45.7 million at March 31, 2026 and December 31, 2025, respectively.

The fair value of these interest rate lock commitments was $ 1.6 million and $ 923,000 at March 31, 2026 and December 31, 2025, respectively.

RML had commitments to originate mortgage loans held for sale totaling $ 87.0 million and $ 45.7 million at June 30, 2026 and December 31, 2025, respectively.

The fair value of these interest rate lock commitments was $ 1.5 million and $ 923,000 at June 30, 2026 and December 31, 2025, 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, 2026 and December 31, 2025:

The following table presents the fair value of derivatives not designated as hedging instruments at June 30, 2026 and December 31, 2025:

(In Thousands) Asset Derivatives

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Balance Sheet Location Fair Value Fair Value

1 unchanged sentence

Interest rate lock commitments Other assets 1,519 923

Retail interest rate contracts Other assets 58 —

Total $ 10,273 $ 8,922

(In Thousands) Liability Derivatives

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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 2026 2025 2026 2025

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, 2026 and December 31, 2025:

March 31, 2026 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, 2026 and December 31, 2025:

June 30, 2026 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

1 unchanged sentence

Interest rate swaps $ 8,754 $ — $ 8,754 $ — $ — $ 8,754

Retail interest rate contracts 58 — 58 — — 58

Liability Derivatives

Interest rate swaps $ 8,754 $ — $ 8,754 $ — $ 8,754 $ —

Retail interest rate contracts 76 — 76 — — 76

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

7 unchanged sentences

Junior Subordinated Debentures

In December of 2005, the Company formed a wholly-owned Connecticut statutory business trust subsidiary, Northrim Statutory Trust 2 (the “Trust 2”), which issued $ 10 million of guaranteed undivided beneficial interests in the Company’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities 2”).

In December of 2005, the Company formed a wholly-owned Connecticut statutory business trust subsidiary, Trust 2, which issued $ 10 million of guaranteed undivided beneficial interests in the Company’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities 2”).

These debentures qualify as Tier 1 capital under Federal Reserve Board guidelines.

4 unchanged sentences

The debentures, which represent the sole asset of Trust 2, accrue and pay distributions quarterly at a variable rate of 90-day CME SOFR plus tenor spread adjustment 0.26 % plus 1.37 % per annum, adjusted quarterly, of the stated liquidation value of $ 1,000 per capital security as of December 31, 2024.

The interest rate on these debentures was 5.31 % at March 31, 2026 compared to 5.35 % at December 31, 2025.

The interest cost to the Company on these debentures was $ 138,000 and $ 154,000 in the first quarters of 2026, and 2025, respectively.

The interest rate on these debentures was 5.30 % at June 30, 2026 compared to 5.35 % at December 31, 2025.

The interest cost to the Company on these debentures was $ 138,000 and $ 155,000 in the second quarters of 2026 and 2025, respectively, and $ 276,000 and $ 309,000 in the first six months of 2026 and 2025, respectively.

The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of:

5 unchanged sentences

As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest.

Subordinated Debentures

Subordinated Notes

In November of 2025, the Company issued and sold $ 60.0 million in aggregate principal amount of its 6.875 % Fixed-to-Floating Rate Subordinated Notes due 2035 (the “Subordinated Notes”).

3 unchanged sentences

As provided in the Subordinated Notes, the interest rate on the Subordinated Notes during the applicable floating rate period may be determined based on a rate other than three-month term SOFR.

The interest cost to the Company on these debentures was $ 1.0 million in the first quarter of 2026.

The interest cost to the Company on these debentures was $ 1.0 million in the second quarter of 2026 and $ 2.1 million in the first six months of 2026.

The Company incurred debt issuance costs of $ 1.4 million which will amortize through December 1, 2035.

The amortization expense amounted to $ 35,000 in the first quarter of 2026.

The amortization expense amounted to $ 35,000 in the second quarter of 2026 and $ 70,000 in the first six months of 2026.

Prior to December 1, 2030, the Company may redeem the Subordinated Notes, in whole but not in part, only under certain limited circumstances set forth in the indenture governing the Subordinated Notes.

26 unchanged sentences

Although the Company has determined that the majority of inputs used to value its retail interest rate contracts 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, 2026, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its retail interest rate contracts and has determined that they are not significant to the overall valuation.

However, as of June 30, 2026, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its retail interest rate contracts and has determined that they are not significant to the overall valuation.

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

17 unchanged sentences

Estimated fair values as of the periods indicated, whether or not recognized or recorded at fair value on a recurring basis in the Consolidated Balance Sheets, are as follows:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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

10 unchanged sentences

1,510 1,510 1,437 1,437

Retail interest rate contracts

Level 3 inputs:

18 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, 2026

June 30, 2026

Available for sale securities

12 unchanged sentences

Commercial servicing rights 2,215 — — 2,215

Retail interest rate contracts 58 — 58 —

Total other assets $ 125,745 $ — $ 93,536 $ 32,209

Interest rate swaps $ 8,754 $ — $ 8,754 $ —

Retail interest rate contracts 76 — 76 —

Total other liabilities $ 8,830 $ — $ 8,830 $ —

18 unchanged sentences

Total other liabilities $ 8,049 $ — $ 8,049 $ —

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-month periods ended March 31, 2026 and 2025:

(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, 2026

Three Months Ended June 30, 2026

Interest rate lock commitments $ 1,580 ($ 646 ) $ 5,338 ($ 4,753 ) $ 1,519 $ 1,519

2 unchanged sentences

Total $ 32,365 ($ 1,733 ) $ 6,330 ($ 4,753 ) $ 32,209 $ 1,519

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

There were no changes in unrealized gains and losses for the three-month periods ending March 31, 2026 and 2025 included in other comprehensive income for recurring Level 3 fair value measurements and there were no transfers between levels during the three-month periods ending March 31, 2026 and 2025.

As of and for the periods ending March 31, 2026 and December 31, 2025, 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, 2026

Interest rate lock commitments $ 923 ($ 1,175 ) $ 9,593 ($ 7,822 ) $ 1,519 $ 1,519

Mortgage servicing rights 27,474 ( 1,055 ) 2,056 — 28,475 —

Commercial servicing rights 2,342 ( 161 ) 34 — 2,215 —

Total $ 30,739 ($ 2,391 ) $ 11,683 ($ 7,822 ) $ 32,209 $ 1,519

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

There were no changes in unrealized gains and losses for the three and six -month periods ending June 30, 2026 and 2025 included in other comprehensive income for recurring Level 3 fair value measurements and there were no transfers between levels during the three and six -month periods ending June 30, 2026 and 2025.

As of and for the periods ending June 30, 2026 and December 31, 2025, 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, 2026

June 30, 2026

Loans individually measured for credit losses $ 851 $ — $ — $ 851

3 unchanged sentences

Total $ 2,729 $ — $ — $ 2,729

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three-month periods ended March 31, 2026 and 2025:

Three Months Ended March 31, Three Months Ended March 31,

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the six-month periods ended June 30, 2026 and 2025:

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

(In Thousands) 2026 2025 2026 2025

2 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, 2026 and December 31, 2025:

Financial Instrument Valuation Technique - Recurring Basis

Unobservable Input Weighted Average Rate Range

March 31, 2026

Unobservable Input Range of Inputs Weighted Average

June 30, 2026

Interest rate lock commitment External pricing model Pull through rate 81.32 % - 100.00 %

9 unchanged sentences

Discount rate 12.00 % 12.00 %

Financial Instrument Valuation Technique - Nonrecurring Basis Unobservable Input Weighted Average Rate Range

March 31, 2026

Financial Instrument Valuation Technique - Nonrecurring Basis Unobservable Input Range of Inputs Weighted Average

June 30, 2026

Loans individually measured for credit losses Discounted cash flow Discount rate 10.00 %

6 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, 2026, the Community Banking segment operated 20 branches throughout Alaska.

As of June 30, 2026, the Community Banking segment operated 21 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, 2026

Three Months Ended June 30, 2026

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

2 unchanged sentences

Net interest income 33,236 3,474 426 37,136

Provision (benefit) for credit losses

153 562 245 960

Provision for credit losses 503 279 845 1,627

Net interest income after provision for credit losses 32,733 3,195 ( 419 ) 35,509

8 unchanged sentences

Other mortgage banking revenue — 292 — 292

Total mortgage banking revenue — 6,461 — 6,461

Total mortgage banking income — 7,138 — 7,138

Purchased receivable income — — 6,473 6,473

13 unchanged sentences

Net income $ 11,745 $ 1,607 $ 1,990 $ 15,342

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

16 unchanged sentences

7,888 1,460 670 10,018

Provision (benefit) for credit losses

Provision for credit losses 503 279 845 1,627

Segment gross profit

35,830 10,333 6,083 52,246

Salaries and other personnel expense $ 12,418 $ 6,399 $ 1,967 $ 20,784

Data processing expense 2,977 299 206 3,482

Occupancy expense 1,384 372 69 1,825

Professional and outside services 935 258 235 1,428

Marketing expense 640 40 6 686

Insurance expense 417 15 — 432

Compensation expense - Sallyport acquisition payments

Intersegment expense

Other segment items (2)

1,663 739 483 2,885

Segment expense

21,358 8,122 3,466 32,946

Reconciliation of expense

Elimination of intersegment expense

($ 924 ) $ — $ — ( 924 )

Total consolidated expense

$ 20,434 $ 8,122 $ 3,466 $ 32,022

Income before provision for income taxes

$ 15,396 $ 2,211 $ 2,617 $ 20,224

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.

Three Months Ended June 30, 2025

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

Interest income $ 38,969 $ 5,048 $ 782 $ 44,799

Interest expense 8,998 1,541 668 11,207

Net interest income 29,971 3,507 114 33,592

Provision for credit losses 1,319 639 18 1,976

Net interest income after provision for credit losses 28,652 2,868 96 31,616

Net realized gains on mortgage loans sold — 5,091 — 5,091

Change in fair value of mortgage loan commitments, net — ( 110 ) — ( 110 )

Total production revenue — 4,981 — 4,981

Mortgage servicing revenue — 2,957 — 2,957

Change in fair value of mortgage servicing rights:

Due to changes in model inputs of assumptions — ( 355 ) — ( 355 )

Other — ( 463 ) — ( 463 )

Total mortgage servicing revenue, net — 2,139 — 2,139

Other mortgage banking revenue — 280 — 280

Total mortgage banking income — 7,400 — 7,400

Purchased receivable income — — 5,897 5,897

Other operating income 3,268 — 75 3,343

Total other operating income 3,268 7,400 5,972 16,640

Salaries and other personnel expense 13,360 5,682 1,812 20,854

Data processing expense 2,960 270 136 3,366

Occupancy expense 1,476 556 72 2,104

Professional and outside services 634 258 221 1,113

Marketing expense 894 142 6 1,042

Insurance expense 734 21 1 756

Compensation expense - Sallyport acquisition payments

Other operating expense 1,706 664 283 2,653

Total other operating expense 21,764 7,593 3,131 32,488

Income before provision for income taxes 10,156 2,675 2,937 15,768

Provision (benefit) for income taxes 2,413 746 831 3,990

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

Three Months Ended June 30, 2025

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

Interest income

$ 38,969 $ 5,048 $ 782 $ 44,799

Mortgage banking income - external revenue

— 7,400 — 7,400

Mortgage banking income - intersegment revenues

Purchased receivable income

— — 5,897 5,897

Other operating income

3,268 — 75 3,343

42,237 13,362 6,754 62,353

Reconciliation of revenue

Elimination of intersegment revenues

— ( 914 ) — ( 914 )

Total consolidated revenues

$ 42,237 $ 12,448 $ 6,754 $ 61,439

Interest expense

8,998 1,541 668 11,207

Provision for credit losses 1,319 639 18 1,976

Segment gross profit

28 unchanged sentences

miscellaneous operating costs related to specialty finance activities.

Three Months Ended March 31, 2025

Six Months Ended June 30, 2026

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

2 unchanged sentences

Net interest income 65,076 6,270 451 71,797

Provision for credit losses 656 841 1,090 2,587

Net interest income after provision for credit losses 64,420 5,429 ( 639 ) 69,210

Net realized gains on mortgage loans sold — 8,405 — 8,405

Change in fair value of mortgage loan commitments, net — 518 — 518

Total production revenue — 8,923 — 8,923

Mortgage servicing revenue — 5,235 — 5,235

Change in fair value of mortgage servicing rights:

Due to changes in model inputs of assumptions — 97 — 97

Other — ( 1,152 ) — ( 1,152 )

Total mortgage servicing revenue, net — 4,180 — 4,180

Other mortgage banking revenue — 496 — 496

Total mortgage banking income — 13,599 — 13,599

Purchased receivable income — — 12,605 12,605

Other operating income 5,513 — ( 101 ) 5,412

Total other operating income 5,513 13,599 12,504 31,616

Salaries and other personnel expense 24,810 11,674 3,806 40,290

Data processing expense 5,813 599 375 6,787

Occupancy expense 2,949 840 140 3,929

Professional and outside services 1,766 511 310 2,587

Marketing expense 1,396 177 14 1,587

Insurance expense 801 35 — 836

Compensation expense - Sallyport acquisition payments — — 1,000 1,000

Other operating expense 3,289 1,487 852 5,628

Total other operating expense 40,824 15,323 6,497 62,644

Income before provision for income taxes 29,109 3,705 5,368 38,182

Provision for income taxes 6,864 1,012 1,289 9,165

Net income $ 22,245 $ 2,693 $ 4,079 $ 29,017

Six Months Ended June 30, 2026

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

Interest income

$ 81,160 $ 9,125 $ 1,765 $ 92,050

Mortgage banking income - external revenue

— 13,599 — 13,599

Mortgage banking income - intersegment revenues

— 1,878 — 1,878

Purchased receivable income

— — 12,605 12,605

Other operating income

5,513 — ( 101 ) 5,412

86,673 24,602 14,269 125,544

Reconciliation of revenue

Elimination of intersegment revenues

— ( 1,878 ) — ( 1,878 )

Total consolidated revenues

$ 86,673 $ 22,724 $ 14,269 $ 123,666

Interest expense

16,084 2,855 1,314 20,253

Provision for credit losses 656 841 1,090 2,587

Segment gross profit

69,933 19,028 11,865 100,826

Salaries and other personnel expense $ 24,810 $ 11,674 $ 3,806 $ 40,290

Data processing expense 5,813 599 375 6,787

Occupancy expense 2,949 840 140 3,929

Professional and outside services 1,766 511 310 2,587

Marketing expense 1,396 177 14 1,587

Insurance expense 801 35 — 836

Compensation expense - Sallyport acquisition payments

— — 1,000 1,000

Intersegment expense

1,878 — — 1,878

Other segment items (2)

3,289 1,487 852 5,628

Segment expense

42,702 15,323 6,497 64,522

Reconciliation of expense

Elimination of intersegment expense

($ 1,878 ) $ — $ — ( 1,878 )

Total consolidated expense

$ 40,824 $ 15,323 $ 6,497 $ 62,644

Income before provision for income taxes

$ 29,109 $ 3,705 $ 5,368 $ 38,182

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.

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

10 unchanged sentences

Other mortgage banking revenue — 450 — 450

Total mortgage banking revenue — 4,251 — 4,251

Total mortgage banking income — 11,651 — 11,651

Purchased receivable income — — 12,047 12,047

8 unchanged sentences

Compensation expense - Sallyport acquisition payments

— — 1,200 1,200

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

1 unchanged sentence

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

Provision (benefit) for income taxes 3,253 310 688 4,251

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

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

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

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

4 unchanged sentences

Mortgage banking income - intersegment revenues

— 1,356 — 1,356

Purchased receivable income

21 unchanged sentences

Compensation expense - Sallyport acquisition payments

— — 1,200 1,200

Intersegment expense

1,356 — — 1,356

Other segment items (2)

18 unchanged sentences

miscellaneous operating costs related to specialty finance activities.

March 31, 2026

June 30, 2026

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

11 unchanged sentences

Goodwill $ 7,525 $ 7,492 $ 34,857 $ 49,874

Subsequent Events

On July 22, 2026, the Company announced that it entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Northrim, Whitewater Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), and PBCO Financial Corporation (“PBCO”), pursuant to which the Company will acquire PBCO in an all-stock transaction.

Upon the terms and subject to the conditions set forth in the Merger Agreement, (i) PBCO will merge with and into Merger Sub, with Merger Sub surviving the merger, (ii) immediately following the merger of PBCO and Merger Sub, and as a part of a single integrated transaction, Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity, and (iii) promptly following such merger, Northrim Bank (the “Bank”) and People’s Bank of Commerce, a wholly owned subsidiary of PBCO, will merge (the “Bank Merger”), with the Bank continuing as the surviving bank.

Pursuant to the terms of the Merger Agreement, PBCO shareholders will receive 1.160 shares of the Company’s common stock for each PBCO share they own.

Following closing, PBCO shareholders will own approximately 21 % of the outstanding common stock of the Company.

The combined company will have approximately $ 4.2 billion in assets and will expand the Company’s banking footprint into Oregon.

The closing of the merger is subject to approvals from the Federal Reserve, the FDIC, the Oregon Department of Consumer and Business Services, Division of Financial Regulation, the Alaska Department of Commerce, Community, and Economic Development, Division of Banking and Securities, the shareholders of the Company, and the shareholders of PBCO.

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