TRICO BANCSHARES / 10-Q

Item 1. Financial Statements (unaudited) TRICO BANCSHARES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data; unaudited) June 30, 2025 December 31, 2024 Assets: Cash and due from banks $ 130,147 $ 85,409 Cash at Federal Reserve and other banks 184,121 59,547 Cash and cash equivalents 314,268 144,956 Investment securities: Marketable equity securities 2,656 2,609 Available for sale debt securities, at fair value (amortized cost of $ 2,004,864 and $ 2,138,533 ) 1,815,376 1,904,885 Held to maturity debt securities, at amortized cost, net of allowance for credit losses of $ 0 101,672 111,866 Restricted equity securities 17,250 17,250 Loans held for sale 1,577 709 Loans 6,958,993 6,768,523 Allowance for credit losses ( 124,455 ) ( 125,366 ) Total loans, net 6,834,538 6,643,157 Premises and equipment, net 70,092 70,287 Cash value of life insurance 135,520 140,149 Accrued interest receivable 32,534 34,810 Goodwill 304,442 304,442 Other intangible assets, net 5,435 6,432 Operating leases, right-of-use 22,158 23,529 Other assets 266,465 268,647 Total assets $ 9,923,983 $ 9,673,728 Liabilities and Shareholders’ Equity: Liabilities: Deposits: Noninterest-bearing demand $ 2,559,788 $ 2,548,613 Interest-bearing 5,816,021 5,538,963 Total deposits 8,375,809 8,087,576 Accrued interest payable 10,172 11,501 Operating lease liability 23,965 25,437 Other liabilities 128,162 137,506 Other borrowings 17,788 89,610 Junior subordinated debt 101,264 101,191 Total liabilities 8,657,160 8,452,821 Commitments and contingencies (Note 9) Shareholders’ equity: Preferred stock, no par value: 1,000,000 shares authorized, zero issued and outstanding at June 30, 2025 and December 31, 2024 — — Common stock, no par value: 50,000,000 shares authorized; 32,550,264 and 32,970,425 issued and outstanding at June 30, 2025 and December 31, 2024, respectively 685,489 693,462 Retained earnings 702,690 679,907 Accumulated other comprehensive loss, net of tax ( 121,356 ) ( 152,462 ) Total shareholders’ equity 1,266,823 1,220,907 Total liabilities and shareholders’ equity $ 9,923,983 $ 9,673,728 See accompanying notes to unaudited condensed consolidated financial statements. 3 Table of Contents TRICO BANCSHARES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data; unaudited) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Interest and dividend income: Loans, including fees $ 98,695 $ 98,229 $ 194,073 $ 194,713 Investments: Taxable securities 14,548 16,617 29,921 34,066 Tax exempt securities 879 915 1,763 1,832 Dividends 373 387 752 767 Interest bearing cash at Federal Reserve and other banks 1,866 884 3,929 1,071 Total interest and dividend income 116,361 117,032 230,438 232,449 Interest expense: Deposits 28,038 29,021 56,903 52,550 Other borrowings 92 4,118 1,061 11,496 Junior subordinated debt 1,712 1,896 3,413 3,670 Total interest expense 29,842 35,035 61,377 67,716 Net interest income 86,519 81,997 169,061 164,733 Provision for credit losses 4,665 405 8,393 4,710 Net interest income after credit loss provision 81,854 81,592 160,668 160,023 Non-interest income: Service charges and fees 13,650 12,796 26,328 25,433 Gain on sale of loans 503 388 847 649 Gain (Loss) on sale or exchange of investment securities 4 ( 45 ) ( 1,142 ) ( 45 ) Asset management and commission income 1,635 1,359 3,123 2,487 Increase in cash value of life insurance 842 831 1,662 1,634 Other 456 537 2,345 1,479 Total non-interest income 17,090 15,866 33,163 31,637 Non-interest expense: Salaries and related benefits 38,286 35,401 75,141 69,705 Other 22,845 22,938 45,575 45,138 Total non-interest expense 61,131 58,339 120,716 114,843 Income before provision for income taxes 37,813 39,119 73,115 76,817 Provision for income taxes 10,271 10,085 19,210 20,034 Net income $ 27,542 $ 29,034 $ 53,905 $ 56,783 Per share data: Basic earnings per share $ 0.84 $ 0.88 $ 1.64 $ 1.71 Diluted earnings per share $ 0.84 $ 0.87 $ 1.63 $ 1.70 Dividends per share $ 0.33 $ 0.33 $ 0.66 $ 0.66 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (In thousands; unaudited) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Net income $ 27,542 $ 29,034 $ 53,905 $ 56,783 Other comprehensive income (loss), net of tax: Unrealized gains (losses) on available for sale securities arising during the period 9,008 2,852 31,106 ( 8,346 ) Change in minimum pension liability — — — — Change in joint beneficiary agreements — — — — Other comprehensive income (loss) 9,008 2,852 31,106 ( 8,346 ) Comprehensive income $ 36,550 $ 31,886 $ 85,011 $ 48,437 See accompanying notes to unaudited condensed consolidated financial statements. 4 Table of Contents TRICO BANCSHARES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (In thousands, except share and per share data; unaudited) Shares of Common Stock Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Balance at April 1, 2024 33,168,770 $ 696,464 $ 630,954 $ ( 164,367 ) $ 1,163,051 Net income 29,034 29,034 Other comprehensive income (loss) 2,852 2,852 RSU vesting 851 851 PSU vesting 344 344 RSUs released 63,811 — PSUs released 32,248 — Repurchase of common stock ( 275,502 ) ( 5,781 ) ( 4,396 ) ( 10,177 ) Dividends paid ($ 0.33 per share) ( 10,905 ) ( 10,905 ) Three months ended June 30, 2024 32,989,327 $ 691,878 $ 644,687 $ ( 161,515 ) $ 1,175,050 Balance at April 1, 2025 32,892,488 $ 692,500 $ 693,383 $ ( 130,364 ) $ 1,255,519 Net income 27,542 27,542 Other comprehensive income (loss) 9,008 9,008 RSU vesting 883 883 PSU vesting 353 353 RSUs released 49,296 — Repurchase of common stock ( 391,520 ) ( 8,247 ) ( 7,466 ) ( 15,713 ) Dividends paid ($ 0.33 per share) ( 10,769 ) ( 10,769 ) Three months ended June 30, 2025 32,550,264 $ 685,489 $ 702,690 $ ( 121,356 ) $ 1,266,823 Balance at January 1, 2024 33,268,102 $ 697,349 $ 615,502 $ ( 153,169 ) $ 1,159,682 Net income 56,783 56,783 Other comprehensive income (loss) ( 8,346 ) ( 8,346 ) RSU vesting 1,619 1,619 PSU vesting 775 775 RSUs released 63,811 — PSUs released 32,248 — Repurchase of common stock ( 374,834 ) ( 7,865 ) ( 5,720 ) ( 13,585 ) Dividends paid ($ 0.66 per share) ( 21,878 ) ( 21,878 ) Six months ended June 30, 2024 32,989,327 691,878 644,687 ( 161,515 ) 1,175,050 Balance at January 1, 2025 32,970,425 $ 693,462 $ 679,907 $ ( 152,462 ) $ 1,220,907 Net income 53,905 53,905 Other comprehensive income (loss) 31,106 31,106 RSU vesting 1,680 1,680 PSU vesting 695 695 RSUs released 71,135 — Repurchase of common stock ( 491,296 ) ( 10,348 ) ( 9,474 ) ( 19,822 ) Dividends paid ($ 0.66 per share) ( 21,648 ) ( 21,648 ) Six months ended June 30, 2025 32,550,264 $ 685,489 $ 702,690 $ ( 121,356 ) $ 1,266,823 See accompanying notes to unaudited condensed consolidated financial statements. 5 Table of Contents TRICO BANCSHARES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands; unaudited) For the six months ended June 30, 2025 2024 Operating activities: Net income $ 53,905 $ 56,783 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of premises and equipment, and amortization 3,104 3,000 Amortization of intangible assets 997 2,060 Provision for credit losses 8,393 4,710 Amortization of investment securities premium, net 919 271 Loss on sale of investment securities 1,142 45 Originations of loans for resale ( 38,334 ) ( 25,245 ) Proceeds from sale of loans originated for resale 37,984 25,682 Gain on sale of loans ( 847 ) ( 649 ) Change in fair market value of mortgage servicing rights 192 136 Provision for losses on foreclosed assets 3 262 Gain on transfer of loans to foreclosed assets — ( 38 ) Change in the market value of foreclosed assets ( 3 ) — Operating lease expense payments ( 2,996 ) ( 3,147 ) Loss on disposal of fixed assets 90 6 Increase in cash value of life insurance ( 1,662 ) ( 1,634 ) Gain on life insurance death benefit ( 1,207 ) — (Gain) loss on marketable and trading equity securities ( 47 ) 149 Equity compensation vesting expense 2,375 2,394 Change in: Interest receivable 2,276 1,241 Interest payable ( 1,329 ) 3,573 Amortization of operating lease ROUA 2,895 3,028 Other assets and liabilities, net ( 14,100 ) ( 15,737 ) Net cash from operating activities 53,750 56,890 Investing activities: Proceeds from maturities of securities available for sale 125,572 221,664 Proceeds from maturities of securities held to maturity 10,107 10,713 Proceeds from sale and calls of available for sale securities 30,743 28,570 Purchases of securities available for sale ( 24,620 ) ( 53,468 ) Loan origination and principal collections, net ( 198,569 ) 49,578 Proceeds from sale of other real estate owned 103 — Purchases of premises and equipment ( 2,715 ) ( 2,010 ) Net cash from (used by) investing activities ( 59,379 ) 255,047 Financing activities: Net change in deposits 288,233 216,192 Net change in other borrowings ( 71,822 ) ( 384,809 ) Repurchase of common stock ( 19,822 ) ( 13,585 ) Dividends paid ( 21,648 ) ( 21,878 ) Net cash from (used by) financing activities 174,941 ( 204,080 ) Net change in cash and cash equivalents 169,312 107,857 Cash and cash equivalents, beginning of period 144,956 98,701 Cash and cash equivalents, end of period $ 314,268 $ 206,558 See accompanying notes to unaudited condensed consolidated financial statements. 6 Table of Contents Supplemental disclosure of noncash activities: Unrealized gain (loss) on securities available for sale $ 44,160 $ ( 11,848 ) Market value of shares tendered in-lieu of cash to pay for exercise of equity and/or related taxes 907 1,102 Obligations incurred in conjunction with leased assets 1,006 1,426 Life insurance receivable 7,414 — Loans transferred to foreclosed assets — 12 Supplemental disclosure of cash flow activity: Cash paid for interest expense $ 62,706 $ 64,143 Cash paid for income taxes 19,600 21,200 See accompanying notes to unaudited condensed consolidated financial statements. 7 Table of Contents NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies Description of Business and Basis of Presentation TriCo Bancshares (the “Company” or “we”) is a California corporation organized to act as a bank holding company for Tri Counties Bank (the “Bank”). The Company and the Bank are headquartered in Chico, California. The Bank is a California-chartered bank that is engaged in the general commercial banking business in 31 California counties. The consolidated financial statements are prepared in accordance with accounting policies generally accepted in the United States of America and general practices in the banking industry. All adjustments necessary for a fair presentation of these consolidated financial statements have been included and are of a normal and recurring nature. The financial statements include the accounts of the Company. All inter-company accounts and transactions have been eliminated in consolidation. The Company has five capital subsidiary business trusts (collectively, the “Capital Trusts”) that issued trust preferred securities, including two organized by the Company and three acquired with the acquisition of North Valley Bancorp. For financial reporting purposes, the Company’s investments in the Capital Trusts of $ 1.8 million are accounted for under the equity method and, accordingly, are not consolidated and are included in other assets on the consolidated balance sheet. See the Note 8 - footnote Junior Subordinated Debt for additional information on borrowings outstanding. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”). The Company believes that the disclosures made are adequate to make the information not misleading. Segment and Significant Group Concentration of Credit Risk The Company grants agribusiness, commercial, consumer, and residential loans to customers located throughout California. The Company has a diversified loan portfolio within the business segments located in this geographical area. While our Chief Executive Officer, the chief operating decision-maker (CODM), may monitor the revenue streams of the various products and services, operations are managed, financial performance is evaluated, and decisions are generally made on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. Accordingly, operations are considered by management to be aggregated in one reportable operating segment. Geographical Descriptions For the purpose of describing the geographical location of the Company’s operations, the Company has defined northern California as that area of California north of, and including, Stockton to the east and San Jose to the west; central California as that area of the state south of Stockton and San Jose, to and including, Bakersfield to the east and San Luis Obispo to the west; and southern California as that area of the state south of Bakersfield and San Luis Obispo. Reclassification Some items in the prior year consolidated financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholders’ equity. Cash and Cash Equivalents Net cash flows are reported for loan and deposit transactions and other borrowings. For purposes of the consolidated statement of cash flows, cash, due from banks with original maturities less than 90 days, interest-earning deposits in other banks, and Federal funds sold are considered to be cash equivalents. Allowance for Credit Losses - Securities The Company measures expected credit losses on HTM debt securities on a collective basis by major security type, then further disaggregated by sector and bond rating. Accrued interest receivable on HTM debt securities was considered insignificant at June 30, 2025 and December 31, 2024 and is therefore excluded from the estimate of credit losses. The estimate of expected credit losses considers 8 Table of Contents historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts based on current and expected changes in credit ratings and default rates. Based on the implied guarantees of the U. S. Government or its agencies related to certain of these investment securities, and the absence of any historical or expected losses, substantially all qualify for a zero loss assumption. Management has separately evaluated its HTM investment securities from obligations of state and political subdivisions utilizing the historical loss data represented by similar securities over a period of time spanning nearly 50 years. As a result of this evaluation, management determined that the expected credit losses associated with these securities is not significant for financial reporting purposes and therefore, no allowance for credit losses has been recognized for any period reported. The Company evaluates AFS debt securities in an unrealized loss position to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the allowance for credit losses and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired available for sale debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. In evaluating available for sale debt securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, the Company considers the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers' financial condition, among other factors. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes the uncollectability of an available for sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. No security credit losses were recognized during the six month periods ended June 30, 2025 and 2024, respectively. Loans Loans that management has the intent and ability to hold until maturity or payoff are reported at principal amount outstanding, net of deferred loan fees and costs. Loans are placed in nonaccrual status when reasonable doubt exists as to the full, timely collection of interest or principal, or a loan becomes contractually past due by 90 days or more with respect to interest or principal and is not well secured and in the process of collection. When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed against interest income. Income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is considered probable. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of Management, the loan is estimated to be fully collectible as to both principal and interest. Accrued interest receivable is not included in the calculation of the allowance for credit losses. Allowance for Credit Losses - Loans The ACL is a valuation account that is deducted from the loan's amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged-off against the allowance when management believes the recorded loan balance is confirmed as uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Regardless of the determination that a charge-off is appropriate for financial accounting purposes, the Company manages its loan portfolio by continually monitoring, where possible, a borrower's ability to pay through the collection of financial information, delinquency status, borrower discussion and the encouragement to repay in accordance with the original contract or modified terms, if appropriate. The ACL consists of two primary components: (1) the determination of an ACL for loans that are individually identified and analyzed and (2) establishment of an ACL for loans collectively analyzed. To determine the collectively analyzed portion of the ACL, the Company identified various portfolio segments based on loan attributes such as, but not limited to; collateral type and loan purpose or use, to ensure loans with similar risk characteristics are measured on a collective basis. The Company utilizes three different loss model configurations and assigned each of the portfolio segments to one of the three loss model configurations. Historical credit loss experience for financial institutions nationwide, paired with relevant forecasts of macroeconomic conditions, forms the basis for the estimate of expected credit losses amongst the collectively analyzed loan portfolio. Further, each of the three loss model configurations utilized by the Company incorporate unique inputs, such as the following: (1) Commercial Real Estate : origination vintage, delinquency status, loan-to-value as of the origination date, stated maturity date, property type, and property status (2) Commercial and Industrial : loan maturity, credit spread at origination, risk grade, and loan type (3) Consumer: FICO, origination vintage, product type, and state geography if applicable One of the key assumptions requiring significant judgment in the process is estimating the Company's ACL relates to macroeconomic forecasts that are incorporated into the loss models. As all economic outlooks are inherently uncertain, the Company utilizes various data points to better inform management's estimation of expected credit losses given observable and forecast changes in the economic environment and market conditions. These macroeconomic scenario forecasts incorporate variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to: gross domestic product, unemployment rate, consumer price index, corporate interest rate spreads, and economic policy. After quantitative considerations, management evaluates the need for additional qualitative adjustments that consider the expected impact of certain factors not fully captured in the quantitative and macroeconomic reserve calculations. These qualitative adjustments may apply to the collectively analyzed pool as a whole, one or more of the three loss models, or to one or more of the loan portfolio segments. 9 Table of Contents PCD assets are assets acquired at a discount that is due, in part, to credit quality deterioration since their origination. PCD assets are initially recorded and accounted for at fair value, by taking the sum of the present value of expected future cash flows and an allowance for credit losses, at acquisition. The allowance for credit losses for PCD assets is recorded through a gross-up of reserves on the balance sheet, while the allowance for acquired non-PCD assets, such as loans, is recorded through the provision for credit losses on the income statement, consistent with originated loans. Subsequent to acquisition, the allowance for credit losses for PCD loans will generally follow the same forward-looking estimation, provision, and charge-off process as non-PCD acquired and originated loans Allowance for Credit Losses - Unfunded commitments The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance for credit loss calculation, other than those that are unconditionally cancellable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. To determine the expected funding rate, the Company uses a historical utilization rate for each segment. The allowance for credit losses for off-balance-sheet credit risk exposures is reported in other liabilities in the condensed consolidated balance sheets. Accounting Standards Update Accounting standards adopted in the current period Standard Summary of Guidance Effects on financial statements None Accounting standards yet to be adopted Standard Summary of Guidance Effects on financial statements None Note 2 - Investment Securities The amortized cost, estimated fair values and allowance for credit losses of investments in debt securities are summarized in the following tables: June 30, 2025 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt Securities Available for Sale Obligations of U.S. government agencies $ 1,221,272 $ 727 $ ( 135,917 ) $ 1,086,082 Obligations of states and political subdivisions 240,719 34 ( 28,182 ) 212,571 Corporate bonds 5,690 4 ( 191 ) 5,503 Asset backed securities 265,749 171 ( 2,241 ) 263,679 Non-agency collateralized mortgage obligations 271,434 174 ( 24,067 ) 247,541 Total debt securities available for sale $ 2,004,864 $ 1,110 $ ( 190,598 ) $ 1,815,376 Debt Securities Held to Maturity Obligations of U.S. government agencies $ 98,940 $ 3 $ ( 4,646 ) 94,297 Obligations of states and political subdivisions 2,732 1 ( 57 ) 2,676 Total debt securities held to maturity $ 101,672 $ 4 $ ( 4,703 ) $ 96,973 10 Table of Contents December 31, 2024 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt Securities Available for Sale Obligations of U.S. government agencies $ 1,268,654 $ 16 $ ( 174,485 ) $ 1,094,185 Obligations of states and political subdivisions 249,627 66 ( 28,949 ) 220,744 Corporate bonds 6,182 — ( 345 ) 5,837 Asset backed securities 314,814 687 ( 1,238 ) 314,263 Non-agency collateralized mortgage obligations 299,256 238 ( 29,638 ) 269,856 Total debt securities available for sale $ 2,138,533 $ 1,007 $ ( 234,655 ) $ 1,904,885 Debt Securities Held to Maturity Obligations of U.S. government agencies $ 109,155 $ 3 $ ( 7,443 ) $ 101,715 Obligations of states and political subdivisions 2,711 2 ( 79 ) 2,634 Total debt securities held to maturity $ 111,866 $ 5 $ ( 7,522 ) $ 104,349 Proceeds from the sale of available for sale investment securities totaled $ 0.7 million and $ 28.6 million for the three months ended June 30, 2025 and 2024, respectively, and resulted in gross realized gains of $ 4.0 thousand and gross realized losses of $ 2.9 million during those respective periods. Proceeds from the sale of available for sale investment securities totaled $ 30.7 million and $ 28.6 million for the six months ended June 30, 2025 and 2024, respectively, resulting in gross realized losses of $ 1.1 million and $ 2.9 million, respectively. Investment securities with an aggregate carrying value of $ 891.9 million and $ 716.0 million at June 30, 2025 and December 31, 2024, respectively, were pledged as collateral for specific borrowings, lines of credit or local agency deposits. The amortized cost and estimated fair value of debt securities at June 30, 2025 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2025, obligations of the U.S. government and agencies with a cost basis totaling $ 1.2 billion consist almost entirely of residential real estate mortgage-backed securities whose contractual maturity, or principal repayment, will follow the repayment of the underlying mortgages. For purposes of the following table, the entire outstanding balance of these mortgage-backed securities issued by the U.S. government and agencies is categorized based on final maturity date. At June 30, 2025, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S. government corporations and agencies to be approximately 6.35 years. Average remaining life is defined as the time span after which the principal balance has been reduced by half. As of June 30, 2025, the contractual final maturity for available for sale and held to maturity investment securities is as follows: Debt Securities Available for Sale Held to Maturity (in thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year $ 6,846 $ 6,808 $ 1,168 $ 1,169 Due after one year through five years 54,833 53,091 2,334 2,282 Due after five years through ten years 163,284 152,467 97,202 92,601 Due after ten years 1,779,901 1,603,010 968 921 Totals $ 2,004,864 $ 1,815,376 $ 101,672 $ 96,973 Based on an evaluation of available information including security type, counterparty credit quality, past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability of cash flows, as of June 30, 2025, the Company has concluded that it expects to receive all contractual cash flows from each security held in its AFS and HTM debt securities portfolio. There was no allowance for credit losses related to investment securities as of June 30, 2025 or December 31, 2024. 11 Table of Contents Gross unrealized losses on debt 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, were as follows: June 30, 2025: Less than 12 months 12 months or more Total (in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Debt Securities Available for Sale Obligations of U.S. government agencies $ 12,636 $ ( 54 ) $ 992,579 $ ( 135,863 ) $ 1,005,215 $ ( 135,917 ) Obligations of states and political subdivisions 10,508 ( 401 ) 198,470 ( 27,781 ) 208,978 ( 28,182 ) Corporate bonds — — 4,253 ( 191 ) 4,253 ( 191 ) Asset backed securities 66,780 ( 340 ) 72,002 ( 1,901 ) 138,782 ( 2,241 ) Non-agency collateralized mortgage obligations — — 215,877 ( 24,067 ) 215,877 ( 24,067 ) Total debt securities available for sale $ 89,924 $ ( 795 ) $ 1,483,181 $ ( 189,803 ) $ 1,573,105 $ ( 190,598 ) Debt Securities Held to Maturity Obligations of U.S. government agencies $ — $ — $ 94,137 $ ( 4,646 ) $ 94,137 $ ( 4,646 ) Obligations of states and political subdivisions — — 1,507 ( 57 ) 1,507 ( 57 ) Total debt securities held to maturity $ — $ — $ 95,644 $ ( 4,703 ) $ 95,644 $ ( 4,703 ) December 31, 2024: Less than 12 months 12 months or more Total (in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Debt Securities Available for Sale Obligations of U.S. government agencies $ 63,714 $ ( 842 ) $ 1,021,654 $ ( 173,643 ) $ 1,085,368 $ ( 174,485 ) Obligations of states and political subdivisions 7,457 ( 140 ) 208,063 ( 28,809 ) 215,520 ( 28,949 ) Corporate bonds 1,229 ( 17 ) 4,608 ( 328 ) 5,837 ( 345 ) Asset backed securities 44,707 ( 30 ) 75,734 ( 1,208 ) 120,441 ( 1,238 ) Non-agency collateralized mortgage obligations — — 236,671 ( 29,638 ) 236,671 ( 29,638 ) Total debt securities available for sale $ 117,107 $ ( 1,029 ) $ 1,546,730 $ ( 233,626 ) $ 1,663,837 $ ( 234,655 ) Debt Securities Held to Maturity Obligations of U.S. government agencies $ — $ — $ 101,553 $ ( 7,443 ) $ 101,553 $ ( 7,443 ) Obligations of states and political subdivisions — — 1,485 ( 79 ) 1,485 ( 79 ) Total debt securities held to maturity $ — $ — $ 103,038 $ ( 7,522 ) $ 103,038 $ ( 7,522 ) Obligations of U.S. government agencies: The unrealized losses on investments in obligations of U.S. government agencies are caused by interest rate increases and illiquidity. The contractual cash flows of these securities are guaranteed by U.S. Government Sponsored Entities (principally Fannie Mae and Freddie Mac). It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of June 30, 2025. At June 30, 2025, 228 debt securities representing obligations of U.S. government agencies had unrealized losses with aggregate depreciation of 11.34 % from the Company’s amortized cost basis. Obligations of states and political subdivisions: The unrealized losses on investments in obligations of states and political subdivisions were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of June 30, 2025. At June 30, 2025, 153 debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of 11.83 % from the Company’s amortized cost basis. Corporate bonds: The unrealized losses on investments in corporate bonds were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of June 30, 2025. At June 30, 2025, 4 debt securities representing corporate bonds had unrealized losses with aggregate depreciation of 4.30 % from the Company’s amortized cost basis. 12 Table of Contents Asset backed securities: The unrealized losses on investments in asset backed securities were caused by increases in required yields by investors for these types of securities. At the time of purchase, each of these securities was rated AA or AAA and through June 30, 2025 has not experienced any deterioration in credit rating. At June 30, 2025, 23 asset backed securities had unrealized losses with aggregate depreciation of 1.59 % from the Company’s amortized cost basis. The Company continues to monitor these securities for changes in credit rating or other indications of credit deterioration. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of June 30, 2025. Non-agency collateralized mortgage obligations: The unrealized losses on investments in asset backed securities were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, there is no impairment on these securities and there has been no credit losses recorded as of June 30, 2025. At June 30, 2025, 17 asset backed securities had unrealized losses with aggregate depreciation of 10.03 % from the Company’s amortized cost basis. The Company monitors credit quality of debt securities held-to-maturity through the use of credit rating. The Company monitors the credit rating on a monthly basis. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator: June 30, 2025 December 31, 2024 (in thousands) AAA/AA/A BBB/BB/B AAA/AA/A BBB/BB/B Obligations of U.S. government agencies $ 98,940 $ — $ 109,155 $ — Obligations of states and political subdivisions 2,732 — 2,711 — Total debt securities held to maturity $ 101,672 $ — $ 111,866 $ — Note 3 – Loans A summary of loan balances at amortized cost are as follows: (in thousands) June 30, 2025 December 31, 2024 Commercial real estate: CRE non-owner occupied $ 2,438,949 $ 2,323,036 CRE owner occupied 997,205 961,415 Multifamily 1,030,052 1,028,035 Farmland 264,526 265,146 Total commercial real estate loans 4,730,732 4,577,632 Consumer: SFR 1-4 1st DT liens 850,208 859,660 SFR HELOCs and junior liens 390,344 363,420 Other 48,139 57,979 Total consumer loans 1,288,691 1,281,059 Commercial and industrial 467,564 471,271 Construction 304,920 279,933 Agriculture production 161,457 151,822 Leases 5,629 6,806 Total loans, net of deferred loan fees and discounts $ 6,958,993 $ 6,768,523 Total principal balance of loans owed, net of charge-offs $ 6,991,115 $ 6,804,113 Unamortized net deferred loan fees ( 15,054 ) ( 15,283 ) Discounts to principal balance of loans owed, net of charge-offs ( 17,068 ) ( 20,307 ) Total loans, net of unamortized deferred loan fees and discounts $ 6,958,993 $ 6,768,523 Allowance for credit losses on loans $ ( 124,455 ) $ ( 125,366 ) 13 Table of Contents Note 4 – Allowance for Credit Losses For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Three months ended June 30, 2025 (in thousands) Beginning Balance Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 39,670 $ — $ — $ 1,251 $ 40,921 CRE owner occupied 12,169 — 1 ( 592 ) 11,578 Multifamily 15,604 — — ( 507 ) 15,097 Farmland 4,737 — — 2,151 6,888 Total commercial real estate loans 72,180 — 1 2,303 74,484 Consumer: SFR 1-4 1st DT liens 10,995 — — 140 11,135 SFR HELOCs and junior liens 11,650 — 4 367 12,021 Other 2,895 ( 200 ) 36 ( 569 ) 2,162 Total consumer loans 25,540 ( 200 ) 40 ( 62 ) 25,318 Commercial and industrial 17,561 ( 8,384 ) 60 787 10,024 Construction 10,346 — — 649 10,995 Agriculture production 2,768 ( 11 ) 1 851 3,609 Leases 28 — — ( 3 ) 25 Allowance for credit losses on loans 128,423 ( 8,595 ) 102 4,525 124,455 Reserve for unfunded commitments 7,065 — — 140 7,205 Total $ 135,488 $ ( 8,595 ) $ 102 $ 4,665 $ 131,660 Allowance for credit losses – Six months ended June 30, 2025 (in thousands) Beginning Balance Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 37,229 $ — $ — $ 3,692 $ 40,921 CRE owner occupied 15,747 — 1 ( 4,170 ) 11,578 Multifamily 15,913 — — ( 816 ) 15,097 Farmland 3,960 — — 2,928 6,888 Total commercial real estate loans 72,849 — 1 1,634 74,484 Consumer: SFR 1-4 1st DT liens 14,227 — — ( 3,092 ) 11,135 SFR HELOCs and junior liens 10,411 — 16 1,594 12,021 Other 2,825 ( 317 ) 73 ( 419 ) 2,162 Total consumer loans 27,463 ( 317 ) 89 ( 1,917 ) 25,318 Commercial and industrial 14,397 ( 8,641 ) 166 4,102 10,024 Construction 7,224 — — 3,771 10,995 Agriculture production 3,403 ( 11 ) 614 ( 397 ) 3,609 Leases 30 — — ( 5 ) 25 Allowance for credit losses on loans 125,366 ( 8,969 ) 870 7,188 124,455 Reserve for unfunded commitments 6,000 — — 1,205 7,205 Total $ 131,366 $ ( 8,969 ) $ 870 $ 8,393 $ 131,660 14 Table of Contents The Company consistently seeks to refine its estimation methodology for determining the allowance for credit losses, the effects of which were insignificant during the current period, and are expected to be insignificant in future periods. Management continues to estimate the appropriate level of reserves using all relevant information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Management believes the primary risks inherent in the portfolio are a general decline in the economy or GDP, a decline in real estate market values, rising unemployment, increasing vacancy rates, and increases inflation or interest rates in the absence of economic improvement or any other such factors. Any one or a combination of these events may adversely affect a borrower's ability to repay its loan, resulting in increased delinquencies and loan losses. Although Management believes the Company has established and maintained the ACL on loans at appropriate levels, changes in reserves may be necessary if actual economic and other conditions differ substantially from the forecast used in estimating the ACL. For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Year ended December 31, 2024 (in thousands) Beginning Balance Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 35,077 $ — $ 187 $ 1,965 $ 37,229 CRE owner occupied 15,081 — 2 664 15,747 Multifamily 14,418 — — 1,495 15,913 Farmland 4,288 — — ( 328 ) 3,960 Total commercial real estate loans 68,864 — 189 3,796 72,849 Consumer: SFR 1-4 1st DT liens 14,009 ( 27 ) — 245 14,227 SFR HELOCs and junior liens 10,273 ( 41 ) 395 ( 216 ) 10,411 Other 3,171 ( 746 ) 217 183 2,825 Total consumer loans 27,453 ( 814 ) 612 212 27,463 Commercial and industrial 12,750 ( 1,787 ) 547 2,887 14,397 Construction 8,856 — — ( 1,632 ) 7,224 Agriculture production 3,589 ( 1,450 ) 65 1,199 3,403 Leases 10 — — 20 30 Allowance for credit losses on loans 121,522 ( 4,051 ) 1,413 6,482 125,366 Reserve for unfunded commitments 5,850 — — 150 6,000 Total $ 127,372 $ ( 4,051 ) $ 1,413 $ 6,632 $ 131,366 15 Table of Contents Allowance for credit losses – Three months ended June 30, 2024 (in thousands) Beginning Balance Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 36,687 $ — $ — $ 468 $ 37,155 CRE owner occupied 16,111 — 1 ( 239 ) 15,873 Multifamily 15,682 — — 291 15,973 Farmland 3,695 — — 336 4,031 Total commercial real estate loans 72,175 — 1 856 73,032 Consumer: SFR 1-4 1st DT liens 14,140 — — 464 14,604 SFR HELOCs and junior liens 9,942 ( 9 ) 51 103 10,087 Other 3,359 ( 118 ) 81 ( 339 ) 2,983 Total consumer loans 27,441 ( 127 ) 132 228 27,674 Commercial and industrial 11,867 ( 870 ) 261 870 12,128 Construction 9,162 — — ( 1,696 ) 7,466 Agriculture production 3,708 ( 613 ) 4 81 3,180 Leases 41 — — ( 4 ) 37 Allowance for credit losses on loans 124,394 ( 1,610 ) 398 335 123,517 Reserve for unfunded commitments 6,140 — — 70 6,210 Total $ 130,534 $ ( 1,610 ) $ 398 $ 405 $ 129,727 Allowance for credit losses – Six months ended June 30, 2024 (in thousands) Beginning Balance Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 35,077 $ — $ — $ 2,078 $ 37,155 CRE owner occupied 15,081 — 1 791 15,873 Multifamily 14,418 — — 1,555 15,973 Farmland 4,288 — — ( 257 ) 4,031 Total commercial real estate loans 68,864 — 1 4,167 73,032 Consumer: SFR 1-4 1st DT liens 14,009 ( 26 ) — 621 14,604 SFR HELOCs and junior liens 10,273 ( 41 ) 100 ( 245 ) 10,087 Other 3,171 ( 368 ) 121 59 2,983 Total consumer loans 27,453 ( 435 ) 221 435 27,674 Commercial and industrial 12,750 ( 1,000 ) 283 95 12,128 Construction 8,856 — — ( 1,390 ) 7,466 Agriculture production 3,589 ( 1,450 ) 25 1,016 3,180 Leases 10 — — 27 37 Allowance for credit losses on loans 121,522 ( 2,885 ) 530 4,350 123,517 Reserve for unfunded commitments 5,850 — — 360 6,210 Total $ 127,372 $ ( 2,885 ) $ 530 $ 4,710 $ 129,727 As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio. The Company analyzes loans individually to classify the loans as to credit risk and grading. This analysis is performed annually for all outstanding balances greater than $ 1 million and non-homogeneous loans, such as commercial real estate loans, unless other indicators, such as delinquency, trigger more frequent evaluation. Loans below the $ 1 million threshold and homogenous in nature are evaluated as needed for proper grading based on delinquency and borrower credit scores. 16 Table of Contents The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows: • Pass – This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital. • Special Mention – This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention. • Substandard – This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well-defined workout/rehabilitation program. • Doubtful – This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans. • Loss – This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the period indicated: Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2025 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2025 2024 2023 2022 2021 Prior Commercial real estate: CRE non-owner occupied risk ratings Pass $ 134,117 $ 188,430 $ 179,403 $ 416,411 $ 273,727 $ 1,029,079 $ 170,755 $ — $ 2,391,922 Special Mention — — 10,581 11,697 3,697 3,303 769 — 30,047 Substandard — — — — 459 16,521 — — 16,980 Doubtful/Loss — — — — — — — — — Total $ 134,117 $ 188,430 $ 189,984 $ 428,108 $ 277,883 $ 1,048,903 $ 171,524 $ — $ 2,438,949 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: CRE owner occupied risk ratings Pass $ 81,231 $ 81,017 $ 74,029 $ 184,347 $ 169,546 $ 331,432 $ 48,361 $ — $ 969,963 Special Mention — 137 364 1,917 242 4,349 — — 7,009 Substandard — 1,423 237 5,968 5,482 7,025 98 — 20,233 Doubtful/Loss — — — — — — — — — Total $ 81,231 $ 82,577 $ 74,630 $ 192,232 $ 175,270 $ 342,806 $ 48,459 $ — $ 997,205 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 17 Table of Contents Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2025 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2025 2024 2023 2022 2021 Prior Commercial real estate: Multifamily risk ratings Pass $ 27,059 $ 69,743 $ 27,703 $ 172,501 $ 290,906 $ 396,828 $ 40,268 $ — $ 1,025,008 Special Mention — — — — — 205 3,393 — 3,598 Substandard — — — 460 — 986 — — 1,446 Doubtful/Loss — — — — — — — — — Total $ 27,059 $ 69,743 $ 27,703 $ 172,961 $ 290,906 $ 398,019 $ 43,661 $ — $ 1,030,052 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Farmland risk ratings Pass $ 6,179 $ 23,378 $ 18,416 $ 34,878 $ 20,129 $ 47,705 $ 32,942 $ — $ 183,627 Special Mention 390 — — 2,051 3,237 3,863 2,743 — 12,284 Substandard — — 3,616 9,682 24,117 14,110 17,090 — 68,615 Doubtful/Loss — — — — — — — — — Total $ 6,569 $ 23,378 $ 22,032 $ 46,611 $ 47,483 $ 65,678 $ 52,775 $ — $ 264,526 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 38,151 $ 55,570 $ 98,686 $ 165,908 $ 232,105 $ 241,674 $ — $ 4,937 $ 837,031 Special Mention — — — 291 1,555 1,036 — 316 3,198 Substandard — — 232 131 4,158 4,753 — 705 9,979 Doubtful/Loss — — — — — — — — — Total $ 38,151 $ 55,570 $ 98,918 $ 166,330 $ 237,818 $ 247,463 $ — $ 5,958 $ 850,208 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR HELOCs and junior liens risk ratings Pass $ 909 $ — $ — $ — $ — $ 60 $ 370,873 $ 5,663 $ 377,505 Special Mention — — — — — 1 6,877 449 7,327 Substandard — — — — — — 5,115 397 5,512 Doubtful/Loss — — — — — — — — — Total $ 909 $ — $ — $ — $ — $ 61 $ 382,865 $ 6,509 $ 390,344 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: Other risk ratings Pass $ 2,791 $ 6,242 $ 16,998 $ 4,864 $ 4,847 $ 9,946 $ 583 $ — $ 46,271 Special Mention — — 350 31 275 153 30 — 839 Substandard 6 66 247 292 145 271 2 — 1,029 Doubtful/Loss — — — — — — — — — Total $ 2,797 $ 6,308 $ 17,595 $ 5,187 $ 5,267 $ 10,370 $ 615 $ — $ 48,139 Year-to-date gross charge-offs $ 234 $ 59 $ 15 $ — $ — $ 4 $ 5 $ — $ 317 18 Table of Contents Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2025 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2025 2024 2023 2022 2021 Prior Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 30,259 $ 48,377 $ 45,473 $ 64,950 $ 44,046 $ 8,818 $ 213,219 $ 99 $ 455,241 Special Mention 81 308 879 1,539 525 9 2,776 — 6,117 Substandard — 206 66 392 770 281 4,292 47 6,054 Doubtful/Loss — — — 56 96 — — — 152 Total $ 30,340 $ 48,891 $ 46,418 $ 66,937 $ 45,437 $ 9,108 $ 220,287 $ 146 $ 467,564 Year-to-date gross charge-offs $ 198 $ 95 $ — $ — $ — $ — $ 8,348 $ — $ 8,641 Construction loans: Construction risk ratings Pass $ 9,339 $ 63,699 $ 131,262 $ 71,438 $ 13,897 $ 13,371 $ — $ — $ 303,006 Special Mention — — — — — — — — — Substandard — — — 885 529 500 — — 1,914 Doubtful/Loss — — — — — — — — — Total $ 9,339 $ 63,699 $ 131,262 $ 72,323 $ 14,426 $ 13,871 $ — $ — $ 304,920 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agriculture production loans: Agriculture production risk ratings Pass $ 606 $ 907 $ 1,248 $ 1,797 $ 581 $ 6,696 $ 143,967 $ — $ 155,802 Special Mention — — — — — 191 2,605 — 2,796 Substandard — — — 93 292 33 2,441 — 2,859 Doubtful/Loss — — — — — — — — — Total $ 606 $ 907 $ 1,248 $ 1,890 $ 873 $ 6,920 $ 149,013 $ — $ 161,457 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 11 $ — $ — $ 11 Leases: Lease risk ratings Pass $ 5,629 $ — $ — $ — $ — $ — $ — $ — $ 5,629 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 5,629 $ — $ — $ — $ — $ — $ — $ — $ 5,629 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Total loans outstanding: Risk ratings Pass $ 336,270 $ 537,363 $ 593,218 $ 1,117,094 $ 1,049,784 $ 2,085,609 $ 1,020,968 $ 10,699 $ 6,751,005 Special Mention 471 445 12,174 17,526 9,531 13,110 19,193 765 73,215 Substandard 6 1,695 4,398 17,903 35,952 44,480 29,038 1,149 134,621 Doubtful/Loss — — — 56 96 — — — 152 Total $ 336,747 $ 539,503 $ 609,790 $ 1,152,579 $ 1,095,363 $ 2,143,199 $ 1,069,199 $ 12,613 $ 6,958,993 Year-to-date gross charge-offs $ 432 $ 154 $ 15 $ — $ — $ 15 $ 8,353 $ — $ 8,969 19 Table of Contents Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2024 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2024 2023 2022 2021 2019 Prior Commercial real estate: CRE non-owner occupied risk ratings Pass $ 184,623 $ 177,650 $ 408,129 $ 282,953 $ 152,278 $ 909,735 $ 163,628 $ — $ 2,278,996 Special Mention — 836 1,688 — — 24,840 506 — 27,870 Substandard — — — — — 16,170 — — 16,170 Doubtful/Loss — — — — — — — — — Total $ 184,623 $ 178,486 $ 409,817 $ 282,953 $ 152,278 $ 950,745 $ 164,134 $ — $ 2,323,036 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: CRE owner occupied risk ratings Pass $ 83,320 $ 75,804 $ 191,619 $ 177,134 $ 104,490 $ 254,282 $ 35,961 $ — $ 922,610 Special Mention 1,618 — 2,699 1,731 206 11,950 — — 18,204 Substandard — 242 7,798 5,380 3,490 3,644 47 — 20,601 Doubtful/Loss — — — — — — — — — Total $ 84,938 $ 76,046 $ 202,116 $ 184,245 $ 108,186 $ 269,876 $ 36,008 $ — $ 961,415 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Multifamily risk ratings Pass $ 65,376 $ 27,904 $ 171,470 $ 294,317 $ 117,889 $ 289,229 $ 44,816 $ — $ 1,011,001 Special Mention — — — 11,926 — 207 3,393 — 15,526 Substandard — — 480 — 554 474 — — 1,508 Doubtful/Loss — — — — — — — — — Total $ 65,376 $ 27,904 $ 171,950 $ 306,243 $ 118,443 $ 289,910 $ 48,209 $ — $ 1,028,035 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Farmland risk ratings Pass $ 23,780 $ 18,205 $ 45,582 $ 20,832 $ 15,066 $ 36,909 $ 44,083 $ — $ 204,457 Special Mention — — 2,057 7,944 47 3,764 1,356 — 15,168 Substandard — 2,770 — 20,414 — 10,416 11,921 — 45,521 Doubtful/Loss — — — — — — — — — Total $ 23,780 $ 20,975 $ 47,639 $ 49,190 $ 15,113 $ 51,089 $ 57,360 $ — $ 265,146 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 60,203 $ 113,467 $ 173,217 $ 241,388 $ 115,915 $ 137,361 $ — $ 3,952 $ 845,503 Special Mention — — 60 — — 892 — 239 1,191 Substandard — 244 137 3,467 2,092 6,393 — 633 12,966 Doubtful/Loss — — — — — — — — — Total $ 60,203 $ 113,711 $ 173,414 $ 244,855 $ 118,007 $ 144,646 $ — $ 4,824 $ 859,660 Period end gross write-offs $ — $ 27 $ — $ — $ — $ — $ — $ — $ 27 20 Table of Contents Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2024 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2024 2023 2022 2021 2019 Prior Consumer loans: SFR HELOCs and junior liens risk ratings Pass $ 236 $ — $ — $ — $ — $ 68 $ 345,902 $ 5,799 $ 352,005 Special Mention — — — — — 4 6,082 327 6,413 Substandard — — — — — — 4,579 423 5,002 Doubtful/Loss — — — — — — — — — Total $ 236 $ — $ — $ — $ — $ 72 $ 356,563 $ 6,549 $ 363,420 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ 41 $ — $ 41 Consumer loans: Other risk ratings Pass $ 10,371 $ 21,746 $ 5,891 $ 6,059 $ 4,917 $ 6,991 $ 610 $ — $ 56,585 Special Mention — 63 34 227 107 41 21 — 493 Substandard 37 152 304 111 2 294 1 — 901 Doubtful/Loss — — — — — — — — — Total $ 10,408 $ 21,961 $ 6,229 $ 6,397 $ 5,026 $ 7,326 $ 632 $ — $ 57,979 Period end gross write-offs $ 385 $ 88 $ 40 $ 74 $ 37 $ 108 $ 14 $ — $ 746 Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 73,321 $ 49,921 $ 61,634 $ 48,255 $ 3,721 $ 8,463 $ 203,978 $ 150 $ 449,443 Special Mention 137 775 1,970 63 275 851 3,197 — 7,268 Substandard 272 35 682 728 — 596 12,200 47 14,560 Doubtful/Loss — — — — — — — — — Total $ 73,730 $ 50,731 $ 64,286 $ 49,046 $ 3,996 $ 9,910 $ 219,375 $ 197 $ 471,271 Period end gross write-offs $ 389 $ — $ 178 $ 95 $ 24 $ — $ 1,101 $ — $ 1,787 Construction loans: Construction risk ratings Pass $ 36,031 $ 124,759 $ 80,269 $ 11,354 $ 6,714 $ 7,359 $ — $ — $ 266,486 Special Mention — — 13,390 — — — — — 13,390 Substandard — — — — — 57 — — 57 Doubtful/Loss — — — — — — — — — Total $ 36,031 $ 124,759 $ 93,659 $ 11,354 $ 6,714 $ 7,416 $ — $ — $ 279,933 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agriculture production loans: Agriculture production risk ratings Pass $ 265 $ 1,434 $ 2,297 $ 905 $ 175 $ 7,477 $ 133,115 $ — $ 145,668 Special Mention — — — — 2 218 5,192 — 5,412 Substandard — — 138 485 107 12 — — 742 Doubtful/Loss — — — — — — — — — Total $ 265 $ 1,434 $ 2,435 $ 1,390 $ 284 $ 7,707 $ 138,307 $ — $ 151,822 Period end gross write-offs $ — $ — $ 173 $ — $ — $ — $ 1,277 $ — $ 1,450 21 Table of Contents Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2024 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2024 2023 2022 2021 2019 Prior Leases: Lease risk ratings Pass $ 6,806 $ — $ — $ — $ — $ — $ — $ — $ 6,806 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 6,806 $ — $ — $ — $ — $ — $ — $ — $ 6,806 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Total loans outstanding: Risk ratings Pass $ 544,332 $ 610,890 $ 1,140,108 $ 1,083,197 $ 521,165 $ 1,657,874 $ 972,093 $ 9,901 $ 6,539,560 Special Mention 1,755 1,674 21,898 21,891 637 42,767 19,747 566 110,935 Substandard 309 3,443 9,539 30,585 6,245 38,056 28,748 1,103 118,028 Doubtful/Loss — — — — — — — — — Total $ 546,396 $ 616,007 $ 1,171,545 $ 1,135,673 $ 528,047 $ 1,738,697 $ 1,020,588 $ 11,570 $ 6,768,523 Period end gross write-offs $ 774 $ 115 $ 391 $ 169 $ 61 $ 108 $ 2,433 $ — $ 4,051 The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated: Analysis of Past Due Loans - As of June 30, 2025 (in thousands) 30-59 days 60-89 days > 90 days Total Past Due Loans Current Total Commercial real estate: CRE non-owner occupied $ 4,871 $ 33 $ 3,009 $ 7,913 $ 2,431,036 $ 2,438,949 CRE owner occupied 1,513 — 5,155 6,668 990,537 997,205 Multifamily 460 — — 460 1,029,592 1,030,052 Farmland — — 14,339 14,339 250,187 264,526 Total commercial real estate loans 6,844 33 22,503 29,380 4,701,352 4,730,732 Consumer: SFR 1-4 1st DT liens 118 132 1,079 1,329 848,879 850,208 SFR HELOCs and junior liens 2,926 818 1,749 5,493 384,851 390,344 Other 119 64 170 353 47,786 48,139 Total consumer loans 3,163 1,014 2,998 7,175 1,281,516 1,288,691 Commercial and industrial 491 230 1,183 1,904 465,660 467,564 Construction — 529 1,334 1,863 303,057 304,920 Agriculture production — — 2,643 2,643 158,814 161,457 Leases — — — — 5,629 5,629 Total $ 10,498 $ 1,806 $ 30,661 $ 42,965 $ 6,916,028 $ 6,958,993 22 Table of Contents Analysis of Past Due Loans - As of December 31, 2024 (in thousands) 30-59 days 60-89 days > 90 days Total Past Due Loans Current Total Commercial real estate: CRE non-owner occupied $ 221 $ — $ 2,452 $ 2,673 $ 2,320,363 $ 2,323,036 CRE owner occupied 1,625 85 3,619 5,329 956,086 961,415 Multifamily 1,120 — — 1,120 1,026,915 1,028,035 Farmland 2,686 113 6,145 8,944 256,202 265,146 Total commercial real estate loans 5,652 198 12,216 18,066 4,559,566 4,577,632 Consumer: SFR 1-4 1st DT liens — 6 1,556 1,562 858,098 859,660 SFR HELOCs and junior liens 201 852 1,078 2,131 361,289 363,420 Other 50 — 132 182 57,797 57,979 Total consumer loans 251 858 2,766 3,875 1,277,184 1,281,059 Commercial and industrial 537 308 9,257 10,102 461,169 471,271 Construction — — — — 279,933 279,933 Agriculture production 37 317 314 668 151,154 151,822 Leases — — — — 6,806 6,806 Total $ 6,477 $ 1,681 $ 24,553 $ 32,711 $ 6,735,812 $ 6,768,523 The following table shows the ending balance of non accrual loans by loan category as of the date indicated: Non Accrual Loans As of June 30, 2025 As of December 31, 2024 (in thousands) Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Commercial real estate: CRE non-owner occupied $ 3,548 $ 3,548 $ — $ 3,017 $ 3,017 $ — CRE owner occupied 6,676 6,676 — 3,632 3,874 — Multifamily 460 460 — 480 480 — Farmland 27,017 35,811 — 12,483 16,195 — Total commercial real estate loans 37,701 46,495 — 19,612 23,566 — Consumer: SFR 1-4 1st DT liens 5,567 6,376 — 5,979 5,979 — SFR HELOCs and junior liens 4,268 4,786 — 3,370 3,868 — Other 111 318 — 41 204 — Total consumer loans 9,946 11,480 — 9,390 10,051 — Commercial and industrial 899 1,700 198 830 9,707 59 Construction 1,914 1,914 — 57 57 — Agriculture production 1,988 2,996 — — 656 — Leases — — — — — — Sub-total 52,448 64,585 198 29,889 44,037 59 Less: Guaranteed loans ( 1,051 ) ( 1,082 ) — ( 828 ) ( 816 ) — Total, net $ 51,397 $ 63,503 $ 198 $ 29,061 $ 43,221 $ 59 Interest income on non accrual loans that would have been recognized during the three months ended June 30, 2025 and 2024, if all such loans had been current in accordance with their original terms, totaled $ 2.1 million and $ 0.6 million, respectively. Interest income actually recognized on these originated loans during the three months ended June 30, 2025 and 2024 was $ 0.3 million and zero , respectively. 23 Table of Contents The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods: As of June 30, 2025 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR-1st Deed SFR-2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 3,009 $ 345 $ — $ 194 $ — $ — $ — $ — $ — $ — $ — $ 3,548 CRE owner occupied 6,341 243 — 91 — — — — — — — 6,675 Multifamily — — — — 460 — — — — — — 460 Farmland — — — — — 35,811 — — — — — 35,811 Total commercial real estate loans 9,350 588 — 285 460 35,811 — — — — — 46,494 Consumer: SFR 1-4 1st DT liens — — — — — — 6,376 — — — — 6,376 SFR HELOCs and junior liens — — — — — — 1,643 2,923 — — — 4,566 Other — — — — — — — — 311 — — 311 Total consumer loans — — — — — — 8,019 2,923 311 — — 11,253 Commercial and industrial — — — — — — — — — 727 973 1,700 Construction — — — 1,414 — — 500 — — — — 1,914 Agriculture production — — — 202 — 2,441 — — — — 353 2,996 Leases — — — — — — — — — — — — Total $ 9,350 $ 588 $ — $ 1,901 $ 460 $ 38,252 $ 8,519 $ 2,923 $ 311 $ 727 $ 1,326 $ 64,357 As of December 31, 2024 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR -1st Deed SFR -2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 2,452 $ 356 $ — $ 210 $ — $ — $ — $ — $ — $ — $ — $ 3,018 CRE owner occupied — 260 142 3,472 — — — — — — — 3,874 Multifamily — — — — 480 — — — — — — 480 Farmland — — — — — 16,448 — — — — — 16,448 Total commercial real estate loans 2,452 616 142 3,682 480 16,448 — — — — — 23,820 Consumer: SFR 1-4 1st DT liens — — — — — — 5,979 — — — — 5,979 SFR HELOCs and junior liens — — — — — — 1,291 2,079 — — — 3,370 Other — — — — — — — — 132 — — 132 Total consumer loans — — — — — — 7,270 2,079 132 — — 9,481 Commercial and industrial — — — 8,334 — — — 54 — 530 788 9,706 Construction — — — — — — 57 — — — — 57 Agriculture production — — — — — — — — — — 12 12 Leases — — — — — — — — — — — — Total $ 2,452 $ 616 $ 142 $ 12,016 $ 480 $ 16,448 $ 7,327 $ 2,133 $ 132 $ 530 $ 800 $ 43,076 24 Table of Contents Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearance, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following tables show the amortized cost basis of loans that were both experiencing financial difficulty and modified during the periods presented. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivables is also presented below. For the three months ended June 30, 2025 June 30, 2024 (in thousands) Combination - Term Extension/Rate Change Payment Delay/Term Extension Total % of Loans Outstanding Payment Delay/Term Extension Payment Delay/Term Reduction Total % of Loans Outstanding Multifamily $ — $ — — % $ 295 $ — n/m Commercial and industrial — — — 166 — n/m Total $ — $ — — % $ 461 $ — 0.01 % For the six months ended June 30, 2025 June 30, 2024 (in thousands) Combination - Term Extension/Rate Change Payment Delay/Term Extension Total % of Loans Outstanding Payment Delay/Term Extension Combination - Term Extension/Rate Change Total % of Loans Outstanding Commercial real estate: CRE non-owner occupied $ — $ — — % $ — $ 211 n/m Multifamily — — — 295 — n/m SFR HELOCs and junior liens — — — 41 — n/m Commercial and industrial — — — 682 — 0.01 % Total $ — $ — — % $ 1,018 $ 211 0.02 % There were no significant loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2025. For the three months ended June 30, 2024: Modification Type Loan Type Financial Effect Payment delay / term extension Multifamily Added 12 months to the life of the loan Payment delay / term extension Commercial and industrial Added a weighted average 60 months to the life of the loans For the six months ended June 30, 2024: Modification Type Loan Type Financial Effect Combination - term extension / rate change CRE non-owner occupied Added 120 months to the life of the loan; converted from variable to fixed interest rate Payment delay / term extension SFR HELOCs and junior liens Added 60 months to the life of the loan Payment delay / term extension Commercial and industrial Added a weighted average 53 months to the life of the loans During the six months ended June 30, 2025 and June 30, 2024, respectively, there were no loans with payment defaults by borrowers experiencing financial difficulty which had material modifications in rate, term or principal forgiveness during the twelve months prior to default. Note 5 - Leases The Company records a ROUA on the consolidated balance sheets for those leases that convey rights to control use of identified assets for a period of time in exchange for consideration. The Company also records a lease liability on the consolidated balance sheets for the present value of future payment commitments. All of the Company’s leases are comprised of operating leases in which the Company is lessee of real estate property for branches, ATM locations, and general administration and operations. The Company has elected not to include short-term leases (i.e. leases with initial terms of 12 month or less) within the ROUA and lease liability. 25 Table of Contents The following table presents the components of lease expense for the periods ended: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Operating lease cost $ 1,401 $ 1,463 $ 2,818 $ 2,897 Short-term lease cost 49 55 95 107 Variable lease cost (income) ( 6 ) 10 ( 16 ) 23 Total lease cost $ 1,444 $ 1,528 $ 2,897 $ 3,027 The following table presents supplemental cash flow information related to leases for the periods ended: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,486 $ 1,579 $ 2,996 $ 3,147 ROUA obtained in exchange for operating lease liabilities $ 535 $ 99 $ 1,006 $ 1,426 The following table presents the weighted average operating lease term and discount rate as of the period ended: June 30, 2025 2024 Weighted-average remaining lease term (years) 7.3 7.9 Weighted-average discount rate 3.58 % 3.45 % At June 30, 2025, future expected operating lease payments are as follows: (in thousands) Periods ending December 31, 2025 $ 2,838 2026 5,290 2027 4,632 2028 3,366 2029 2,396 Thereafter 8,807 27,329 Discount for present value of expected cash flows ( 3,364 ) Lease liability at June 30, 2025 $ 23,965 Note 6 - Deposits A summary of the balances of deposits follows: (in thousands) June 30, 2025 December 31, 2024 Noninterest-bearing demand $ 2,559,788 $ 2,548,613 Interest-bearing demand 1,826,041 1,758,629 Savings 2,879,212 2,657,849 Time certificates, $250,000 or more 626,250 485,180 Other time certificates 484,518 637,305 Total deposits $ 8,375,809 $ 8,087,576 Certificate of deposit balances of $ 100.0 million from the State of California were included in time certificates, $250,000 or more, at June 30, 2025 and December 31, 2024, respectively. The Company participates in a deposit program offered by the State of California whereby the State may make deposits at the Company’s request subject to collateral and credit worthiness constraints. The negotiated rates on these State deposits are generally more favorable than other wholesale funding sources available to the Company. Overdrawn deposit balances of $ 1.9 million and $ 2.5 million were classified as consumer loans at June 30, 2025 and December 31, 2024, respectively. 26 Table of Contents Note 7 - Other Borrowings A summary of the balances of other borrowings follows: June 30, 2025 December 31, 2024 (in thousands) Term borrowing at FHLB, fixed rate of 5.23 %, payable on April 8, 2025 — 75,000 Other collateralized borrowings, fixed rate, as of June 30, 2025 and December 31, 2024 of 0.05 %, payable on July 1, 2025 and January 2, 2025, respectively 17,788 14,610 Total other borrowings $ 17,788 $ 89,610 Note 8 - Junior Subordinated Debt The following table summarizes the terms and recorded balances of each debenture as of the date indicated: (in thousands) Coupon Rate (Variable) 3 mo. SOFR + As of June 30, 2025 As of December 31, 2024 Subordinated Debt Series Maturity Date Face Value Current Coupon Rate Recorded Book Value Recorded Book Value TriCo Cap Trust I 10/7/2033 $ 20,619 3.05 % 7.57 % $ 20,619 $ 20,619 TriCo Cap Trust II 7/23/2034 20,619 2.55 % 7.09 % 20,619 20,619 North Valley Trust II 4/24/2033 6,186 3.25 % 7.79 % 5,774 5,713 North Valley Trust III 7/23/2034 5,155 2.80 % 7.34 % 4,625 4,571 North Valley Trust IV 3/15/2036 10,310 1.33 % 5.91 % 8,003 7,863 VRB Subordinated 3/29/2029 16,000 3.52 % 9.11 % 16,700 16,799 VRB Subordinated - 5 % 8/27/2035 20,000 Fixed 5.00 % 24,924 25,007 $ 98,889 $ 101,264 $ 101,191 The VRB - 5 % Subordinated Debt issuance is fixed at 5.0 % through August 27, 2025, then will have a floating rate of 90-day average SOFR plus 4.9 % until maturity. Note 9 - Commitments and Contingencies The following table presents a summary of the Bank’s commitments and contingent liabilities: (in thousands) June 30, 2025 December 31, 2024 Financial instruments whose amounts represent risk: Commitments to extend credit: Commercial loans $ 840,046 $ 788,491 Consumer loans 613,922 627,681 Real estate mortgage loans 432,669 419,172 Real estate construction loans 234,467 272,308 Standby letters of credit 39,149 39,804 Deposit account overdraft privilege 128,990 121,006 In April 2024, Visa Inc. announced the commencement of an exchange offer for Visa Class B-1 common stock and the Company subsequently tendered all of its Visa Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock. Completion of the exchange resulted in a gain of $ 2.9 million relating to the Visa Class C common stock during 2024. Visa Class B-2 common stock continues to be carried at zero. The Bank owns 6,698 shares of Class B-2 common stock of Visa Inc. which may be convertible into Class A common stock at a conversion ratio of 1.5342 per Class B-2 share. As of June 30, 2025, the value of the Class A shares was $ 355.05 per share. Utilizing the conversion ratio, the value of unredeemed Class A equivalent shares owned by the Bank was $ 3.6 million as of June 30, 2025, and has not been reflected in the accompanying consolidated financial statements. 27 Table of Contents Note 10 - Shareholders’ Equity Dividends Paid The Bank paid to the Company cash dividends in the aggregate amounts of $ 28.5 million and $ 23.4 million during the three months ended June 30, 2025 and 2024, respectively, and during the equivalent six month periods paid $ 40.6 million and $ 43.9 million, respectively. The Bank is regulated by the FDIC and the DFPI. Absent approval from the Commissioner of the DFPI, California banking laws generally limit the Bank’s ability to pay dividends to the lesser of (1) retained earnings or (2) net income for the last three fiscal years, less cash distributions paid during such period. Stock Repurchase Plan On February 25, 2021, the Board of Directors authorized the repurchase of up to 2.0 million shares of the Company's common stock (the 2021 Repurchase Plan), which approximated 6.7 % of the shares outstanding as of the approval date. The actual timing of any share repurchases can be determined by the Company's management and therefore the total value of the shares to be purchased under the 2021 Repurchase Plan is subject to change. The 2021 Repurchase Plan has no expiration date (in accordance with applicable laws and regulations). During the three and six months ended June 30, 2025, the Company repurchased 379,978 and 469,632 shares with market values of $ 15.2 million and $ 18.9 million, respectively. During the three and six months ended and June 30, 2024, the Company repurchased 244,992 and 344,324 shares with market values of $ 9.1 million and $ 12.5 million, respectively. As of June 30, 2025, approximately 360,000 shares remain authorized for repurchase. Stock Repurchased Under Equity Compensation Plans The Company's shareholder-approved equity compensation plans permit employees to tender recently vested shares in lieu of cash for the payment of exercise price, if applicable, and the tax withholding on such shares. There were no option exercises during the three and six months ended June 30, 2025 and June 30, 2024, respectively. Employees tendered 11,542 and 30,510 shares in connection with the tax withholding requirements of other share-based awards during the three months ended June 30, 2025 and 2024, respectively, and 21,664 and 30,510 during the six months ended June 30, 2025 and 2024, respectively. In total, shares of the Company's common stock tendered had market values of $ 0.5 million and $ 1.1 million during the quarters ended June 30, 2025 and 2024, respectively, and $ 0.9 million and $ 1.1 million during the respective six-month periods. The tendered shares were retired. The market value of tendered shares is the last market trade price at closing on the day an option is exercised or the other share-based award vests. Stock repurchased under equity incentive plans are not included in the total of stock repurchased under the 2021 Stock Repurchase Plans. Note 11 - Stock Options and Other Equity-Based Incentive Instruments On April 16, 2024, the Board of Directors adopted the 2024 Equity Incentive Plan (2024 Plan) which was approved by shareholders on May 23, 2024. The 2024 Plan allows for up to 1,200,000 shares to be issued in connection with equity-based incentives. In conjunction with shareholder approval of the 2024 Plan, the 2019 Equity Incentive Plan (2019 Plan), which allowed for up to 1,500,000 shares to be issued in connection with equity-based incentives, is no longer available for grant issuances. While no new awards can be granted under the 2019 Plan, existing grants continue to be governed by the terms, conditions and procedures set forth in any applicable award agreement. There were no stock options outstanding as of June 30, 2025 and December 31, 2024 . The Company did not modify any option grants during the six months ended June 30, 2025 or 2024. Activity related to restricted stock unit awards during the six months ended June 30, 2025 is summarized in the following table: Service Condition Vesting RSUs Market Plus Service Condition Vesting RSUs Outstanding at December 31, 2024 152,572 144,715 RSUs granted 79,575 51,177 RSUs added through dividend and performance credits 2,382 — RSUs released ( 71,135 ) — RSUs forfeited ( 6,647 ) ( 6,838 ) Outstanding at June 30, 2025 156,747 189,054 28 Table of Contents The 156,747 of service condition vesting RSUs outstanding as of June 30, 2025 include a feature whereby each RSU outstanding is credited with a dividend amount equal to any common stock cash dividend declared and paid, and the credited amount is divided by the closing price of the Company’s stock on the dividend payable date to arrive at an additional amount of RSUs outstanding under the original grant. The dividend credits follow the same vesting requirements as the RSU awards and are not considered participating securities. The 156,747 of service condition vesting RSUs outstanding as of June 30, 2025 are expected to vest, and be released, on a weighted-average basis, over the next 1.87 years. The Company expects to recognize $ 4.8 million of pre-tax compensation costs related to these service condition vesting RSUs between June 30, 2025 and their vesting dates. The Company did not modify any service condition vesting RSUs during the six months ended June 30, 2025 or 2024. The 189,054 of market plus service condition vesting RSUs outstanding as of June 30, 2025 are expected to vest, and be released, on a weighted-average basis, over the next 2.04 years. The Company expects to recognize $ 2.5 million of pre-tax compensation costs related to these RSUs between June 30, 2025 and their vesting dates. As of June 30, 2025, the number of market plus service condition vesting RSUs outstanding that will actually vest, and be released, may be reduced to zero or increased to 283,581 depending on the total return of the Company’s common stock versus the total return of an index of bank stocks from the grant date to the vesting date. The Company did not modify any market plus service condition vesting RSUs during the six months ended June 30, 2025 or 2024. Note 12 - Non-interest Income and Expense The following tables summarize the Company’s non-interest income for the periods indicated: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 ATM and interchange fees $ 6,590 $ 6,372 $ 12,696 $ 12,541 Service charges on deposit accounts 5,189 4,847 10,103 9,510 Other service fees 1,485 1,286 2,844 2,652 Mortgage banking service fees 438 438 877 866 Change in value of mortgage servicing rights ( 52 ) ( 147 ) ( 192 ) ( 136 ) Total service charges and fees 13,650 12,796 26,328 25,433 Increase in cash value of life insurance 842 831 1,662 1,634 Asset management and commission income 1,635 1,359 3,123 2,487 Gain on sale of loans 503 388 847 649 Lease brokerage income 50 154 116 315 Sale of customer checks 318 301 663 613 Gain (loss) on sale or exchange of investment securities 4 ( 45 ) ( 1,142 ) ( 45 ) Gain (loss) on marketable equity securities 8 ( 121 ) 47 ( 149 ) Other 80 203 1,519 700 Total other non-interest income 3,440 3,070 6,835 6,204 Total non-interest income $ 17,090 $ 15,866 $ 33,163 $ 31,637 29 Table of Contents The following tables summarize the Company’s non-interest expense for the periods indicated: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Base salaries, net of deferred loan origination costs $ 25,757 $ 23,852 $ 51,158 $ 47,872 Incentive compensation 5,223 4,711 9,261 7,968 Benefits and other compensation costs 7,306 6,838 14,722 13,865 Total salaries and benefits expense 38,286 35,401 75,141 69,705 Occupancy 4,200 4,063 8,277 8,014 Data processing and software 4,959 5,094 10,017 10,201 Equipment 1,189 1,330 2,473 2,686 Intangible amortization 483 1,030 997 2,060 Advertising 808 819 2,012 1,581 ATM and POS network charges 1,843 1,987 3,694 3,648 Professional fees 1,667 1,814 3,185 3,154 Telecommunications 513 558 1,001 1,069 Regulatory assessments and insurance 1,297 1,144 2,580 2,395 Postage 385 340 705 648 Operational losses 270 244 694 596 Courier service 544 559 1,032 1,039 Loss (gain) on sale or acquisition of foreclosed assets — — ( 3 ) ( 38 ) Loss (gain) on disposal of fixed assets 5 1 90 6 Other miscellaneous expense 4,682 3,955 8,821 8,079 Total other non-interest expense 22,845 22,938 45,575 45,138 Total non-interest expense $ 61,131 $ 58,339 $ 120,716 $ 114,843 Note 13 - Earnings Per Share Basic earnings per share represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustments to income that would result from assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock options and restricted stock units (RSUs), and are determined using the treasury stock method. Earnings per share have been computed based on the following: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Net income $ 27,542 $ 29,034 $ 53,905 $ 56,783 Weighted average number of common shares outstanding 32,757 33,121 32,854 33,183 Effect of dilutive stock options and restricted stock 179 123 179 123 Weighted average number of common shares outstanding used to calculate diluted earnings per share 32,936 33,244 33,033 33,306 Note 14 – Comprehensive Income (Loss) Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet identified as AOCI, such items, along with net income, are components of OCI. 30 Table of Contents The components of OCI and related tax effects are as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Unrealized holding gains (losses) on available for sale securities before reclassifications $ 12,792 $ 1,106 $ 43,018 $ ( 14,793 ) Amounts reclassified out of AOCI: Realized gain (loss) on debt securities ( 4 ) 2,945 1,142 2,945 Total amounts reclassified out of accumulated other comprehensive income (loss) ( 4 ) — 1,142 — Unrealized holding gains (losses) on available for sale securities after reclassifications 12,788 4,051 44,160 ( 11,848 ) Tax effect ( 3,780 ) ( 1,199 ) ( 13,054 ) 3,502 Unrealized holding gains (losses) on available for sale securities, net of tax 9,008 2,852 31,106 ( 8,346 ) Change in unfunded status of the supplemental retirement plans before reclassifications 164 115 328 230 Amounts reclassified out of AOCI: Amortization of actuarial losses ( 164 ) ( 115 ) ( 328 ) ( 230 ) Total amounts reclassified out of accumulated other comprehensive loss ( 164 ) ( 115 ) ( 328 ) ( 230 ) Total other comprehensive income (loss) $ 9,008 $ 2,852 $ 31,106 $ ( 8,346 ) The components of AOCI, included in shareholders’ equity, are as follows: (in thousands) June 30, 2025 December 31, 2024 Net unrealized loss on available for sale securities $ ( 189,488 ) $ ( 233,648 ) Tax effect 56,021 69,075 Unrealized holding loss on available for sale securities, net of tax ( 133,467 ) ( 164,573 ) Unfunded status of the supplemental retirement plans 16,085 16,085 Tax effect ( 4,756 ) ( 4,756 ) Unfunded status of the supplemental retirement plans, net of tax 11,329 11,329 Joint beneficiary agreement liability 782 782 Tax effect — — Joint beneficiary agreement liability, net of tax 782 782 Accumulated other comprehensive loss $ ( 121,356 ) $ ( 152,462 ) Note 15 - Fair Value Measurement The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, income approach, and/or the cost approach. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance. Marketable equity securities, trading securities, debt securities available-for-sale, loans held for sale, and mortgage servicing rights are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application impairment write-downs of individual assets. The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observable nature of the assumptions used to determine fair value. These levels are: Level 1 - Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 - Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. 31 Table of Contents Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. Marketable equity securities, trading securities and debt securities available for sale - Marketable equity, trading and debt securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. The Company had no securities classified as Level 3 during any of the periods covered in these consolidated financial statements. Loans held for sale - Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what secondary markets are currently offering for loans with similar characteristics. As such, we classify those loans subjected to recurring fair value adjustments as Level 2. Individually evaluated loans - Loans are not recorded at fair value on a recurring basis. However, from time to time, certain loans have individual risk characteristics not consistent with a pool of loans and is individually evaluated for credit reserves. Loans for which it is probable that payment of interest and principal will not be made in accordance with the original contractual terms of the loan agreement are typically individually evaluated. The fair value of these loans are estimated using one of several methods, including collateral value, fair value of similar debt, enterprise value, liquidation value and discounted cash flows. Those loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. Loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value which uses substantially observable data, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value, or the appraised value contains a significant unobservable assumption, such as deviations from comparable sales, and there is no observable market price, the Company records the loan as nonrecurring Level 3. Foreclosed assets - Foreclosed assets include assets acquired through, or in lieu of, loan foreclosure. Foreclosed assets are held for sale and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, management periodically performs valuations and the assets are carried at the lower of carrying amount or fair value less cost to sell. When the fair value of foreclosed assets is based on an observable market price or a current appraised value which uses substantially observable data, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value, or the appraised value contains a significant unobservable assumption, such as deviations from comparable sales, and there is no observable market price, the Company records the foreclosed asset as nonrecurring Level 3. Revenue and expenses from operations and changes in the valuation allowance are included in other non-interest expense. Mortgage servicing rights - Mortgage servicing rights are carried at fair value. A valuation model, which utilizes a discounted cash flow analysis using a discount rate and prepayment speed assumptions is used in the computation of the fair value measurement. While the prepayment speed assumption is currently quoted for comparable instruments, the discount rate assumption currently requires a significant degree of management judgment and is therefore considered an unobservable input. As such, the Company classifies mortgage servicing rights subjected to recurring fair value adjustments as Level 3. The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis (in thousands): Fair value at June 30, 2025 Total Level 1 Level 2 Level 3 Marketable equity securities $ 2,656 $ 2,656 $ — $ — Debt securities available for sale: Obligations of U.S. government and agencies 1,086,082 — 1,086,082 — Obligations of states and political subdivisions 212,571 — 212,571 — Corporate bonds 5,503 — 5,503 — Asset backed securities 263,679 — 263,679 — Non-agency mortgage backed securities 247,541 — 247,541 — Loans held for sale 1,577 — 1,577 — Mortgage servicing rights 6,763 — — 6,763 Total assets measured at fair value $ 1,826,372 $ 2,656 $ 1,816,953 $ 6,763 32 Table of Contents Fair value at December 31, 2024 Total Level 1 Level 2 Level 3 Marketable equity securities $ 2,609 $ 2,609 $ — $ — Debt securities available for sale: Obligations of U.S. government and agencies 1,094,185 — 1,094,185 — Obligations of states and political subdivisions 220,744 — 220,744 — Corporate bonds 5,837 — 5,837 — Asset backed securities 314,263 — 314,263 — Non-agency mortgage backed securities 269,856 — 269,856 — Loans held for sale 709 — 709 — Mortgage servicing rights 6,626 — — 6,626 Total assets measured at fair value $ 1,914,829 $ 2,609 $ 1,905,594 $ 6,626 Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally corresponds with the Company’s quarterly valuation process. There were no transfers between any levels during the six months ended June 30, 2025 or June 30, 2024, respectively. The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the time periods indicated. Had there been any transfer into or out of Level 3 during the time periods indicated, the amount included in the “Transfers into (out of) Level 3” column would represent the beginning balance of an item in the period (interim quarter) during which it was transferred (in thousands): Three months ended June 30, Beginning Balance Transfers into (out of) Level 3 Change Included in Earnings Issuances Ending Balance 2025: Mortgage servicing rights $ 6,614 — $ ( 52 ) $ 201 $ 6,763 2024: Mortgage servicing rights $ 6,697 — $ ( 147 ) $ 116 $ 6,666 Six months ended June 30, Beginning Balance Transfers into (out of) Level 3 Change Included in Earnings Issuances Ending Balance 2025: Mortgage servicing rights $ 6,626 — $ ( 192 ) $ 329 $ 6,763 2024: Mortgage servicing rights $ 6,606 — $ ( 136 ) $ 196 $ 6,666 The key unobservable inputs used in determining the fair value of mortgage servicing rights are mortgage prepayment speeds and the discount rate used to discount cash projected cash flows. Generally, any significant increases in the mortgage prepayment speed and discount rate utilized in the fair value measurement of the mortgage servicing rights will result in a negative fair value adjustments (and decrease in the fair value measurement). Conversely, a decrease in the mortgage prepayment speed and discount rate will result in a positive fair value adjustment (and increase in the fair value measurement). The following table presents quantitative information about recurring Level 3 fair value measurements at June 30, 2025 and December 31, 2024: As of June 30, 2025: Fair Value (in thousands) Valuation Technique Unobservable Inputs Range, Weighted Average Mortgage Servicing Rights $ 6,763 Discounted cash flow Constant prepayment rate 6 % - 11 %; 6.8 % Discount rate 10 % - 14 %; 12 % As of December 31, 2024: Mortgage Servicing Rights $ 6,626 Discounted cash flow Constant prepayment rate 6 % - 11.0 %; 7.0 % Discount rate 10 % - 14 %; 12 % The tables below present the recorded investment in assets and liabilities measured at fair value on a nonrecurring basis, as of the dates indicated, that had a write-down or an additional allowance provided during the periods indicated (in thousands): 33 Table of Contents June 30, 2025 Total Level 1 Level 2 Level 3 Fair value: Collateral dependent loans $ 6,362 — — $ 6,362 Foreclosed assets 267 — — 267 Total assets measured at fair value $ 6,629 — — $ 6,629 December 31, 2024 Total Level 1 Level 2 Level 3 Fair value: Collateral dependent loans $ 8,770 — — $ 8,770 Real estate owned 709 — — 709 Total assets measured at fair value $ 9,479 — — $ 9,479 The tables below present the losses resulting from non-recurring fair value adjustments of assets and liabilities for the periods indicated (in thousands): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Collateral dependent loans $ 2,485 $ 435 $ 7,498 $ 307 Foreclosed assets 3 — 3 224 Total losses from non-recurring measurements $ 2,488 $ 435 $ 7,501 $ 531 The individually evaluated loan amounts above represent collateral dependent loans that have been adjusted to fair value. When the Company identifies a collateral dependent loan with unique risk characteristics, the Company evaluates the need for an allowance using the current fair value of the collateral, less selling costs. Depending on the characteristics of a loan, the fair value of collateral is generally estimated by obtaining external appraisals. If the Company determines that the value of the loan is less than the recorded investment in the loan, the Company recognizes this impairment and adjust the carrying value of the loan to fair value through the allowance for credit losses. The loss represents charge-offs or impairments on collateral dependent loans for fair value adjustments based on the fair value of collateral. The carrying value of loans fully charged-off is zero . The foreclosed assets amount above represents impaired real estate that has been adjusted to fair value. Foreclosed assets represent real estate which the Company has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at fair value less costs to sell, which becomes the property’s new basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Fair value adjustments on other real estate owned are recognized within net loss on real estate owned. The loss represents impairments on real estate owned for fair value adjustments based on the fair value of the real estate. The Company’s property appraisals are primarily based on the sales comparison approach and income approach methodologies, which consider recent sales of comparable properties, including their income generating characteristics, and then make adjustments to reflect the general assumptions that a market participant would make when analyzing the property for purchase. These adjustments may increase or decrease an appraised value and can vary significantly depending on the location, physical characteristics and income producing potential of each property. Additionally, the quality and volume of market information available at the time of the appraisal can vary from period to period and cause significant changes to the nature and magnitude of comparable sale adjustments. Given these variations, comparable sale adjustments are generally not a reliable indicator for how fair value will increase or decrease from period to period. Under certain circumstances, management discounts are applied based on specific characteristics of an individual property. The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at June 30, 2025: June 30, 2025 Fair Value (in thousands) Valuation Technique Unobservable Inputs Range, Weighted Average Collateral dependent loans $ 6,362 Sales comparison approach Income approach Adjustment for differences between comparable sales; Capitalization rate Not meaningful N/A Foreclosed assets (Residential real estate) $ 267 Sales comparison approach Adjustment for differences between comparable sales Not meaningful N/A 34 Table of Contents The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2024: December 31, 2024 Fair Value (in thousands) Valuation Technique Unobservable Inputs Range, Weighted Average Collateral dependent loans $ 8,770 Sales comparison approach Income approach Adjustment for differences between comparable sales; Capitalization rate Not meaningful N/A Real estate owned (Residential real estate) $ 709 Sales comparison approach Adjustment for differences between comparable sales Not meaningful N/A Fair values for financial instruments are management’s estimates of the values at which the instruments could be exchanged in a transaction between willing parties. The Company uses the exit price notion when measuring the fair value of financial instruments. These estimates are subjective and may vary significantly from amounts that would be realized in actual transactions. In addition, other significant assets are not considered financial assets including, any mortgage banking operations, deferred tax assets, and premises and equipment. Further, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on the fair value estimates and have not been considered in any of these estimates. June 30, 2025 December 31, 2024 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Level 1 inputs: Cash and due from banks $ 130,147 $ 130,147 $ 85,409 $ 85,409 Cash at Federal Reserve and other banks 184,121 184,121 59,547 59,547 Level 2 inputs: Securities held to maturity 101,672 96,973 111,866 104,349 Restricted equity securities 17,250 n/a 17,250 n/a Level 3 inputs: Loans, net 6,834,538 6,578,926 6,643,157 6,293,727 Financial liabilities: Level 2 inputs: Deposits 8,375,809 8,372,459 8,087,576 8,085,150 Other borrowings 17,788 17,788 89,610 89,780 Level 3 inputs: Junior subordinated debt 101,264 105,760 101,191 103,630 Note 16 - Regulatory Matters The Company is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. The following tables present actual and required capital ratios as of June 30, 2025 and December 31, 2024 for the Company and the Bank under applicable Basel III Capital Rules. The minimum capital amounts presented include the minimum required capital levels as of June 30, 2025 and December 31, 2024 based on the then phased-in provisions of the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules. 35 Table of Contents Actual Required for Capital Adequacy Purposes Required to be Considered Well Capitalized As of June 30, 2025: Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Total Capital (to Risk Weighted Assets): Consolidated $ 1,273,793 15.55 % $ 860,017 10.50 % N/A N/A Tri Counties Bank $ 1,270,480 15.51 % $ 859,817 10.50 % $ 818,873 10.00 % Tier 1 Capital (to Risk Weighted Assets): Consolidated $ 1,134,202 13.85 % $ 696,204 8.50 % N/A N/A Tri Counties Bank $ 1,167,759 14.26 % $ 696,042 8.50 % $ 655,099 8.00 % Common equity Tier 1 Capital (to Risk Weighted Assets): Consolidated $ 1,076,353 13.14 % $ 573,345 7.00 % N/A N/A Tri Counties Bank $ 1,167,759 14.26 % $ 573,211 7.00 % $ 532,268 6.50 % Tier 1 Capital (to Average Assets): Consolidated $ 1,134,202 11.80 % $ 384,347 4.00 % N/A N/A Tri Counties Bank $ 1,167,759 12.16 % $ 384,155 4.00 % $ 480,194 5.00 % Actual Required for Capital Adequacy Purposes Required to be Considered Well Capitalized As of December 31, 2024: Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Total Capital (to Risk Weighted Assets): Consolidated $ 1,258,218 15.71 % $ 840,943 10.50 % N/A N/A Tri Counties Bank $ 1,248,802 15.60 % $ 840,740 10.50 % $ 800,704 10.00 % Tier 1 Capital (to Risk Weighted Assets): Consolidated $ 1,118,292 13.96 % $ 680,763 8.50 % N/A N/A Tri Counties Bank $ 1,148,328 14.34 % $ 680,599 8.50 % $ 640,563 8.00 % Common equity Tier 1 Capital (to Risk Weighted Assets): Consolidated $ 1,060,690 13.24 % $ 560,628 7.00 % N/A N/A Tri Counties Bank $ 1,148,328 14.34 % $ 560,493 7.00 % $ 520,458 6.50 % Tier 1 Capital (to Average Assets): Consolidated $ 1,118,292 11.70 % $ 382,214 4.00 % N/A N/A Tri Counties Bank $ 1,148,328 12.02 % $ 382,096 4.00 % $ 477,620 5.00 % As of June 30, 2025 and December 31, 2024, capital levels at the Company and the Bank exceed all capital adequacy requirements under the Basel III Capital Rules. Also, at June 30, 2025 and December 31, 2024, the Bank’s capital levels exceeded the minimum amounts necessary to be considered well capitalized under the current regulatory framework for prompt corrective action. The Basel III Capital Rules require for all banking organizations to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively composed of common equity tier 1 capital, and it applies to each of the risk-based capital ratios but not the leverage ratio. At June 30, 2025, the Company and the Bank are in compliance with the capital conservation buffer requirement. 36 Table of Contents Note 17 – Segment Information The Company's reportable segment is determined by the Chief Executive Officer, who is designated as the CODM, based upon information provided about the Company's products and services offered, primary banking operations. Segment performance is evaluated using consolidated net income. Information reported internally for performance assessment by the CODM follows, inclusive of reconciliations of the banking segment totals to the financial statements. Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Interest income $ 116,361 $ 117,032 $ 230,438 $ 232,449 Reconciliation of revenue: Other revenues 17,090 15,866 33,163 31,637 Total consolidated revenues 133,451 132,898 263,601 264,086 Less: Interest expense 29,842 35,035 61,377 67,716 Segment net interest income and noninterest income 103,609 97,863 202,224 196,370 Less: Provision for credit losses 4,665 405 8,393 4,710 Salaries and benefits expense 38,286 35,401 75,141 69,705 Other banking segment items 22,845 22,938 45,575 45,138 Provision for income taxes 10,271 10,085 19,210 20,034 Segment net income/consolidated net income $ 27,542 $ 29,034 $ 53,905 $ 56,783 As of June 30, 2025 2024 Reconciliation of assets: Total assets for reportable segment $ 9,923,983 $ 9,741,399 Other assets — — Total consolidated assets $ 9,923,983 $ 9,741,399 37 Table of Contents