What changed in this filing

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Item 1. Business

2026-03-09 compared with 2025-03-17 · 98 added, 93 removed, 465 unchanged (29% of the section changed)

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RBB Bancorp’s principal business is to serve as the holding company for its wholly-owned banking subsidiaries, Royal Business Bank (“Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as "the Company." RBB Bancorp was formed in January 2011 as a bank holding company and RAM was formed in 2012 to hold and manage problem assets acquired in business combinations.

There are no problem assets at RAM or activity in this subsidiary for the fiscal years ended 2025 or 2024.

When we refer to “we”, “us”, “our”, or the “Company”, we are referring to RBB Bancorp and its consolidated subsidiaries including the Bank, collectively.

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We have supported our organic growth with disciplined strategic growth.

Between 2011 and 2018, we successfully completed six whole-bank acquisitions.

Most recently, on January 14, 2022, we purchased the Bank of the Orient's (“BOTO”) Honolulu, Hawaii branch (the “Hawaii Branch”).

We received a payment of $71.0 million to acquire all the premises and equipment at the Hawaii Branch, all deposits totaling $81.7 million and performing loans totaling $7.4 million as of the purchase date, reflecting a premium paid by us of approximately $2.3 million.

Between 2011 and 2018 we successfully completed six whole-bank acquisitions and, in 2022, a bank branch acquisition in Hawaii.

All of our acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the operating results of the acquired entities have been included in the consolidated financial statements from their respective acquisition dates.

We will continue to consider opportunistic acquisitions that we believe will be beneficial to our long-term growth strategy and will be accretive to our shareholders.

We operate as a minority depository institution (“MDI”), which is defined by the Federal Deposit Insurance Corporation (“FDIC”) as a federally insured depository institution where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority.

We operate as a minority depository institution (“MDI”), which is defined by the Federal Deposit Insurance Corporation (“FDIC”) as a federally insured depository institution ("IDI") where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority.

A MDI is eligible to receive support from the FDIC and other federal regulatory agencies such as training, technical assistance and review of proposed new deposit taking and lending programs, and the adoption of applicable policies and procedures governing such programs.

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The MDI designation has been historically beneficial to us, and we continue to use the program for technical assistance.

In addition, we have been designated a community development financial institution (“CDFI”).

CDFIs are certified by the CDFI Fund at the U.S.

Department of the Treasury (“Treasury”), which provide funds to CDFIs through a variety of programs.

We have established a CDFI advisory board to assist the Bank in finding organizations to support low-to-moderate income individuals.

To date, we have received five CDFI grants in the aggregate amount of $9.4 million and have deployed the grant proceeds and satisfied all performance obligations related to the grants.

We operate 24 banking offices in Arcadia, Cerritos, Diamond Bar, Irvine, Los Angeles, Monterey Park, Oxnard, Rowland Heights, San Gabriel, Silver Lake, Torrance, and Westlake Village, California;

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and Honolulu, Hawaii.

Our primary source of revenue is providing loans to customers, who are predominately small and middle-market businesses and individuals.

Our primary source of revenue is providing loans to customers, who are predominantly small and middle-market businesses and individuals.

We generate our revenue primarily from interest received on loans and, to a lesser extent, from interest received on investment securities.

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Our current strategic plan contains the following key elements:

Maintain regulatory capital levels in excess of fully phased-in Basel III requirements;

Maintain regulatory capital levels in excess of Basel III requirements;

Provide commercial banking services and products primarily to small to midsized commercial enterprises operating within Asian-centric communities or that can benefit from our areas of core lending expertise;

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provide or receive goods or services to or from Asian countries, primarily Chinese-speaking regions, such as China, Hong Kong, Macau, Taiwan;

have loan needs of $1 million to $20 million (average loan size of $3 million to $7 million) and

have loan needs of $1 million to $20 million (average loan size of $3 million to $7 million);

prioritize using bankers with strong market knowledge who are dedicated to serving the local markets in which we operate.

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Single-family residential (“SFR”) mortgage lending primarily to Asian-Americans willing to provide higher down payment amounts and pay higher fees and interest rates in return for reduced documentation requirements.

The Bank originates these loans through its correspondent banking relationships, and through its branch network.

In addition, we offer 15-year and 30-year qualified mortgage loans that are sold directly to the Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”), and in most cases, the Bank retains the loan servicing rights and obligations and;

Small Business Administration (“SBA”) loans consisting primarily of 7(a) loans through our SBA Preferred Lender status.

We sell the SBA guarantee portion of the loan in the secondary market subject to market conditions.

The Company originates these loans through its correspondent banking relationships, and through its branch network.

In addition, we offer 15-year and 30-year qualified mortgage loans that are sold directly to the Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”), and in most cases, the Company retains the loan servicing rights and obligations;

Small Business Administration (“SBA”) loans consisting primarily of 7(a) loans through our SBA Preferred Lender status with the ability to sell the SBA guarantee portion of the loan in the secondary market subject to market conditions.

Our Competition

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These banks promote competition for attracting deposits and making loans in the markets we target.

In addition to Chinese-American banks, we also compete with other banks in the region, particularly with Korean-American banks in our lending areas for SFR and SBA loans.

Although we were founded by and market primarily to Chinese-Americans, we are broadening our marketing efforts to include all Asian-American communities.

In addition to Chinese-American banks, we also compete with other banks in the region for deposits, loans, and other banking products.

Although we were founded by and market primarily to Chinese-Americans, we have broadened our marketing efforts to include all Asian-American communities.

In certain geographic markets where we currently operate, there is an overlap between Chinese-American, Korean-American, and other Asian-American banks for loan and deposit business.

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Lending Activities

We seek to be the premier provider of lending products and services in our market areas and serve the credit needs of high quality business and individual borrowers in the communities that we serve.

We seek to be the premier provider of lending products and services in our market areas and serve the credit needs of high quality business and individual borrowers in the communities we serve.

Our lending strategy is to maintain a broadly diversified loan portfolio based on the type of customer (e.g., businesses versus individuals), type of loan product (e.g., owner occupied commercial real estate, commercial loans, etc.), geographic location and industries in which our business customers are engaged.

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We strive to expedite all requests from potential borrowers by promptly responding after we receive the required financials and certain preliminary information.

Our ability to provide quick responses to borrowers with financial solutions, while performing appropriate underwriting if a borrower decides to move forward, is primarily due to our experienced banking professionals who understand the needs of borrowers in our target markets and their expertise in our Bank’s commercial lending practices.

In addition, our credit approval process is streamlined since decision-making often only requires a couple of key executive management members while any loans that exceed executive management's delegated authority is elevated to a board loan committee which meets at regularly scheduled meetings and whenever needed.

We have five principal lending areas:

Construction and Land Development Loans.

Our C&D loans are comprised of residential construction, commercial construction and land acquisition and development construction.

Interest reserves are generally established on real estate construction loans.

As of December 31, 2024, our real estate construction loan portfolio totaled $173.3 million, or 5.7% of our total loan portfolio, and was divided among the following categories:

$58.3 million of residential construction;

$98.0 million of commercial construction;

and $17.0 million of land acquisition and development.

As of December 31, 2023, the C&D loans totaled $181.5 million and were comprised of $80.3 million of residential construction, $78.1 million of commercial construction, and $23.1 million of land acquisition and development.

There were $44.6 million non-accrual C&D loans as of December 31, 2024 compared to zero as of December 31, 2023.

Commercial Real Estate Loans.

We offer real estate loans for owner occupied and non-owner occupied commercial property, including loans secured by single-family residences for business purposes, multi-family residential property and construction and land development loans.

Our management team has an extensive knowledge of the markets where we operate and our borrowers;

we take a conservative approach to CRE lending, focus on high quality credits with low loan-to-value ratios, income-producing properties with stable cash flow, and strong collateral profiles.

The real estate securing our existing CRE loans includes a wide variety of property types, such as multi-family properties, mixed-use residential and commercial, mobile home parks, hotels, offices, apartments, warehouses and retail centers.

The total CRE portfolio was $1.2 billion, or 39.3% of our total loan portfolio, at December 31, 2024 of which $160.2 million was secured by owner occupied properties compared to $1.2 billion, or 38.5% of our total loan portfolio, at December 31, 2023, of which $193.4 million was secured by owner occupied properties.

The multi-family residential loan portfolio totaled $605.5 million as of December 31, 2024 compared to $573.4 million as of December 31, 2023.

Non-accrual CRE loans totaled $17.1 million and $10.6 million at December 31, 2024 and 2023.

We originate qualified SFR mortgage loans and non-qualified, alternative documentation SFR mortgage loans through wholesale channels and retail channels, including our branch network, to accommodate the needs of the Asian-centric market.

We originate qualified SFR mortgage loans and non-qualified, alternative documentation SFR mortgage loans through wholesale and retail channels, including our branch network, to accommodate the needs of the Asian-centric and selected niche markets.

The qualified SFR mortgage loans are 15-year and 30-year conforming mortgages and may be sold directly to FNMA and FHLMC.

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We originate non-qualified SFR mortgage loans generally to hold for investment.

The loans generated through our retail branch network are to our customers, many of whom establish a deposit relationship with us.

The loans generated through our retail branch network are to our customers and referrals, many of whom establish a deposit relationship with us.

During 2025, we originated $202.8 million of SFR mortgage loans through our retail channel and $210.9 million of such loans through our wholesale channels.

During 2024, we originated $102.8 million of SFR mortgage loans through our retail channel and $80.4 million of such loans through our wholesale channels.

We have sold non-qualified SFR mortgage loans to other Asian-American banks and other investors.

SFR mortgage loans held for sale ("HFS") consist primarily of first trust deed mortgages on SFR properties located in California, New York and New Jersey.

SFR mortgage loans HFS are generally sold with the servicing rights retained.

We have sold non-qualified SFR mortgage loans to other banks and investors.

SFR mortgage loans held for sale ("HFS") consist primarily of first trust deed mortgages on SFR properties located in California, New York, Illinois, and New Jersey.

SFR mortgage loans HFS are generally sold with the servicing rights retained, however most recent loan sales have been servicing released.

In 2025, we identified new channels for secondary market sales for SFR loans that the Bank originated.

We completed two sales transactions with two other counterparties, both insured US banks, in addition to other bidders for our mortgage products, which creates a lever for liquidity and additional fee income.

As we identify additional counterparties who are able and willing to purchase our SFR mortgage loans, we expect to use this channel to grow additional fee income while increasing origination volume.

Commercial Real Estate Loans.

Our management team has an extensive knowledge of the markets where we operate and our borrowers;

we take a conservative approach to CRE lending, focus on high quality credits with low loan-to-value ratios, income-producing properties with stable cash flow, and strong collateral profiles.

The total CRE portfolio was

$1.3 billion, or

39.3% of our total loan portfolio, at

December 31, 2025, of which $154.7 million was secured by owner occupied properties, compared to

$1.2 billion, or 39.3% of our total loan portfolio, at

December 31, 2024, of which $160.2 million was secured by owner occupied properties.

The multi-family residential loan portfolio totaled $745.3 million as of

December 31, 2025, compared to $605.5 million as of

December 31, 2024.

Nonaccrual CRE loans totaled $8.2 million at

December 31, 2025, and $17.1 million at December 31, 2024, of which $9.7 million were held for sale.

Construction and Land Development Loans.

Our C&D loans are comprised of residential construction, commercial construction and land acquisition and development construction.

Interest reserves are generally established on real estate construction loans.

December 31, 2025, our real estate construction loan portfolio totaled

$155.5 million, or

4.7% of our total loan portfolio, and was divided among the following categories:

$100.0 million of commercial construction;

51.8 million of residential construction;

3.6 million of land acquisition and development.

December 31, 2024, the C&D loans totaled

$173.3 million and were comprised of $98.0 million of commercial construction;

$58.4 million of residential construction;

and $17.0 million of land acquisition and development.

28.0 million non-accrual C&D loans as of

December 31, 2025, compared to $44.6 million as of

December 31, 2024.

Commercial and Industrial Loans.

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As of December 31, 2025, we had outstanding C&I loans of $140.1 million, or 4.2% of our total loan portfolio, compared to $129.6 million, or 4.2% of our total loan portfolio as of December 31, 2024.

C&I loans on nonaccrual totaled $6.3 million and $854,000 at December 31, 2024 and 2023.

C&I loans on nonaccrual totaled $5.1 million at December 31, 2025, and $6.3 million at December 31, 2024, of which $1.5 million were held for sale.

We are designated as a Preferred Lender under the SBA Preferred Lender Program.

We offer mostly SBA 7(a) variable-rate loans.

We offer SBA 7(a) variable-rate loans.

We originate all loans to hold for investment and move loans to available for sale as management decides which loans to sell.

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We offer traditional depository products, including checking, savings, money market and time deposits, to individuals, businesses, municipalities and other entities through our branch network.

In addition, we offer retail deposit products where customers are able to achieve FDIC insurance for balances on deposit in excess of the $250,000 FDIC limit through the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweeps (“ICS”) programs.

Deposits at the Bank are insured by the FDIC up to statutory limits.

Deposits are insured by the FDIC up to statutory limits.

Time deposits include deposits acquired through both retail and wholesale channels.

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As many of our customers have more than $250,000 on deposit with us, we believe that using this method reflects a more accurate assessment of the stability of our deposit base.

As of December 31, 2024, $2.2 billion or 72.7% of our relationships are considered core relationships.

At December 31, 2025, $2.7 billion, or 80.6%, of our relationships are less than or equal to $250,000 or are over $250,000 and meet our defined criteria to be considered a stable deposit.

Many of our management team members, including our branch managers, have worked together for up to 30 years, and our deposits relationships have been cultivated over that time period.

Our ability to gather deposits, particularly core deposits, is an important aspect of our business franchise and we believe core deposits are a significant driver of franchise value as a cost efficient and stable source of funding to support our growth.

Our ability to gather deposits, particularly stable deposits, is an important aspect of our business franchise and we believe these deposits are a significant driver of franchise value as a cost efficient and stable source of funding to support our growth.

As of December 31, 2025, we had $3.4 billion of total deposits, with a weighted average spot rate of 2.90%.

Other Subsidiaries

In addition to the Bank and RAM, the holding Company has three statutory business trusts acquired through our business acquisitions as follows:

In addition to the Bank and RAM, the Bancorp has three statutory business trusts acquired through our business acquisitions as follows:

TFC Statutory Trust .

In connection with our 2016 acquisition of TomatoBank and its holding company, TFC, we acquired the TFC Statutory Trust (the “TFC Trust”), a statutory business trust that was established by TFC in 2006 as a wholly-owned subsidiary.

FAIC Statutory Trust I.

In connection with our 2018 acquisition of FAIB and its holding company, FAIC, we acquired the FAIC Statutory Trust I (the “FAIC Trust I”), a statutory business trust that was established by FAIC in 2004 under the laws of Delaware as a wholly-owned subsidiary.

In connection with our 2018 acquisition of First American International Bank ("FAIB") and its holding company, First American International Corp.

("FAIC"), we acquired the FAIC Statutory Trust I (“FAIC Trust I”), a statutory business trust that was established by FAIC in 2004 under the laws of Delaware as a wholly-owned subsidiary.

PGBH Trust I .

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We are the owner of all the beneficial interests represented by the common securities of the trusts.

In addition, the Bank has a wholly-owned subsidiary , FAIB Capital Corp, a real estate investment trust, which was acquired in connection with the 2018 acquisition of FAIC.

FAIB Capital Corp.

is a New York State corporation formed on August 28, 2013.

In addition, the Bank has a wholly-owned subsidiary , FAIB Capital Corp.

("FAIBCC"), a real estate investment trust, which was acquired through the acquisition of FAIC in 2018.

FAIBCC is a New York State corporation formed on August 28, 2013.

The purpose of this real estate investment trust is to minimize New York State and local taxes.

As of December 31, 2024, FAIB Capital Corp has $533.2 million in assets.

As of December 31, 2025, FAIBCC had $533.7 million in assets.

Human Capital Resources

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Staffing Model.

The majority of our staff are regular full-time employees.

We also employ regular part-time associates and some seasonal/temporary associates.

As of December 31, 2024, we had 372 full-time equivalent employees.

We do not outsource job functions or use subcontractors to fill open positions.

The majority of our staff are regular full-time employees, however we also employ regular part-time associates.

We do not outsource job functions or use subcontractors to fill open positions, and rarely use seasonal or temporary employees.

None of our employees are represented by any collective bargaining unit or are parties to a collective bargaining agreement.

As of December 31, 2025, we had 369 full-time equivalent employees.

Health & Safety.

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Flexible work schedules;

Paid time off (PTO), holidays and bank holidays;

Paid time off, holidays and bank holidays;

Internal training and development;

Employee Assistance Plans (EAP)

Employee Assistance Plans.

Corporate Information

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federal and state laws.

As a result, our growth and earnings performance may be affected not only by management decisions and general economic conditions, but also by the requirements of federal and state statutes and by the regulations and policies of various bank regulatory agencies, including the Department of Financial Protection and Innovation ("DFPI"), the Board of Governors of the Federal Reserve System (“Federal Reserve”), the FDIC, and the Consumer Financial Protection Bureau (“CFPB”).

As a result, our growth and earnings performance may be affected not only by management decisions and general economic conditions, but also by the requirements of federal and state statutes and by the regulations and policies of various bank regulatory agencies, including the DFPI, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the FDIC, and the CFPB.

Furthermore, tax laws administered by the Internal Revenue Service and state taxing authorities, accounting rules developed by the FASB, securities laws administered by the SEC and state securities authorities, anti-money laundering laws enforced by the Treasury, and mortgage related rules, including with respect to loan securitization and servicing by the U.S.

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Subject to certain conditions (including deposit concentration limits established by the BHCA and the Dodd-Frank Act), the Federal Reserve may allow a bank holding company to acquire banks located in any state of the United States.

In approving interstate acquisitions, the Federal Reserve is required to give effect to applicable state law

limitations on the aggregate amount of deposits that may be held by the acquiring bank holding company and its IDI affiliates in the state in which the target bank is located (provided that those limits do not discriminate against out-of-state depository institutions or their holding companies) and state laws that require that the target bank have been in existence for a minimum period of time (not to exceed five years) before being acquired by an out-of-state bank holding company.

In approving interstate acquisitions, the Federal Reserve is required to give effect to applicable state law limitations on the aggregate amount of deposits that may be held by the acquiring bank holding company and its IDI affiliates in the state in which the target bank is located (provided that those limits do not discriminate against out-of-state depository institutions or their holding companies) and state laws that require that the target bank have been in existence for a minimum period of time (not to exceed five years) before being acquired by an out-of-state bank holding company.

Furthermore, in accordance with the Dodd-Frank Act, bank holding companies must be well-capitalized and well-managed in order to effect interstate mergers or acquisitions.

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This general prohibition is subject to a number of exceptions.

authority would permit Bancorp to engage in a variety of banking-related businesses, including the ownership and operation of a savings association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development) and mortgage banking and brokerage.

The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve prior to November 11, 1999 to be “so closely related to banking as to be a proper incident thereto.” This authority would permit Bancorp to engage in a variety of banking-related businesses, including the ownership and operation of a savings association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development) and mortgage banking and brokerage.

The BHCA generally does not place territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies.

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If the Federal Reserve subsequently determines that Bancorp, as a bank holding company, is not well-capitalized or well-managed, Bancorp would have a period of time during which to achieve compliance, but during the period of noncompliance, the Federal Reserve may place any limitations on Bancorp it believes to be appropriate.

Furthermore, if the Federal Reserve subsequently determines that the Bank, as a bank holding company subsidiary, has not received a

satisfactory CRA rating, Bancorp would not be able to commence any new financial activities or acquire a company that engages in such activities.

Furthermore, if the Federal Reserve subsequently determines that the Bank, as a bank holding company subsidiary, has not received a satisfactory CRA rating, Bancorp would not be able to commence any new financial activities or acquire a company that engages in such activities.

Federal law also prohibits any person or company from acquiring “control” of an FDIC-insured depository institution or its holding company without prior notice to the appropriate federal bank regulator.

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To be considered “well capitalized,” a bank holding company or bank must have the following minimum ratios:

(i) a Tier 1 leverage ratio of 5.0%, (ii) a CET1 capital ratio of 6.5%, (iii) a Tier 1 risk-based capital ratio of 8.0%, and (iv) a Total risk-based capital ratio of 10.0%.

(i) a CET1 capital ratio of 6.5%, (ii) a Tier 1 risk-based capital ratio of 8.0%, (iii) a Total risk-based capital ratio of 10.0%, and (iv) a Tier 1 leverage ratio of 5.0%.

As of December 31, 2025, the Company's capital ratios exceeded the minimum capital adequacy guideline percentage requirements to be considered "well capitalized" under the Basel III capital rules.

The Basel III final framework provides for a number of deductions from and adjustments to CET1.

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The Dodd-Frank Act excludes trust preferred securities issued after May 19, 2010 from being included in Tier 1 capital, unless the issuing company is a bank holding company with less than $500 million in total assets.

Trust preferred securities issued prior to that date will continue to count as Tier 1 capital for bank holding companies with less than $15 billion in total assets, such as Bancorp.

Trust preferred securities issued prior to that date will continue to count as Tier 1 capital for bank holding companies with less than $15 billion in total assets.

The trust preferred securities issued by our unconsolidated subsidiary capital trusts qualify as Tier 1 capital up to a maximum limit of 25% of total Tier 1 capital.

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“Critically undercapitalized” institutions are subject to the appointment of a receiver or conservator.

The capital classification of a bank holding company and a bank affects the frequency of regulatory examinations, the bank holding company’s and the bank’s ability to engage in certain activities and the deposit insurance premium paid by the Bank.

As of December 31, 2024, we met the requirements to be “well-capitalized” based upon the aforementioned ratios for purposes of the PCA regulations, as currently in effect.

Dividend Payments

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Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies.

The terms of our junior subordinated notes also limit our ability to pay dividends on our common stock.

If we are not current on our payment of interest on our Junior Subordinated Notes, we may not pay dividends on our common stock.

The terms of our subordinated notes also limit our ability to pay dividends on our common stock.

If we are not current on our payment of interest on our subordinated notes, we may not pay dividends on our common stock.

The amount of future dividends by Bancorp will depend on our earnings, financial condition, capital requirements and other factors, and will be determined by our board of directors in accordance with the capital management and dividend policy.

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Future cash dividends by the Bank will also depend upon management’s assessment of future capital requirements, contractual restrictions, and other factors.

During the years ended December 31, 2025 and 2024, the Bank paid $45.0 million and $20.0 million, respectively, of dividends to Bancorp.

Dividends on common stock during the years ended December 31, 2025 and 2024, totaled $11.3 million and $11.7 million.

Transactions with Affiliates and Insiders Depository institutions are subject to the restrictions contained in the Federal Reserve Act (the “FRA”) with respect to loans to directors, executive officers and principal stockholders.

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The federal banking agencies may take compliance with fair lending laws and practices, including CRA into account when regulating and supervising other activities.

On October 24, 2023, the federal regulatory agencies jointly issued a final rule to strengthen and modernize regulations implementing the CRA.

On March 29, 2024, a federal district court in Texas granted a preliminary injunction barring implementation of the final rule in response to a lawsuit filed by several trade groups.

We will continue to monitor the litigation until resolved.

We have also begun efforts to evaluate the impact of the new rule and to develop a strategy to ensure compliance.

On October 24, 2023, the federal regulatory agencies jointly issued a final rule to strengthen and modernize regulations implementing the CRA, but in light of litigation, the agencies issued a joint proposal in July 2025 to rescind this rule and reinstate the CRA framework that existed prior to the 2023 final rule.

Anti-Money Laundering and OFAC Regulation

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The risk retention requirement generally is 5%, but could be increased or decreased by regulation.

The Bank does not currently expect the CFPB’s rules to have a significant impact on its operations, except for higher compliance costs.

The Volcker Rule

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Failure to comply with applicable laws and regulations could subject us and our officers and directors to administrative sanctions and potentially substantial civil money penalties.

may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including, without limitation, the fact that the banking institution is undercapitalized and has no reasonable prospect of becoming adequately capitalized, fails to become adequately capitalized when required to do so, fails to submit a timely and acceptable capital restoration plan or materially fails to implement an accepted capital restoration plan.

In addition to the grounds discussed above under “Prompt Corrective Actions,” the appropriate federal bank regulatory agency may appoint the FDIC as conservator or receiver for a banking institution (or the FDIC may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including, without limitation, the fact that the banking institution is undercapitalized and has no reasonable prospect of becoming adequately capitalized, fails to become adequately capitalized when required to do so, fails to submit a timely and acceptable capital restoration plan or materially fails to implement an accepted capital restoration plan.

The DFPI also has broad enforcement powers over us, including the power to impose orders, remove officers and directors, impose fines and appoint supervisors and conservators.

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The proposed rule was adopted as final without change.

Also, in the final rule adopted on October 18, 2022, the FDIC incorporated Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (ASC 326) Troubled Debt Restructurings and Vintage Disclosures in the risk-based deposit insurance assessment system applicable to all large and highly complex insured depository institutions ("IDIs").

In March 2022, the FASB issued ASU 2022-02, which eliminates accounting guidance for troubled debt restructurings (“TDRs”) and introduces new disclosures and enhances existing disclosures concerning certain loan refinancings and restructurings when a borrower is experiencing financial difficulty.

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The final rule became effective on January 1, 2023, and was applicable to the first quarterly assessment period of 2023.

On November 16, 2023, the FDIC adopted a final rule on special assessment to recover the losses to the DIF from the protection of uninsured depositors following the closures of Silicon Valley Bank, Santa Clara, CA, and Signature Bank, New York, NY during March 2023.

The assessment base for the special assessment is equal to an IDI’s estimated uninsured deposits, reported for the quarter that ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits from the IDI, or for IDIs that are part of a holding company with one or more subsidiary IDIs, at the banking organization level.

The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods.

The FDIC retains the ability to cease collection early, extend the special assessment collection period, and impose a final shortfall special assessment to collect the difference between actual losses and the amounts collected after the receiverships for Silicon Valley Bank and Signature Bank terminate.

The final rule became effective of April 1, 2024, with the first collection for the special assessment reflected on the invoice for the first quarterly assessment period of 2024 with a payment date of June 28, 2024.

Our deposits as of December 31, 2024 were below $5 billion and therefore the Bank is not subject to this special assessment.

In November 2023, the FDIC issued a final rule to implement a special assessment to recover losses to the DIF arising from the protection of uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in March 2023.

The special assessment is based on an IDI’s estimated uninsured deposits as of December 31, 2022, adjusted to exclude the first $5.0 billion of estimated uninsured deposits and will be assessed at a quarterly rate of 3.36 bps, over eight quarterly assessment periods beginning in the first quarter of 2024.

The FDIC approved an interim final rule in December 2025 to reduce the special assessment for the eighth collection quarter to 2.97 bps.

The interim final rule aims to ensure the FDIC will collect the exact amount needed through the special assessment to match the total losses preventing either over- or under-collection.

The interim final rule also requires the FDIC to provide an offset to regular quarterly deposit insurance assessments for banks subject to the special assessment if the aggregate amount collected exceeds losses, following the final resolution of litigation between the FDIC and one of the bank entities.

Our deposits have been below $5 billion and therefore the Bank has not been subject to this special assessment.

To the extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain.

Operations, Consumer and Privacy Compliance Laws

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Under these provisions, a financial institution must provide to its customers, at the inception of the customer relationship and annually thereafter, the institution’s policies and procedures regarding the handling of customers’ nonpublic personal financial information.

These provisions also provide that, except for certain limited exceptions, a financial institution may not provide such personal information to unaffiliated third parties unless the institution discloses to the customer that such information may be so provided and the customer is given the opportunity to

opt out of such disclosure.

These provisions also provide that, except for certain limited exceptions, a financial institution may not provide such personal information to unaffiliated third parties unless the institution discloses to the customer that such information may be provided and the customer is given the opportunity to opt out of such disclosure.

In June 2018, the California legislature passed the California Consumer Privacy Act of 2018 (the “CCPA”), which took effect on January 1, 2020.

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No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in May 2024.

institutions to take certain oversight actions related to incentive-based compensation, and (iii) require those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.

The proposed rule is intended to (i) prohibit incentive-based payment arrangements that the banking agencies determine could encourage certain financial institutions to take inappropriate risks by providing excessive compensation or that could lead to material financial loss, (ii) require the board of directors of those financial institutions to take certain oversight actions related to incentive-based compensation, and (iii) require those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.

Although a final rule has not been issued, the Company and the Bank have undertaken efforts to ensure that their incentive compensation plans do not encourage inappropriate risks, consistent with the principles identified above.

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We have not been audited by the Internal Revenue Service.

For 2024, 2023 and 2022, we were subject to a maximum federal income tax rate of 21.00%, California state income tax rate of 10.84% and various state tax rates for other various state jurisdictions.

For 2025, 2024, and 2023, we were subject to a maximum federal income tax rate of 21.00%, California state income tax rate of 10.84% and various other state and local tax rates, including a New York state and New York City income tax rate of 9.43% and 8.85%.

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

What changed 10-K

Item 1. Business