Companies: 11,396     total market cap: $150.601 T
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RBB Bancorp
RBB
#7798
Rank
$0.43 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$26.00
Share price
-0.34%
Change (1 day)
34.51%
Change (1 year)
๐Ÿฆ Banks๐Ÿ’ณ Financial services
Categories
  1. RBB Bancorp
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2026 Q3

RBB Bancorp - 10-Q quarterly report FY2026 Q3


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026 or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 001-38149
RBB BANCORP
(Exact name of registrant as specified in its charter)
California27-2776416
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
1055 Wilshire Blvd., Suite 1200,
Los Angeles, California
90017
(Address of principal executive offices)(Zip Code)
(213) 627-9888
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Common Stock, No Par ValueRBBNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerx
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x
Number of shares of common stock of the registrant: 16,712,787 outstanding as of November 2, 2026.

TABLE OF CONTENTS
3
ITEM 1.
3
8
ITEM 2.
42
43
44
46
56
ITEM 3.
76
ITEM 4.
77
79
ITEM 1.
79
ITEM 1A.
79
ITEM 2.
79
ITEM 3.
79
ITEM 4.
79
ITEM 5.
79
ITEM 6.
80
81
2
PART I - FINANCIAL INFORMATION
ITEM 1.           CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
RBB BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
September 30,
2026		December 31,
2025
Assets
Cash and due from banks$24,697 $27,086 
Interest-earning deposits with financial institutions165,593 185,231 
Cash and cash equivalents190,290 212,317 
Interest-earning time deposits in other financial institutions600 600 
Securities:
Available for sale (amortized cost of $411,901 and $426,145 at September 30, 2026 and December 31, 2025)
381,344 407,204 
Held to maturity (fair value of $3,803 and $4,103 at September 30, 2026 and December 31, 2025)
4,179 4,184 
Loans held for sale— 2,067 
Loans held for investment3,399,214 3,314,301 
Allowance for loan losses(44,038)(43,888)
Loans held for investment, net of allowance for loan losses3,355,176 3,270,413 
Premises and equipment, net17,950 23,540 
Federal Home Loan Bank (FHLB) stock15,000 15,000 
Net deferred tax assets18,174 16,347 
Income tax receivable12,754 17,483 
Cash surrender value of bank owned life insurance (BOLI)63,290 61,972 
Goodwill71,498 71,498 
Right-of-use assets - operating leases20,754 23,026 
Accrued interest and other assets100,287 82,643 
Total assets$4,251,296 $4,208,294 
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand$556,848 $526,538 
Savings, NOW and money market accounts1,237,657 956,299 
Time deposits $250,000 and under755,509 974,670 
Time deposits over $250,000845,266 892,891 
Total deposits3,395,280 3,350,398 
FHLB advances180,000 130,000 
Long-term debt, net of issuance costs80,000 119,911 
Subordinated debentures, net15,538 15,375 
Lease liabilities - operating leases22,513 24,800 
Accrued interest and other liabilities23,722 44,400 
Total liabilities3,717,053 3,684,884 
Commitments and contingencies - Note 13
Shareholders' equity:
Preferred Stock - 100,000,000 shares authorized, no par value; none outstanding
— — 
Common Stock - 100,000,000 shares authorized, no par value; 16,827,168 shares issued and outstanding at September 30, 2026 and 17,057,397 shares issued and outstanding at December 31, 2025
248,374 250,694 
Additional paid-in capital3,199 3,941 
Retained earnings303,994 282,024 
Non-controlling interest72 72 
Accumulated other comprehensive loss, net(21,396)(13,321)
Total shareholders’ equity534,243 523,410 
Total liabilities and shareholders’ equity$4,251,296 $4,208,294 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
RBB BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME – (UNAUDITED)
(In thousands, except share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2026		June 30,
2026		September 30,
2025		20262025
Interest and dividend income:
Loans$52,200 $50,663 $50,094 $152,801 $143,402 
Interest-earning deposits2,296 1,708 2,140 5,887 5,904 
Investment securities4,027 4,259 4,592 12,255 12,941 
FHLB stock539 222 327 1,521 981 
Federal funds sold and other245 307 239 805 705 
Total interest and dividend income59,307 57,159 57,392 173,269 163,933 
Interest expense:
Savings deposits, NOW and money market accounts9,045 9,197 4,674 25,589 13,709 
Time deposits14,783 14,397 20,152 45,401 58,486 
Long-term debt and subordinated debentures1,749 2,428 1,635 5,776 4,901 
FHLB advances1,969 1,051 1,654 4,153 4,063 
Total interest expense27,546 27,073 28,115 80,919 81,159 
Net interest income before provision for credit losses31,761 30,086 29,277 92,350 82,774 
Provision for credit losses500 — 625 300 9,758 
Net interest income after provision for credit losses31,261 30,086 28,652 92,050 73,016 
Noninterest income:
Service charges and fees1,110 1,104 1,099 3,246 3,176 
Loan servicing income, net of amortization525 533 564 1,562 1,693 
Increase in cash surrender value of BOLI449 438 427 1,318 1,241 
Gain on sale of loans89 964 260 1,377 699 
(Loss)/gain on other real estate owned— (221)— 669 — 
Other income2,932 200 943 4,202 7,257 
Total noninterest income5,105 3,018 3,293 12,374 14,066 
Noninterest expense:
Salaries and employee benefits11,467 11,045 10,600 33,773 32,323 
Occupancy and equipment expenses2,587 2,449 2,425 7,547 7,209 
Data processing1,722 1,690 1,805 5,120 5,120 
Legal and professional1,306 1,311 1,450 4,120 5,869 
Office expenses394 377 444 1,130 1,257 
Marketing and business promotion193 178 252 586 661 
Insurance and regulatory assessments743 746 732 2,238 2,171 
Core deposit intangible amortization126 127 172 387 516 
Other expenses1,010 1,099 803 2,927 2,572 
Total noninterest expense19,548 19,022 18,683 57,828 57,698 
Income before income taxes16,818 14,082 13,262 46,596 29,384 
Income tax expense4,181 3,942 3,114 12,519 7,613 
Net income$12,637 $10,140 $10,148 $34,077 $21,771 
Net income per share
Basic$0.75 $0.60 $0.59 $2.01 $1.24 
Diluted$0.74 $0.59 $0.59 $1.99 $1.24 
Weighted-average common shares outstanding
Basic16,910,45217,011,62417,225,70216,994,71617,564,835
Diluted17,027,68617,141,74217,301,62717,114,11317,621,599
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
RBB BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – (UNAUDITED)
(In thousands)
Three Months EndedNine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Net income$12,637 $10,140 $10,148 $34,077 $21,771 
Other comprehensive (loss)/income:
Unrealized (loss)/gain on securities available for sale(9,695)(464)2,571 (11,616)8,693 
Related income tax effect2,907 139 (999)3,541 (2,877)
Total other comprehensive (loss)/income(6,788)(325)1,572 (8,075)5,816 
Total comprehensive income$5,849 $9,815 $11,720 $26,002 $27,587 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
RBB BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY – (UNAUDITED)
(In thousands, except share amounts)
Common StockAdditional Paid-in
Capital		Retained EarningsNon- Controlling InterestAccumulated
Other Comprehensive
(Loss)/Income, net		Total
SharesAmount
Balance at June 30, 202616,985,919$250,590 $3,004 $296,119 $72 $(14,608)$535,177 
Net income—— — 12,637 — — 12,637 
Stock-based compensation, net—— 401 — — — 401 
Restricted stock units vested4,017107 (168)— — — (61)
Cash dividends on common stock ($0.16 per share)
—— — (2,741)— — (2,741)
Stock options exercised6,000148 (38)— — — 110 
Repurchase of common stock(168,768)(2,471)— (2,021)— — (4,492)
Other comprehensive loss, net of taxes—— — — — (6,788)(6,788)
Balance at September 30, 202616,827,168$248,374 $3,199 $303,994 $72 $(21,396)$534,243 
Balance at June 30, 202517,699,091$259,863 $3,579 $270,152 $72 $(16,013)$517,653 
Net income—— — 10,148 — — 10,148 
Stock-based compensation, net—— 270 — — — 270 
Restricted stock units vested4,02474 (115)— — — (41)
Cash dividends on common stock ($0.16 per share)
—— — (2,783)— — (2,783)
Stock options exercised—— — — — — — 
Repurchase of common stock(659,218)(9,575)— (2,909)— — (12,484)
Other comprehensive income, net of taxes—— — — — 1,572 1,572 
Balance at September 30, 202517,043,897$250,362 $3,734 $274,608 $72 $(14,441)$514,335 
Common StockAdditional Paid-in
Capital		Retained EarningsNon- Controlling InterestAccumulated
Other Comprehensive
(Loss)/Income, net		Total
SharesAmount
Balance at January 1, 202617,057,397$250,694 $3,941 $282,024 $72 $(13,321)$523,410 
Net income—— — 34,077 — — 34,077 
Stock-based compensation, net—— 1,375 — — — 1,375 
Restricted stock units vested56,6151,318 (1,784)— — — (466)
Cash dividends on common stock ($0.48 per share)
—— — (8,261)— — (8,261)
Stock options exercised62,5001,478 (333)— — — 1,145 
Repurchase of common stock(349,344)(5,116)— (3,846)— — (8,962)
Other comprehensive loss, net of taxes—— — — — (8,075)(8,075)
Balance at September 30, 202616,827,168$248,374 $3,199 $303,994 $72 $(21,396)$534,243 
Balance at January 1, 202517,720,416$259,957 $3,645 $264,460 $72 $(20,257)$507,877 
Net income—— — 21,771 — — 21,771 
Stock-based compensation, net—— 1,450 — — — 1,450 
Restricted stock units vested60,4301,033 (1,298)— — — (265)
Cash dividends on common stock ($0.48 per share)
—— — (8,502)— — (8,502)
Stock options exercised10,000234 (63)— — — 171 
Repurchase of common stock(746,949)(10,862)— (3,121)— — (13,983)
Other comprehensive income, net of taxes—— — — — 5,816 5,816 
Balance at September 30, 202517,043,897$250,362 $3,734 $274,608 $72 $(14,441)$514,335 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
6
RBB BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS – (UNAUDITED)
(In thousands)
Nine Months Ended
September 30,
20262025
Operating activities
Net income$34,077 $21,771 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization of premises and equipment1,361 1,400 
Net accretion of securities, loans, deposits, and other(2,147)(2,679)
Amortization of investment in affordable housing tax credits1,759 1,524 
Amortization of intangible assets1,172 1,405 
Amortization of right-of-use asset3,910 3,831 
Change in operating lease liabilities(3,925)(3,727)
Provision for credit losses300 9,758 
Stock-based compensation, net1,375 1,450 
Deferred tax expense1,714 1,243 
Gain on sale of loans(1,377)(699)
Gain on OREO(669)— 
Gain on sale of fixed assets(2,658)(42)
Increase in cash surrender value of life insurance(1,318)(1,241)
Loans originated for sale, net(4,859)(6,460)
Proceeds from loans sold21,100 14,444 
Other items(8,916)(10,432)
Net cash provided by operating activities40,899 31,546 
Investing activities
Securities available for sale:
Purchases(145,356)(216,805)
Maturities, repayments and calls161,047 236,976 
Securities held to maturity:
Maturities, repayments and calls— 1,000 
Purchase of other equity securities, net(10,047)(188)
Net increase of investment in qualified affordable housing projects(2,772)(1,836)
Net increase in loans(158,911)(305,571)
Proceeds from sales of loans originally classified as HFI42,198 35,120 
Proceeds from sales of OREO5,569 7,526 
Proceeds from sales of fixed assets7,407 42 
Other investing activities, net(353)(641)
Net cash used in investing activities(101,218)(244,377)
Financing activities
Net increase in demand deposits and savings accounts311,668 46,139 
Net (decrease) increase in time deposits(266,832)236,456 
Proceeds from FHLB advances200,000 170,000 
Repayments of FHLB advances(150,000)(240,000)
Redemptions of long-term debt(40,000)— 
Cash dividends paid(8,261)(8,502)
Restricted stock units vesting(466)(265)
Common stock repurchased, net of repurchase costs(8,962)(13,983)
Exercise of stock options1,145 171 
Net cash provided by financing activities38,292 190,016 
Net decrease in cash and cash equivalents(22,027)(22,815)
Cash and cash equivalents at beginning of period212,317 257,745 
Cash and cash equivalents at end of period$190,290 $234,930 
Supplemental disclosure of cash flow information
Cash paid during the period:
Interest paid$83,374 $80,351 
Taxes paid5,069 5,163 
Non-cash investing and financing activities:
Transfer from loans to other real estate owned19,391 12,666 
Loans transferred to held for sale, net54,995 31,911 
Additions to servicing assets388 156 
Recognition of operating lease right-of-use assets(1,638)(88)
Recognition of operating lease liabilities1,638 88 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
7
RBB BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (UNAUDITED)
NOTE 1 - BUSINESS DESCRIPTION
RBB Bancorp (“RBB”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. RBB’s principal business is to serve as the holding company for its wholly-owned subsidiaries, Royal Business Bank ("Bank") and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company”. RAM was formed in 2012 to hold and manage problem assets acquired in business combinations. There are no problem assets in RAM or activity in this subsidiary at and for the three and nine months ended September 30, 2026 or the year ended December 31, 2025. When we refer to “we”, “us”, “our”, or the “Company”, we are referring to RBB Bancorp and its consolidated subsidiaries including the Bank and RAM, collectively. When we refer to the “parent company”, “Bancorp”, or the “holding company”, we are referring to RBB Bancorp, the parent company, on a stand-alone basis.
At September 30, 2026, we had total assets of $4.3 billion, total loans of $3.4 billion, total deposits of $3.4 billion and total shareholders' equity of $534.2 million. RBB’s common stock trades on the Nasdaq Global Select Market under the symbol “RBB”.
The Bank provides business-banking products and services predominantly to Asian-centric communities through 24 full service branches located in Los Angeles County, Orange County and Ventura County in California, Las Vegas (Nevada), the New York City metropolitan area, Chicago (Illinois), Edison (New Jersey) and Honolulu (Hawaii) and a loan production office located in the San Francisco Bay area. The products and services include commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance and a full range of depository accounts, including specialized services such as remote deposit, E-banking, mobile banking and treasury management services. Our primary source of revenue is providing loans to customers, who are predominantly small and middle-market businesses and individuals.
We operate as a minority depository institution (“MDI”), which is defined by the Federal Deposit Insurance Corporation (“FDIC”) as a federally insured depository institution where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. An MDI is eligible to receive support from the FDIC and other federal regulatory agencies such as training, technical assistance and review of proposed new deposit taking and lending programs, and the adoption of applicable policies and procedures governing such programs. We expect to continue to meet the criteria for MDI designation and intend to maintain our MDI designation, which has been historically beneficial to us. We continue to use the program for technical assistance.
We generate our revenue primarily from interest received on loans and, to a lesser extent, from interest received on investment securities. We also derive income from noninterest sources, such as fees received in connection with various lending and deposit services, loan servicing, gain on sales of loans and wealth management services. Our principal expenses include interest expense on deposits and borrowings, and operating expenses, such as salaries and employee benefits, occupancy and equipment, data processing, and income tax expense.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of financial results for the interim periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on our net income or shareholders’ equity. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year
8
ended December 31, 2025, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (our “2025 Annual Report”).
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. It is reasonably possible that these estimates could change as actual results could differ from those estimates. The allowance for credit losses, realization of deferred tax assets, and the valuation of goodwill are particularly subject to change and such change could have a material effect on the consolidated financial statements.
Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements were compiled in accordance with the accounting policies set forth in “Note 2 – Basis of Presentation and Summary of Significant Accounting Policies” in our consolidated financial statements as of and for the year ended December 31, 2025, included in our 2025 Annual Report. The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU” or “Update”) to amend Accounting Standards Codification (“ASC”), which is the primary source of GAAP. We have not made any changes to our significant accounting policies from those disclosed in our 2025 Annual Report.
Recent Accounting Pronouncements
Accounting standards adopted in 2026
In November of 2025, the FASB issued ASU 2025-08, Financial Instruments-Credit Losses (Topic 326) – Purchased Loans. Under the guidance that currently exists in ASC Topic 326, purchased loans are initially recorded at fair value, and an allowance for expected credit losses is separately recognized in accordance with Topic 326. If a financial asset acquired has a “more-than-insignificant” deterioration of credit quality since its origination, it is accounted for as a purchased financial asset with credit deterioration ("PCD") using a “gross-up approach.” The gross-up approach requires recognition of an allowance for credit losses ("ACL") for the estimate of credit losses at the acquisition date. The ACL is recorded with an offsetting gross-up adjustment to the purchase price of the acquired financial asset. If a financial asset acquired does not have “more-than-insignificant” deterioration of credit quality since its origination ("non-PCD"), the ACL is recognized with a corresponding charge to credit loss expense. The amendments in this ASU expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this ASU, loans acquired without credit deterioration and deemed “seasoned” are purchased seasoned loans and accounted for using the gross-up approach at acquisition. All non-PCD loans that are acquired in a business combination are deemed seasoned. Other non-PCD loans are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments in this ASU should be applied prospectively to loans that are acquired on or after the initial application date. The Company early adopted this guidance, effective January 1, 2026. After adoption, the Company applied the gross-up approach to recording an ACL for purchased seasoned loans. The adoption had no material impact on the Company’s consolidated financial statements.
Accounting standards recently issued and not yet effective
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements. This pronouncement amends the FASB Accounting Standards Codification to reflect updates and simplifications to certain disclosure requirements referred to the FASB by the SEC in 2018, including disclosures for the statement of cash flows, earnings per share, commitments, debt and equity instruments, and certain industry information, among other things. Each amendment is effective when the related disclosure is effectively removed from Regulations S-X or S-K; early adoption is prohibited. All amendments should be applied prospectively. If the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K by June 30, 2027, the pending amendments will be removed and will not become effective for any entity. Adoption of ASU 2023-06 is not expected to have a material impact on the Company's consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires disaggregated disclosure of income statement expenses within the footnotes to the financial statements for any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories, as applicable:
9
(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion and amortization recognized as part of oil- and gas-producing activities or other types of depletion services. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The guidance should be applied prospectively with an option to apply it retrospectively for each period presented. Adoption of ASU 2024-03 is not expected to have a material impact on the Company's consolidated financial statements.
In December of 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832) – Accounting for Government Grants Received by Business Entities. ASU 2025-10 creates authoritative guidance for business entities for the accounting for government grants. Prior to the issuance of this guidance, there was no specific authoritative guidance within GAAP regarding the recognition, measurement, and presentation of a government grant received by a business entity and, as a result, many entities used other sections of authoritative accounting literature by analogy to account for government grants that were received. The new guidance requires that a government grant received by a business entity should not be recognized until: (1) it is probable that (a) a business entity will comply with the conditions attached to the grant and (b) the grant will be received; and (2) a business entity meets the recognition guidance for a grant in ASC 832. The new guidance also establishes classification guidance for grants in the consolidated financial statements and prescribes disclosures of grants that include the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments may be adopted using either a modified prospective, modified retrospective, or retrospective approach. Adoption of ASU 2025-10 is not expected to have a material impact on the Company’s consolidated financial statements.
In December of 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) – Narrow-Scope Improvements. The guidance in ASU 2025-11 was issued to improve the guidance in ASC by clarifying the required interim disclosures and when that guidance is applicable. The amendments add to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The new guidance does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provides clarity on the current interim reporting requirements. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. Adoption of ASU 2025-11 is not expected to have a material impact on the Company’s consolidated financial statements.
NOTE 3 - INVESTMENT SECURITIES
Our investment portfolio is comprised primarily of U.S. government and SBA agency securities, mortgage-backed securities ("MBS") backed by government-sponsored entities, collateralized mortgage obligations ("CMO"), commercial paper, and municipal tax-exempt securities. The following table summarizes the amortized cost and fair value of investment securities available for sale (“AFS”) and held to maturity (“HTM”) and the corresponding amounts of gross unrealized gains and losses as of the dates indicated:
10
September 30, 2026Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Available for sale(dollars in thousands)
Government agency securities$18,725 $12 $(561)$18,176 
SBA agency securities19,437 9 (915)18,531 
MBS: Residential95,306 — (8,732)86,574 
MBS: Commercial10,003 — (67)9,936 
CMO: Residential114,623 13 (12,195)102,441 
CMO: Commercial76,949 116 (2,536)74,529 
Commercial paper39,722 — (23)39,699 
Corporate debt securities24,595 14 (1,518)23,091 
Municipal tax-exempt securities12,541 — (4,174)8,367 
Total available for sale$411,901 $164 $(30,721)$381,344 
Held to maturity
Municipal tax-exempt securities$4,179 $— $(376)$3,803 
Total held to maturity$4,179 $— $(376)$3,803 
December 31, 2025Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Available for sale(dollars in thousands)
Government agency securities$22,850 $34 $(179)$22,705 
SBA agency securities21,326 90 (236)21,180 
MBS: Residential91,049 634 (4,505)87,178 
MBS: Commercial5,010 — (33)4,977 
CMO: Residential120,475 760 (8,740)112,495 
CMO: Commercial102,755 183 (2,161)100,777 
Commercial paper19,948 — — 19,948 
Corporate debt securities30,165 75 (1,811)28,429 
Municipal tax-exempt securities12,567 — (3,052)9,515 
Total available for sale$426,145 $1,776 $(20,717)$407,204 
Held to maturity
Municipal tax-exempt securities$4,184 $— $(81)$4,103 
Total held to maturity$4,184 $— $(81)$4,103 
At September 30, 2026 and December 31, 2025, investment securities with a fair value of $45.9 million and $48.7 million were pledged to secure certificates of deposit from the State of California. One security with a fair value of $27,000 and $36,000 at September 30, 2026 and December 31, 2025 was pledged to secure a local agency deposit.
There were no sales of investment securities during the three and nine months ended September 30, 2026 and 2025.
Accrued interest receivable for investment securities at September 30, 2026 and December 31, 2025 totaled $1.5 million and $1.6 million.
The following tables show the amortized cost and fair value of the investment securities portfolio, by expected maturity, as of the dates indicated. However, expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Accordingly, MBS and CMO are classified in accordance with their estimated average life.
11
One Year or LessMore than One Year to Five YearsMore than Five Years to Ten YearsMore than Ten YearsTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
September 30, 2026(dollars in thousands)
Government agency securities$658 $650 $8,409 $8,292 $9,658 $9,234 $— $— $18,725 $18,176 
SBA agency securities— — 6,134 5,765 13,303 12,766 — — 19,437 18,531 
MBS: Residential— — 19,717 18,894 75,589 67,680 — — 95,306 86,574 
MBS: Commercial4,993 4,947 5,010 4,989 — — — — 10,003 9,936 
CMO: Residential610 604 71,511 68,630 42,502 33,207 — — 114,623 102,441 
CMO: Commercial3,430 3,358 31,366 30,797 42,153 40,374 — — 76,949 74,529 
Commercial paper39,722 39,699 — — — — — — 39,722 39,699 
Corporate debt securities2,003 1,999 11,371 10,948 7,650 7,434 3,571 2,710 24,595 23,091 
Municipal tax-exempt securities— — — — 1,077 820 11,464 7,547 12,541 8,367 
Total AFS$51,416 $51,257 $153,518 $148,315 $191,932 $171,515 $15,035 $10,257 $411,901 $381,344 
Municipal tax-exempt securities$— $— $1,741 $1,633 $2,438 $2,170 $— $— $4,179 $3,803 
Total HTM$— $— $1,741 $1,633 $2,438 $2,170 $— $— $4,179 $3,803 
December 31, 2025
Government agency securities$65 $65 $22,785 $22,640 $— $— $— $— $22,850 $22,705 
SBA agency securities— — 6,496 6,456 14,830 14,724 — — 21,326 21,180 
MBS: Residential— — 26,636 26,537 64,413 60,641 — — 91,049 87,178 
MBS: Commercial— — 5,010 4,977 — — — — 5,010 4,977 
CMO: Residential6,198 6,248 68,422 68,100 45,855 38,147 — — 120,475 112,495 
CMO: Commercial6,629 6,591 51,805 51,365 44,321 42,821 — — 102,755 100,777 
Commercial paper19,948 19,948 — — — — — — 19,948 19,948 
Corporate debt securities4,022 4,006 8,903 8,733 14,650 13,756 2,590 1,934 30,165 28,429 
Municipal tax-exempt securities— — — — 1,081 921 11,486 8,594 12,567 9,515 
Total AFS$36,862 $36,858 $190,057 $188,808 $185,150 $171,010 $14,076 $10,528 $426,145 $407,204 
Municipal tax-exempt securities$— $— $860 $857 $2,817 $2,742 $507 $504 $4,184 $4,103 
Total HTM$— $— $860 $857 $2,817 $2,742 $507 $504 $4,184 $4,103 
The following tables show the fair value and gross unrealized losses of our investment securities, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position, as of the dates indicated:
Less than Twelve MonthsTwelve Months or MoreTotal
Fair ValueUnrealized Losses# of IssuancesFair ValueUnrealized Losses# of IssuancesFair ValueUnrealized Losses# of Issuances
September 30, 2026(dollars in thousands)
Government agency securities$9,883 $(433)3 $4,497 $(128)2 $14,380 $(561)5 
SBA agency securities14,129 (659)5 2,541 (256)5 16,670 (915)10 
MBS: Residential63,072 (3,125)19 23,502 (5,607)15 86,574 (8,732)34 
MBS: Commercial9,936 (67)2 — — — 9,936 (67)2 
CMO: Residential51,325 (1,517)15 45,203 (10,678)23 96,528 (12,195)38 
CMO: Commercial4,106 (21)1 47,376 (2,515)21 51,482 (2,536)22 
Commercial paper24,705 (23)4 — — — 24,705 (23)4 
Corporate debt securities2,944 (56)3 15,626 (1,462)16 18,570 (1,518)19 
Municipal tax-exempt securities— — — 8,367 (4,174)11 8,367 (4,174)11 
Total AFS$180,100 $(5,901)52 $147,112 $(24,820)93 $327,212 $(30,721)145 
Municipal tax-exempt securities$1,521 $(109)4 $2,282 $(267)5 $3,803 $(376)9 
Total HTM$1,521 $(109)4 $2,282 $(267)5 $3,803 $(376)9 
12
Less than Twelve MonthsTwelve Months or MoreTotal
Fair ValueUnrealized Losses# of IssuancesFair ValueUnrealized Losses# of IssuancesFair ValueUnrealized Losses# of Issuances
December 31, 2025(dollars in thousands)
Government agency securities$1,749 $(6)1 $6,572 $(173)3 $8,321 $(179)4 
SBA agency securities7,654 (93)3 2,962 (143)5 10,616 (236)8 
MBS: Residential14,196 (91)4 27,573 (4,414)15 41,769 (4,505)19 
MBS: Commercial4,977 (33)1 — — — 4,977 (33)1 
CMO: Residential3,130 (1)1 53,195 (8,739)24 56,325 (8,740)25 
CMO: Commercial13,947 (31)4 49,366 (2,130)21 63,313 (2,161)25 
Corporate debt securities— — — 22,577 (1,811)24 22,577 (1,811)24 
Municipal tax-exempt securities— — — 9,515 (3,052)11 9,515 (3,052)11 
Total AFS$45,653 $(255)14 $171,760 $(20,462)103 $217,413 $(20,717)117 
Municipal tax-exempt securities$— $— — $3,663 $(81)8 $3,663 $(81)8 
Total HTM$— $— — $3,663 $(81)8 $3,663 $(81)8 
The securities that were in an unrealized loss position at September 30, 2026 and December 31, 2025 were evaluated to determine whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. We concluded that the unrealized losses were primarily attributed to yield curve movement. All SBA agency securities, mortgage-backed securities, and collateralized mortgage obligations are issued by government or government sponsored entities and have the support of the U.S. federal government. The issuers have not, to our knowledge, established any cause for default on these securities. We expect to recover the amortized cost basis of our securities and have no present intent to sell and do not expect to be required to sell securities that have declined below their cost before their anticipated recovery. As of September 30, 2026 and December 31, 2025, all of our HTM securities were rated “AA-” or above. Based on this evaluation, no ACL was recorded as of September 30, 2026 and December 31, 2025, against HTM or AFS securities, and there was no provision for credit losses recognized for the three months and nine months ended September 30, 2026 and 2025.
NOTE 4 - LOANS AND ALLOWANCE FOR CREDIT LOSSES
Our loan portfolio consists primarily of loans to borrowers within the greater Los Angeles metropolitan and San Francisco Bay area (California), the New York City metropolitan area, Chicago (Illinois), Las Vegas (Nevada), Edison (New Jersey) and Honolulu (Hawaii). Although we seek to avoid concentrations of loans to a single industry or based upon a single class of collateral, real estate and real estate associated businesses are among the principal industries in our market area and, as a result, our loan and collateral portfolios are, to some degree, concentrated in those industries.
The following table presents the balances in our loans held for investment ("HFI") portfolio by loan segment and class as of the dates indicated:
September 30, 2026December 31, 2025
Loans HFI: (1)
(dollars in thousands)
Real Estate:
Single-family residential mortgages$1,761,352 $1,655,382 
Commercial real estate (2)
1,280,028 1,303,019 
Construction and land development154,620 155,464 
Commercial:
Commercial and industrial151,796 140,061 
SBA48,525 55,978 
Other2,893 4,397 
Total loans HFI$3,399,214 $3,314,301 
Allowance for loan losses(44,038)(43,888)
Total loans HFI, net$3,355,176 $3,270,413 
(1)Net of premiums (discounts) on acquired loans and net deferred (fees) and costs on originated loans.
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(2)Includes non-farm and non-residential real estate loans, multifamily residential loans and non-owner occupied single-family residential loans.
Accrued interest receivable on loans at September 30, 2026 and December 31, 2025 totaled $14.6 million and $14.3 million (included in "Accrued interest and other assets" in the consolidated balance sheets). At September 30, 2026 and December 31, 2025, loans with carrying values of $2.1 billion and $1.9 billion were pledged to secure advances from the Federal Home Loan Bank ("FHLB") for up to $1.6 billion and $1.4 billion, respectively. At September 30, 2026 and December 31, 2025, loans with carrying values of $86.0 million and $88.9 million were pledged to the Federal Reserve Bank of San Francisco ("FRBSF") Discount Window.
The ACL includes the allowance for loan losses ("ALL") and the reserve for unfunded commitments ("RUC") and is maintained at a level deemed appropriate by management to provide for expected credit losses in the portfolio as of the date of the consolidated balance sheets. The RUC is included in "Accrued interest and other liabilities" on the consolidated balance sheets. The following table presents a summary of the changes in the ACL for the periods indicated:
For the Three Months Ended
September 30, 2026June 30, 2026September 30, 2025
Allowance for loan
losses		Reserve for unfunded loan
commitments		Allowance for credit
losses		Allowance for loan
losses		Reserve for unfunded loan
commitments		Allowance for credit
losses		Allowance for loan
losses		Reserve for unfunded loan
commitments		Allowance for credit
losses
(dollars in thousands)
Beginning balance$43,660 $407 $44,067 $43,666 $484 $44,150 $51,014 $629 $51,643 
Provision for/(reversal of) credit losses500 — 500 77 (77)— 750 (125)625 
Charge-offs(137)— (137)(119)— (119)(7,019)— (7,019)
Recoveries15 — 15 36 — 36 147 — 147 
Ending balance$44,038 $407 $44,445 $43,660 $407 $44,067 $44,892 $504 $45,396 
For the Nine Months Ended September 30,
20262025
Allowance for loan lossesReserve for unfunded loan
commitments		Allowance for credit lossesAllowance for loan lossesReserve for unfunded loan
commitments		Allowance for credit losses
(dollars in thousands)
Beginning balance$43,888 $484 $44,372 $47,729 $729 $48,458 
Provision for/(reversal of) credit losses377 (77)300 9,983 (225)9,758 
Charge-offs(283)— (283)(13,084)— (13,084)
Recoveries56 — 56 264 — 264 
Ending balance$44,038 $407 $44,445 $44,892 $504 $45,396 
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The following tables present the balance and activity related to the ALL for loans HFI by loan portfolio segment and class for the periods presented.
For the Three Months Ended September 30, 2026
Single-family residential
mortgages		Commercial real estateConstruction and land
development		Commercial and
industrial		SBAOtherTotal
Allowance for loan losses:(dollars in thousands)
Beginning balance$21,766 $17,527 $1,954 $1,593 $689 $131 $43,660 
Provision for/(reversal of) credit losses4 293 79 132 (11)3 500 
Charge-offs— — — (107)— (30)(137)
Recoveries— — — 1 1 13 15 
Ending balance$21,770 $17,820 $2,033 $1,619 $679 $117 $44,038 
For the Three Months Ended June 30, 2026
Single-family residential
mortgages		Commercial real estateConstruction and land
development		Commercial and
industrial		SBAOtherTotal
Allowance for loan losses:(dollars in thousands)
Beginning balance$21,988 $17,639 $1,446 $1,672 $769 $152 $43,666 
(Reversal of)/provision for credit losses(222)(139)508 23 (80)(13)77 
Charge-offs— — — (102)— (17)(119)
Recoveries— 27 — — — 9 36 
Ending balance$21,766 $17,527 $1,954 $1,593 $689 $131 $43,660 
For the Three Months Ended September 30, 2025
Single-family residential
mortgages		Commercial real estateConstruction and land
development		Commercial and
industrial		SBAOtherTotal
Allowance for loan losses:(dollars in thousands)
Beginning balance$19,106 $21,423 $7,971 $1,493 $791 $230 $51,014 
Provision for/(reversal of) credit losses2,737 (2,730)312 393 19 19 750 
Charge-offs— (21)(6,929)(4)(11)(54)(7,019)
Recoveries— — 138 1 — 8 147 
Ending balance$21,843 $18,672 $1,492 $1,883 $799 $203 $44,892 
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For the Nine Months Ended September 30, 2026
Single-family residential
mortgages		Commercial real estateConstruction and land
development		Commercial and
industrial		SBAOtherTotal
Allowance for loan losses:(dollars in thousands)
Beginning balance$21,585 $18,162 $1,502 $1,647 $824 $168 $43,888 
Provision for/(reversal of) credit losses185 (369)531 183 (144)(9)377 
Charge-offs— — — (213)(2)(68)(283)
Recoveries— 27 — 2 1 26 56 
Ending balance$21,770 $17,820 $2,033 $1,619 $679 $117 $44,038 
For the Nine Months Ended September 30, 2025
Single-family residential
mortgages		Commercial real estateConstruction and land
development		Commercial and
industrial		SBAOtherTotal
Allowance for loan losses:(dollars in thousands)
Beginning balance$17,518 $21,879 $6,053 $1,339 $654 $286 $47,729 
Provision for/(reversal of) credit losses5,728 89 3,476 550 157 (17)9,983 
Charge-offs(1,403)(3,296)(8,175)(85)(12)(113)(13,084)
Recoveries— — 138 79 — 47 264 
Ending balance$21,843 $18,672 $1,492 $1,883 $799 $203 $44,892 
We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as commercial real estate (“CRE”), construction and land development (“C&D”), and commercial and industrial (“C&I”) loans. This analysis is performed on an ongoing basis as new information is obtained. We use the following definitions for risk ratings:
Pass - Loans classified as pass include loans not meeting the risk ratings defined below.
Special Mention -Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable based on facts, conditions, and values that currently exist.
The following tables summarize our loans HFI by loan portfolio segment, risk rating and vintage year as of the dates indicated. The vintage year is the year of origination, renewal or major modification.
16
Term Loan by Vintage
September 30, 202620262025202420232022PriorRevolvingRevolving Converted to
Term During the Period		Total
Real estate:(dollars in thousands)
Single-family residential mortgages
Pass$304,051 $303,418 $73,242 $112,094 $468,867 $496,655 $795 $— $1,759,122 
Special mention— — — — — — — — — 
Substandard— — — 704 1,365 153 8 — 2,230 
Doubtful— — — — — — — — — 
Total$304,051 $303,418 $73,242 $112,798 $470,232 $496,808 $803 $— $1,761,352 
YTD gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate
Pass$143,959 $254,942 $139,000 $35,157 $379,213 $279,997 $— $— $1,232,268 
Special mention— — 717 6,612 4,606 6,234 — — 18,169 
Substandard— — 4,197 — 2,241 23,153 — — 29,591 
Doubtful— — — — — — — — — 
Total$143,959 $254,942 $143,914 $41,769 $386,060 $309,384 $— $— $1,280,028 
YTD gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction and land development
Pass$12,327 $6,864 $38,682 $— $44,554 $44,352 $— $— $146,779 
Special mention— — — — — — — — — 
Substandard— — — — — 7,841 — — 7,841 
Doubtful— — — — — — — — — 
Total$12,327 $6,864 $38,682 $— $44,554 $52,193 $— $— $154,620 
YTD gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial:
Commercial and industrial
Pass$1,547 $12,332 $40 $999 $817 $3,864 $121,319 $— $140,918 
Special mention— — — — — — 27 — 27 
Substandard6 401 3,900 1 37 4,709 1,797 — 10,851 
Doubtful— — — — — — — — — 
Total$1,553 $12,733 $3,940 $1,000 $854 $8,573 $123,143 $— $151,796 
YTD gross charge-offs$4 $208 $1 $— $— $— $— $— $213 
SBA
Pass$3,105 $7,527 $2,200 $1,208 $4,136 $17,404 $— $— $35,580 
Special mention— — — 349 5,783 — — — 6,132 
Substandard— — 2,649 — — 4,164 — — 6,813 
Doubtful— — — — — — — — — 
Total$3,105 $7,527 $4,849 $1,557 $9,919 $21,568 $— $— $48,525 
YTD gross charge-offs$— $— $— $— $— $2 $— $— $2 
Other:
Pass$— $— $— $46 $238 $2,599 $10 $— $2,893 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $— $— $46 $238 $2,599 $10 $— $2,893 
YTD gross charge-offs$— $— $— $— $— $68 $— $— $68 
Total by risk rating:
Pass$464,989 $585,083 $253,164 $149,504 $897,825 $844,871 $122,124 $— $3,317,560 
Special mention— — 717 6,961 10,389 6,234 27 — 24,328 
Substandard6 401 10,746 705 3,643 40,020 1,805 — 57,326 
Doubtful— — — — — — — — — 
Total loans$464,995 $585,484 $264,627 $157,170 $911,857 $891,125 $123,956 $— $3,399,214 
Total YTD gross charge-offs$4 $208 $1 $— $— $70 $— $— $283 
17
Term Loan by Vintage
December 31, 202520252024202320222021PriorRevolvingRevolving Converted to
Term During the Period		Total
Real estate:(dollars in thousands)
Single-family residential mortgages
Pass$369,196 $98,047 $122,104 $501,580 $209,318 $351,536 $978 $— $1,652,759 
Special mention— — — — — — — — — 
Substandard— — 679 1,944 — — — — 2,623 
Doubtful— — — — — — — — — 
Total$369,196 $98,047 $122,783 $503,524 $209,318 $351,536 $978 $— $1,655,382 
YTD gross charge-offs$1 $— $— $537 $174 $691 $— $— $1,403 
Commercial real estate
Pass$263,863 $171,328 $49,551 $395,493 $155,891 $228,915 $— $— $1,265,041 
Special mention— — — 4,300 668 8,281 — — 13,249 
Substandard— 668 — 1,578 10,204 12,279 — — 24,729 
Doubtful— — — — — — — — — 
Total$263,863 $171,996 $49,551 $401,371 $166,763 $249,475 $— $— $1,303,019 
YTD gross charge-offs$— $— $— $— $1,383 $3,296 $— $— $4,679 
Construction and land development
Pass$4,739 $28,059 $— $42,440 $3,845 $45,000 $— $— $124,083 
Special mention— 3,387 — — — — — — 3,387 
Substandard— — — — 19,465 8,529 — — 27,994 
Doubtful— — — — — — — — — 
Total$4,739 $31,446 $— $42,440 $23,310 $53,529 $— $— $155,464 
YTD gross charge-offs$— $— $— $1,246 $6,929 $— $— $— $8,175 
Commercial:
Commercial and industrial— 
Pass$13,681 $55 $1,041 $892 $2,645 $5,839 $99,594 $— $123,747 
Special mention— — — — — — 2,247 — 2,247 
Substandard413 6,014 5 52 — 5,423 2,160 — 14,067 
Doubtful— — — — — — — — — 
Total$14,094 $6,069 $1,046 $944 $2,645 $11,262 $104,001 $— $140,061 
YTD gross charge-offs$5 $6 $— $— $— $77 $— $— $88 
SBA
Pass$14,433 $2,834 $1,283 $10,718 $9,655 $10,939 $— $— $49,862 
Special mention— — 354 — — — — — 354 
Substandard— 2,271 — — 481 3,010 — — 5,762 
Doubtful— — — — — — — — — 
Total$14,433 $5,105 $1,637 $10,718 $10,136 $13,949 $— $— $55,978 
YTD gross charge-offs$— $12 $— $— $— $175 $— $— $187 
Other:
Pass$— $— $86 $630 $3,583 $86 $12 $— $4,397 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $— $86 $630 $3,583 $86 $12 $— $4,397 
YTD gross charge-offs$— $— $— $— $175 $5 $— $— $180 
Total by risk rating:
Pass$665,912 $300,323 $174,065 $951,753 $384,937 $642,315 $100,584 $— $3,219,889 
Special mention— 3,387 354 4,300 668 8,281 2,247 — 19,237 
Substandard413 8,953 684 3,574 30,150 29,241 2,160 — 75,175 
Doubtful— — — — — — — — — 
Total loans$666,325 $312,663 $175,103 $959,627 $415,755 $679,837 $104,991 $— $3,314,301 
Total YTD gross charge-offs$6 $18 $— $1,783 $8,661 $4,244 $— $— $14,712 
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The following tables present the aging of the recorded investment in past due loans HFI, by loan segment and class, as of the dates indicated.
Accruing Loans
September 30, 202630-59 Days60-89 Days90 Days or More
Total Past Due (1)
Nonaccrual LoansCurrentTotal Loans HFI
Real estate:(dollars in thousands)
Single-family residential mortgages (2)
$2,293 $2,057 $— $4,350 $896 $1,756,106 $1,761,352 
Commercial real estate2,136 194 — 2,330 3,057 1,274,641 1,280,028 
Construction and land development— — — — 7,841 146,779 154,620 
Commercial:
Commercial and industrial2 27 — 29 5,109 146,658 151,796 
SBA91 407 — 498 1,932 46,095 48,525 
Other22 — — 22 — 2,871 2,893 
Total$4,544 $2,685 $— $7,229 $18,835 $3,373,150 $3,399,214 
(1)Past due loans exclude nonaccrual loans.
(2)Nonaccrual SFR mortgage loans include $153,000 of loans in the process of foreclosure.
Accruing Loans
December 31, 202530-59 Days60-89 Days90 Days or More
Total Past Due (1)
Nonaccrual LoansCurrentTotal Loans HFI
Real estate:(dollars in thousands)
Single-family residential mortgages (2)
$5,140 $1,321 $— $6,461 $2,143 $1,646,778 $1,655,382 
Commercial real estate284 204 — 488 8,158 1,294,373 1,303,019 
Construction and land development— — — — 27,994 127,470 155,464 
Commercial:
Commercial and industrial1,277 — — 1,277 5,116 133,668 140,061 
SBA— 542 — 542 1,221 54,215 55,978 
Other13 8 — 21 — 4,376 4,397 
Total$6,714 $2,075 $— $8,789 $44,632 $3,260,880 $3,314,301 
(1)Past due loans exclude nonaccrual loans.
(2)Nonaccrual SFR mortgage loans include $680,000 of loans in the process of foreclosure.
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The following table presents the loans HFI on nonaccrual status and the balance of such loans with no ALL, by loan segment and class, as of the dates indicated:
September 30, 2026December 31, 2025
Nonaccrual Loans
with no ALL		Total
Nonaccrual Loans		Nonaccrual Loans
with no ALL		Total
Nonaccrual Loans
Real estate:(dollars in thousands)
Single-family residential mortgages$896 $896 $2,143 $2,143 
Commercial real estate3,057 3,057 4,801 8,158 
Construction and land development7,841 7,841 27,994 27,994 
Commercial:
Commercial and industrial5,109 5,109 5,116 5,116 
SBA1,932 1,932 1,221 1,221 
Total$18,835 $18,835 $41,275 $44,632 
The following tables present the amortized cost basis of individually evaluated collateral-dependent loans, by loan segment and class, and type of collateral which secures such loans as of the dates indicated.
September 30, 2026
Type of Collateral
Loan ClassResidential Real EstateCommercial Real EstateBusiness AssetsTotal
Real Estate:(dollars in thousands)
Single-family residential mortgages$896 $— $— $896 
Commercial real estate— 3,057 — 3,057 
Construction and land development— 7,841 — 7,841 
Commercial:
Commercial and industrial5,109 — — 5,109 
SBA— 1,534 398 1,932 
Total loans$6,005 $12,432 $398 $18,835 
December 31, 2025
Type of Collateral
Loan ClassResidential Real EstateCommercial Real EstateBusiness AssetsTotal
Real Estate:(dollars in thousands)
Single-family residential mortgages$2,143 $— $— $2,143 
Commercial real estate— 8,158 — 8,158 
Construction and land development19,465 8,529 — 27,994 
Commercial:
Commercial and industrial5,116 — — 5,116 
SBA— 1,136 85 1,221 
Total loans$26,724 $17,823 $85 $44,632 
We did not recognize any interest income on nonaccrual loans while the loans were in nonaccrual status during 2026 or 2025.
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Loan Modifications to Borrowers Experiencing Financial Difficulty - In cases where a borrower is experiencing financial difficulties, we may make certain concessionary modifications to the contractual terms. These concessions may include term extension, payment delay, principal forgiveness, interest rate reduction, or other actions intended to minimize potential losses. We may provide multiple types of concessions on one loan. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for loan losses. Loans modified to borrowers experiencing financial difficulty are individually evaluated for purposes of the allowance for loan losses.
The following tables present loan modifications made to borrowers experiencing financial difficulty by type of modification for the periods indicated:
Three Months Ended September 30, 2026
Term ExtensionTotal Loan Modifications
Loan ClassBalanceBalance% of Loan Class
(dollars in thousands)
Commercial and industrial$3,899 $3,899 2.57 %
Total$3,899 $3,899 
Nine Months Ended September 30, 2026
Term ExtensionPayment DeferralTotal Loan Modifications
BalanceBalanceBalance% of Loan Class
(dollars in thousands)
Commercial real estate$663 $— $663 0.05%
Commercial and industrial3,899 — 3,899 2.57%
SBA— 637 637 1.31%
Total$4,562 $637 $5,199 

Three Months Ended September 30, 2025
Payment DeferralTotal Loan Modifications
BalanceBalance% of Loan Class
(dollars in thousands)
Commercial real estate$4,872 $4,872 0.38%
SBA410 410 0.76%
Total$5,282 $5,282 

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Nine Months Ended September 30, 2025
Payment DeferralCombination - Rate Reduction and
Term Modification		Combination - Principal Reduction,
Rate Reduction and Term Modification		Total Loan Modifications
BalanceBalanceBalanceBalance% of Loan Class
(dollars in thousands)
Commercial real estate$4,872 $— $3,532 $8,404 0.65%
Commercial and industrial— 4,709 — 4,709 3.21%
SBA410 — — 410 0.76 %
Total$5,282 $4,709 $3,532 $13,523 
At September 30, 2026 and December 31, 2025, we had no commitments to lend to borrowers experiencing financial difficulty whose loans were modified during the period. We closely monitor the performance of loans modified to borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts. The following tables present the payment status of loans that were modified during the preceding 12 month period, by loan class, as of the dates indicated.
September 30, 2026
Loan ClassCurrent30-89 Days
Past Due		90 Days or
More Past Due		Total
(dollars in thousands)
Commercial real estate$663 $— $— $663 
Commercial and industrial3,899 — — 3,899 
SBA637 — — 637 
Total$5,199 $— $— $5,199 
September 30, 2025
Loan ClassCurrent30-89 Days Past Due90 Days or More Past DueTotal
(dollars in thousands)
Construction and land development$— $— $28,222 $28,222 
Commercial real estate18,607 — — 18,607 
Commercial and industrial4,708 — — 4,708 
SBA410——410
Total$23,725 $— $28,222 $51,947 
For the loans modified to borrowers experiencing financial difficulty during the 12 months prior to September 30, 2026, no loans had a payment default of their modified terms in the three months ended September 30, 2026, and one SBA loan with a balance of $127,000 had a payment default of their modified terms in the nine months ended September 30, 2026. For the loans modified to borrowers experiencing financial difficulty during the 12 months prior to September 30, 2025, two construction and land development loans totaling $28.2 million had a payment default of their modified terms in the three and nine months ended September 30, 2025.
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NOTE 5 - LOAN SERVICING
The loans being serviced for others are not reported as assets in our consolidated balance sheets. The table below presents the underlying principal balances of the loans serviced for others, by loan portfolio segment, as of the dates indicated:
Loans serviced for others:September 30,
2026		December 31,
2025
(dollars in thousands)
Single-family residential mortgage$746,083 $833,704 
SBA96,642 90,364 
Construction and land development9,742 9,018 
Commercial real estate2,392 2,420 
Servicing income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal. The amortization of mortgage servicing assets is net against loan servicing income. Loan servicing income, net of amortization, totaled $525,000, $533,000, and $564,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $1.6 million and $1.7 million for the nine months ended September 30, 2026 and 2025.
When mortgage and SBA loans are sold with servicing retained, servicing assets are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Servicing assets are evaluated for impairment based upon the fair value of the assets as compared to carrying amount. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If we later determine that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income.
The table below presents the activity in the servicing assets for the periods indicated:
Three Months Ended
September 30, 2026June 30, 2026September 30, 2025
Mortgage
Loans		SBA
Loans		Mortgage
Loans		SBA
Loans		Mortgage
Loans		SBA
Loans
Servicing assets:(dollars in thousands)
Beginning of period$4,537 $1,327 $4,567 $1,267 $5,183 $1,299 
Additions18 10 174 101 37 13 
Payoffs(81)— (58)(22)(94)(1)
Amortization(148)(19)(146)(19)(151)(34)
End of period$4,326 $1,318 $4,537 $1,327 $4,975 $1,277 
Nine Months Ended
September 30, 2026September 30, 2025
Mortgage
Loans		SBA
Loans		Mortgage
Loans		SBA
Loans
Servicing assets:(dollars in thousands)
Beginning of period$4,761 $1,280 $5,656 $1,329 
Additions229 159 66 90 
Payoffs(207)(60)(273)(21)
Amortization(457)(61)(474)(121)
End of period$4,326 $1,318 $4,975 $1,277 
Fair value is estimated using a valuation model that calculates the present value of estimated future net servicing cash flows. All classes of servicing assets are subsequently measured using the amortization method, which requires servicing assets to be amortized into noninterest income in proportion to, and over the period of, the estimated future net
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servicing income of the underlying loans. Portfolio characteristics include loan delinquency rates, age of loans, note rate and geography. The assumptions embedded in the valuation are obtained from a range of metrics utilized by active buyers in the marketplace. The analysis accounts for recent transactions, and supply and demand within the market.
The fair value of servicing assets for mortgage loans was $9.8 million and $9.7 million as of September 30, 2026 and December 31, 2025. The fair value at September 30, 2026 was determined using an average discount rate of 10.03%, average prepayment speed of 7.72%, depending on the stratification of the specific right, and a weighted-average default rate of 0.10%. The fair value at December 31, 2025 was determined using an average discount rate of 10.09%, average prepayment speed of 7.93%, depending on the stratification of the specific right, and a weighted-average default rate of 0.11%.
The fair value of servicing assets for SBA loans was $1.9 million and $1.8 million as of September 30, 2026 and December 31, 2025. The fair value at September 30, 2026 was determined using an average discount rate of 8.5%, average prepayment speed of 25%, depending on the stratification of the specific right, and a weighted-average default rate of 1.26%. The fair value at December 31, 2025 was determined using an average discount rate of 8.5%, average prepayment speed of 27%, depending on the stratification of the specific right, and a weighted-average default rate of 1.13%.
NOTE 6 - GOODWILL AND INTANGIBLES
Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill resulting from whole bank and branch acquisitions is tested for impairment at least annually during the fourth quarter of each year, and more frequently, if events or circumstances indicate the value of goodwill may be impaired. We completed our most recent evaluation of goodwill as of October 1, 2025 and determined that no goodwill impairment existed. Goodwill totaled $71.5 million at both September 30, 2026 and December 31, 2025 and is the only intangible asset with an indefinite life on our consolidated balance sheets. There were no triggering events during 2026 that caused management to evaluate goodwill for impairment as of September 30, 2026.
Other intangible assets also include core deposit intangible (“CDI”) assets which arise from acquiring deposit bases through whole bank and branch acquisitions. CDI assets are amortized on an accelerated method over their estimated useful life of 8 to 10 years. The unamortized balance (included in “Accrued interest and other assets” in the consolidated balance sheets) at September 30, 2026 and December 31, 2025 was $1.0 million and $1.3 million. CDI amortization expense was $126,000, $127,000, and $172,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $387,000 and $516,000 for the nine months ended September 30, 2026 and 2025.
Estimated CDI amortization expense for future years is as follows:
As of September 30, 2026:
CDI Amortization Expense
(dollars in thousands)
Remainder of 2026$114 
2027417 
2028297 
202964 
203033 
Thereafter26 
Total$951 
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NOTE 7 - ACCRUED INTEREST AND OTHER ASSETS
The following table presents the detail of our accrued interest receivable and other assets as of the dates indicated:
As of September 30,
2026		As of December 31,
2025
(dollars in thousands)
CRA and other equity investments$36,133 $26,086 
Other real estate owned ("OREO")19,820 8,830 
Accrued interest receivable16,608 16,230 
LIHTC investments15,237 16,997 
Servicing assets (1)
5,644 6,041 
Prepaid assets3,265 2,915 
Core deposit intangibles (2)
951 1,338 
Other assets2,629 4,206 
Total accrued interest and other assets$100,287 $82,643 
(1)See Note 5 - Loan Servicing for additional information.
(2)See Note 6 - Goodwill and Intangibles for additional information.
CRA and other equity investments
The Company has several Community Reinvestment Act ("CRA") equity investments, other bank stocks, and other equity investments which totaled $36.1 million and $26.1 million as of September 30, 2026 and December 31, 2025. We may receive recurring interest and dividend income on these investments (included in "Interest and dividend income" in the consolidated statements of income). We may also receive capital gain distributions (included in "Other income" in the consolidated statements of income"). There were no significant gains or losses on these investments during the three and nine months ended September 30, 2026 and 2025. On a quarterly basis, we review our equity investments for impairment. No impairments were recorded during the three and nine months ended September 30, 2026 and 2025.
Other Real Estate Owned ("OREO")
The balance of OREO increased to $19.8 million at September 30, 2026, compared to $8.8 million at December 31, 2025. One nonperforming construction loan was transferred to OREO in the second quarter of 2026 and has a carrying value of $19.8 million at September 30, 2026. The OREO properties at December 31, 2025 were sold in 2026 and resulted in net gains of $669,000 for the nine months ended September 30, 2026.
Low-Income Housing Tax Credit investments ("LIHTC")
The Bank invests as a limited partner in LIHTC investments that operate qualified affordable housing projects which generate tax benefits, including federal low-income housing tax credits. These investments are accounted for under the proportional amortization method and totaled $15.2 million and $17.0 million at September 30, 2026 and December 31, 2025. Total unfunded commitments related to these investments totaled $7.3 million at September 30, 2026 and $10.0 million at December 31, 2025 and are included in accrued interest and other liabilities on the consolidated balance sheets. We expect to fulfill these commitments between 2026 and 2041.
We recognized tax credits from LIHTC investments totaling $520,000, $520,000, and $456,000 during the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $1.6 million and $1.4 million during the nine months ended September 30, 2026 and 2025. The amortization of these investments was included within income tax expense as an offset to such tax credits. We recognized amortization expense of $586,000, $587,000, and $572,000 during the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $1.8 million and $1.5 million during the nine months ended September 30, 2026 and 2025. We had no impairment losses during each of the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, or the nine months ended September 30, 2026 and 2025.
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NOTE 8 - DEPOSITS
At September 30, 2026, the scheduled maturities of time deposits are as follows:
$250,000 and underGreater than $250,000Total
At September 30, 2026(dollars in thousands)
Remainder of 2026$317,137 $406,615 $723,752 
2027434,815 437,686 872,501 
20282,727 965 3,692 
2029449 — 449 
2030 and thereafter381 — 381 
Total$755,509 $845,266 $1,600,775 
Time deposits include deposits acquired through both retail and wholesale channels. Wholesale channels include brokered deposits, collateralized deposits from the State of California, and deposits acquired through internet listing services. Wholesale time deposits totaled $61.5 million at September 30, 2026 and $225.7 million at December 31, 2025. Brokered time deposits were $770,000 at September 30, 2026 and $145.5 million at December 31, 2025. Collateralized deposits from the State of California totaled $40.0 million at both September 30, 2026 and at December 31, 2025. Time deposits acquired through internet listing services totaled $20.7 million at September 30, 2026 and $40.2 million at December 31, 2025.
In addition, we offer retail deposit products where customers are able to achieve FDIC insurance for balances on deposit in excess of the $250,000 FDIC insurance limit through the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweeps (“ICS”) programs. Time deposits held through the CDARS program were $136.0 million at September 30, 2026 and $128.3 million at December 31, 2025. ICS deposits totaled $148.7 million at September 30, 2026 and $156.3 million at December 31, 2025.
NOTE 9 - LONG-TERM DEBT
At September 30, 2026, the Company's long-term debt consisted of $80.0 million of fixed-to-floating rate subordinated notes, with an April 1, 2031 maturity date (the "Notes"). The interest rate was fixed at 4.00% through March 31, 2026, and now resets quarterly to a rate of three-month Secured Overnight Financing Rate ("SOFR") plus 329 basis points starting April 1, 2026. The rate was set at 6.98% as of April 1, 2026, 7.02% as of July 1, 2026, and 7.39% as of October 1, 2026. The Notes may be included in Tier 2 capital with certain limitations applicable under current regulatory guidelines, and such amount is discounted as the Notes approach maturity. The amount of the Notes included in Tier 2 capital was $64.0 million at September 30, 2026, and $120.0 million at December 31, 2025. The Notes became redeemable at par beginning April 1, 2026, and on July 1, 2026, the Company redeemed $40.0 million at par plus accrued interest.
We recognized interest expense on the Notes of $1.4 million, $2.1 million, and $1.2 million for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $4.8 million and $3.6 million for the nine months ended September 30, 2026 and 2025. We also recorded debt issuance cost amortization expense of $0, $0 and $96,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $89,000 and $286,000 for the nine months ended September 30, 2026 and 2025. We were in compliance with all covenants for the Notes as of September 30, 2026.
NOTE 10 - SUBORDINATED DEBENTURES
Subordinated debentures issued in connection with three separate trust preferred securities totaled $15.5 million and $15.4 million as of September 30, 2026 and December 31, 2025. Pursuant to the terms of our subordinated debentures, we are not permitted to declare or pay any dividends on our capital stock if an event of default occurs under the terms of the subordinated debentures. In addition, we have the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years. The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. We may redeem the subordinated debentures, subject to prior approval by the Board of Governors of the Federal Reserve System at 100% of
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the principal amount, plus accrued and unpaid interest. These subordinated debentures consist of the following at September 30, 2026 and are described in detail after the table below:
Issue DatePrincipal AmountUnamortized
Valuation Reserve		Recorded ValueStated Rate DescriptionEffective Stated RateStated Maturity
Subordinated debentures:(dollars in thousands)
TFC Trust12/22/2006$5,155 $941 $4,214 
Three-month CME Term SOFR plus 0.26% plus 1.65%
5.81%3/15/2037
FAIC Trust12/15/20047,217 630 6,587 
Three-month CME Term SOFR plus 0.26% plus 2.25%
6.41%12/15/2034
PGBH Trust12/15/20045,155 418 4,737 
Three-month CME Term SOFR plus 0.26% plus 2.10%
6.26%12/15/2034
Total$17,527 $1,989 $15,538 
In 2016, we acquired TFC Statutory Trust (the “TFC Trust”) through the acquisition of Tomato Bank and its holding company, TFC Holding Company. At the close of this acquisition, a $1.9 million valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security. The unamortized valuation reserve was $941,000 at September 30, 2026 and $1.0 million at December 31, 2025. The subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 1.65%, which was 5.81% as of September 30, 2026 and 5.63% at December 31, 2025.
In October 2018, we acquired First American International Statutory Trust I (“FAIC Trust”) through the acquisition of First American International Corp. (“FAIC”). At the close of this acquisition, a $1.2 million valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security. The unamortized valuation reserve was $630,000 at September 30, 2026 and $688,000 at December 31, 2025. The subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 2.25%, which was 6.41% as of September 30, 2026 and 6.23% at December 31, 2025.
In January 2020, we acquired Pacific Global Bank Trust I (“PGBH Trust”) through the acquisition of PGB Holdings, Inc. At the close of this acquisition, a $763,000 valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security. The unamortized valuation reserve was $418,000 at September 30, 2026 and $456,000 at December 31, 2025. The subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 2.10%, which was 6.26% as of September 30, 2026 and 6.08% at December 31, 2025.
We recognized interest expense on the subordinated debentures of $260,000, $255,000, and $285,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $770,000 and $850,000 for the nine months ended September 30, 2026 and 2025. The aggregate amount of amortization expense was $55,000 for each of the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $165,000 for each of the nine months ended September 30, 2026 and 2025. We were in compliance with all covenants under the subordinated debentures as of September 30, 2026.
For regulatory reporting purposes, the Federal Reserve has indicated that the capital of trust preferred securities qualify as Tier 1 capital of the Company subject to previously specified limitations (including that the asset size of the issuer did not exceed $15 billion). If regulators make a determination that the capital securities can no longer be considered in regulatory capital, the securities become callable and we may redeem them.
NOTE 11 - BORROWING ARRANGEMENTS
The Bank has established secured and unsecured lines of credit. The Bank may borrow funds from time to time on a term or overnight basis from the FHLB, the FRBSF and other financial institutions as indicated below.
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FHLB Secured Line of Credit and Advances. At September 30, 2026, the Bank had secured borrowing capacity with the FHLB of $1.6 billion collateralized by pledged residential and commercial loans with a carrying value of $2.1 billion. At September 30, 2026, the Bank had no overnight advances, $20.0 million in term advances, and $160.0 million of putable term advances. The weighted average rate of FHLB advances was 3.94% at September 30, 2026. The remaining secured borrowing capacity with the FHLB was $1.4 billion as of September 30, 2026.
The details of the FHLB term advances outstanding at September 30, 2026 are shown in Next Call Date order in the table below:
Advance DateAmountRateCall StructureNext Call DateFinal Stated Maturity Date
(dollars in thousands)
5/8/2025$10,000 3.69%N/AN/A5/10/2028
6/23/202510,000 3.64%N/AN/A6/23/2028
8/27/202620,000 4.02%
One time call (1)
11/27/20268/27/2029
6/15/202610,000 3.84%
One time call (2)
12/15/20266/15/2029
6/15/202610,000 3.84%
One time call (2)
12/17/20266/17/2030
6/15/202620,000 3.94%
One time call (3)
6/15/20276/15/2029
6/24/202620,000 3.97%
One time call (3)
6/24/20276/24/2030
6/24/202620,000 4.01%
One time call (3)
6/25/20276/25/2029
7/01/202620,000 3.99%
One time call (3)
7/01/20277/01/2030
8/27/202620,000 3.96%
Quarterly call (3)
8/27/20278/27/2030
7/02/202620,000 4.10%
Quarterly call (4)
7/03/20287/03/2030
Total$180,000 3.94%
(1)Call option by the FHLB after initial three month lock out.
(2)Call option by the FHLB after initial six month lock out.
(3)Call option by the FHLB after initial one year lock out.
(4)Call option by the FHLB after initial two year lock out.
FRB Secured Line of Credit. At September 30, 2026, the Bank had a secured borrowing capacity with the FRBSF of $68.5 million collateralized by pledged loans with a carrying value of $86.0 million.
Federal Funds Arrangements with Commercial Banks. At September 30, 2026, the Bank had established unsecured borrowing lines with other financial institutions totaling $97.0 million.
There were no amounts outstanding under any of the other borrowing arrangements above as of September 30, 2026, except the FHLB term advances of $180.0 million.
NOTE 12 - INCOME TAXES
The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
We recorded an income tax provision of $4.2 million, $3.9 million and $3.1 million, reflecting an effective tax rate of 24.9%, 28.0%, and 23.5% for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $12.5 million and $7.6 million, reflecting an effective tax rate of 26.9% and 25.9% for the nine months ended September 30, 2026 and 2025. The Company’s income tax expense results from domestic (federal) and state tax obligations since the Company has no foreign operations or foreign taxes for all periods presented.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, we enter into financial commitments to meet the financing needs of our customers. These financial commitments include commitments to extend credit, unused lines of credit, commercial and similar letters of credit and standby letters of credit. Those instruments involve varying degrees of credit and interest rate risk not recognized in our financial statements.
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Our exposure to loss in the event of nonperformance on these financial commitments is represented by the contractual amount of those instruments. We use the same credit policies in making commitments as we do for loans reflected in the financial statements.
We had the following financial commitments whose contractual amount represents credit risk, as of the dates indicated:
September 30,
2026		December 31,
2025
(dollars in thousands)
Commitments to make loans$48,174 $41,635 
Unused lines of credit57,266 64,513 
Commercial and similar letters of credit169 2,389 
Standby letters of credit4,405 5,025 
Total$110,014 $113,562 
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. We evaluate each client's creditworthiness on a case-by-case basis.
We record a liability for lifetime expected losses on off-balance-sheet credit exposure that does not fit the definition of unconditionally cancelable commitments in accordance with ASC 326, which we refer to as the reserve for unfunded loan commitments ("RUC"). We use the loss rate and exposure at default framework to estimate a RUC. Loss rates for the expected funded balances are determined based on the associated pooled loan analysis loss rate and the exposure at default is based on an estimated utilization given default. The RUC was $407,000 and $484,000 as of September 30, 2026 and December 31, 2025. We recorded a provision for unfunded loan commitments of $0, a reversal of provision for unfunded loan commitments of $77,000, and a reversal of provision for unfunded loan commitments of $125,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025. We recorded a reversal of provision for unfunded loan commitments of $77,000 and $225,000 for the nine months ended September 30, 2026 and 2025.
In addition, we invest in Small Business Investment Company funds, other equity investments for CRA purposes and investments in fintech venture funds. Pursuant to these investments, we may commit to an investment amount to be fulfilled in future periods. These unfunded commitments are not on the Company's balance sheets and totaled $1.1 million as of September 30, 2026 and $1.6 million as of December 31, 2025.
We are involved in various matters of litigation which have arisen in the ordinary course of business and accruals for estimates of potential losses have been provided when necessary and appropriate under generally accepted accounting principles. In the opinion of management, the disposition of such pending litigation will not have a material effect on the Company's consolidated financial statements.
NOTE 14 - LEASES
We lease several of our operating facilities under various non-cancellable operating leases expiring at various dates through 2037. We are also responsible for common area maintenance, taxes, and insurance at the various branch locations.
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Future minimum rent payments on our leases were as follows as of the date indicated:
As of September 30, 2026
(dollars in thousands)
Remainder of 2026$1,035 
20276,152 
20285,191 
20293,041 
20302,683 
Thereafter6,240 
Total future minimum lease payments$24,342 
Less: amount of payment representing interest(1,829)
Total present value of lease payments$22,513 
The minimum rent payments shown above are given for the existing lease obligation and are not a forecast of future rental expense. Total rental expense, recognized on a straight-line basis, was $1.5 million for each of the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $4.4 million for each of the nine months ended September 30, 2026 and 2025. The Company received rental income of $131,000, $164,000 and $161,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $452,000 and $478,000 for the nine months ended September 30, 2026 and 2025.
The following table presents the right-of-use (“ROU”) assets and lease liabilities recorded on our consolidated balance sheet, the weighted-average remaining lease terms and discount rates, as of the dates indicated:
September 30,
2026		December 31,
2025
Operating Leases(dollars in thousands)
ROU assets$20,754 $23,026 
Lease liabilities22,513 24,800 
Weighted-average remaining lease term (in years)5.505.96
Weighted-average discount rate3.51 %2.97 %
NOTE 15 - RELATED PARTY TRANSACTIONS
There were no loans or outstanding loan commitments to any principal officers or directors, or any of their affiliates at September 30, 2026 and December 31, 2025.
Deposits from principal officers, directors, and their affiliates at September 30, 2026 and December 31, 2025 were $49.3 million and $73.0 million.
Certain directors and their affiliates owned $4.0 million of RBB's subordinated notes as of September 30, 2026 and $6.0 million at December 31, 2025.
NOTE 16 - STOCK-BASED COMPENSATION
Amended and Restated RBB Bancorp 2017 Omnibus Stock Incentive Plan
The Amended and Restated RBB Bancorp 2017 Omnibus Stock Incentive Plan (the "Amended OSIP") was approved by our board of directors in January 2022 and approved by our shareholders in May 2022. The Amended OSIP was designed to ensure continued availability of equity awards that will assist us in attracting and retaining competent managerial personnel and rewarding key employees, directors and other service providers for high levels of performance. Pursuant to the Amended OSIP, our board of directors is permitted to grant awards to eligible persons, including
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employees and directors, in the form of qualified and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other incentive awards. We reserved up to 30% of issued and outstanding shares of common stock as of the date we adopted the Amended OSIP, or 3,848,341 shares. As of September 30, 2026, there were 778,136 shares of common stock available for issuance under the Amended OSIP. This represents 4.6% of the issued and outstanding shares of the Company’s common stock as of September 30, 2026. Awards vest, become exercisable and contain such other terms and conditions as determined by the board of directors and set forth in individual agreements with the eligible persons receiving the awards. The Amended OSIP enables the board of directors to set specific performance criteria that must be met before an award vests. The Amended OSIP allows for acceleration of vesting and exercise privileges of grants if a participant’s termination of employment is due to a change in control, death or total disability. If a participant’s job is terminated for cause, then all awards expire at the date of termination.
Stock Options
Compensation expense for stock options was $9,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $28,000 and $35,000 for the nine months ended September 30, 2026 and 2025. Unrecognized stock-based compensation expense related to stock options was $45,000 as of September 30, 2026 and is expected to be recognized over the next 0.9 years.
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. Assumptions in the model include expected volatility, expected term, expected dividends and a risk-free rate of return. The expected volatility is based on the historical volatility of our stock trading history. The expected term is based on historical data and represents the estimated average period of time that the options remain outstanding. The risk-free rate of return reflects the grant date interest rate offered for zero coupon U.S. Treasury bonds over the expected term of the options. No stock options have been granted or valued since March 31, 2023.
The table below presents a summary of our stock options awards and activity as of and for the nine months ended September 30, 2026.
Outstanding OptionsWeighted-Average Exercise
Price		Weighted- Average Remaining
Contractual Term in years		Aggregate Intrinsic Value
(dollars in thousands, except for per share data)
Outstanding at beginning of year151,000 $18.37 
Exercised(62,500)18.32 
Forfeited/cancelled(2,000)18.32 
Outstanding at end of period86,500 $18.42 4.51$659 
Options exercisable74,500 $17.97 4.23$600 
The total fair value of the options vested was $0 and $63,000 during the nine months ended September 30, 2026 and 2025. Unvested stock options totaled 12,000 with a weighted average grant date fair value of $6.16 as of September 30, 2026 and December 31, 2025.
For the nine months ended September 30, 2026, the cash received from the exercise of stock options was $1.1 million with an intrinsic value of $416,000. For the nine months ended September 30, 2025, the cash received from the exercise of stock options was $171,000 with an intrinsic value of $1,000.
Restricted Stock Units
We award time-based restricted stock units (“TRSUs”) and performance-based restricted stock units (“PRSUs”), which we also refer to collectively as restricted stock units (“RSUs”). The PRSUs are subject to pre-established performance metrics, which may also include a market condition, that will be measured in the future and subject to oversight and approval by the Board of Director’s Compensation Committee. The TRSUs have original lives ranging from 1 to 4 years, or may vest immediately, and PRSUs have an original life of 3 years. The RSUs granted during the nine months ended September 30, 2026 included 10,675 PRSUs with a performance metric subject to a market condition and grant date fair value per share of $24.08.
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The following table presents RSUs activity during the nine months ended September 30, 2026.
RSUsWeighted-Average
Grant Date
Fair Value Per Share
Outstanding at beginning of year191,091 $16.66 
Granted (1)
104,925 23.71 
Vested (1)
(76,861)18.42 
Forfeited/cancelled(2,145)16.07 
Outstanding at end of period217,010 $19.45 
(1)Includes 15,832 RSUs awarded to members of the Board of Directors, which immediately vested.
The recorded compensation expense for RSUs was $391,000, $478,000 and $262,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $1.1 million and $1.0 million for the nine months ended September 30, 2026 and 2025. As of September 30, 2026, unrecognized stock-based compensation expense related to RSUs totaled $3.2 million and is expected to be recognized over the next 2.5 years.
NOTE 17 - REGULATORY MATTERS
Holding companies (with assets over $3 billion at the beginning of the year) and banks are subject to various regulatory capital requirements administered by the 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 our financial statements.
Final comprehensive regulatory capital rules for U.S. banking organizations pursuant to the capital framework of the Basel Committee on Banking Supervision, generally referred to as “Basel III,” implemented a requirement for all banking organizations to maintain a capital conservation buffer of 2.5% above the minimum risk-based capital requirements. The capital conservation buffer is exclusively comprised of common equity Tier 1 capital, and it applies to each of the three risk-based capital ratios but not to the leverage ratio. At September 30, 2026, the Company and the Bank were in compliance with the capital conservation buffer requirements. If the capital adequacy minimum ratios plus the conservation buffer amount exceed actual risk-weighted capital ratios, then dividends, share buybacks, and discretionary bonuses to executives could be limited in amount.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. 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 Bank to maintain minimum amounts and ratios (set forth in the table below) of Total, Tier 1 and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). As permitted by the regulators for financial institutions that are not deemed to be “advanced approaches” institutions, we have elected to opt out of the Basel III requirement to include accumulated other comprehensive income in risk-based capital. Management believes, at September 30, 2026 and December 31, 2025, we satisfied all capital adequacy requirements to which we were subject.
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The following tables set forth the Company's consolidated and the Bank’s capital amounts and ratios and the related regulatory requirements as of the dates indicated:
Amount of Capital Required
ActualMinimum Required for
Capital Adequacy Purposes		To Be Well-Capitalized Under
Prompt Corrective Action Provisions
AmountRatioAmount
Ratio (1)
AmountRatio
As of September 30, 2026:(dollars in thousands)
Tier 1 Leverage Ratio
Consolidated$498,361 11.82%$168,647 4.0%$210,809 5.0%
Bank534,830 12.71%168,378 4.0%210,473 5.0%
Common Equity Tier 1 Risk-Based Capital Ratio
Consolidated$483,289 17.87%$121,682 4.5%$175,763 6.5%
Bank534,830 19.84%121,318 4.5%175,237 6.5%
Tier 1 Risk-Based Capital Ratio
Consolidated$498,361 18.43%$162,243 6.0%$216,324 8.0%
Bank534,830 19.84%161,757 6.0%215,676 8.0%
Total Risk-Based Capital Ratio
Consolidated$596,293 22.05%$216,324 8.0%$270,405 10.0%
Bank568,662 21.09%215,676 8.0%269,595 10.0%
(1)These ratios are exclusive of the 2.5% capital conservation buffer.
Amount of Capital Required
ActualMinimum Required for
Capital Adequacy Purposes		To Be Well-Capitalized Under
Prompt Corrective Action Provisions
AmountRatioAmount
Ratio (1)
AmountRatio
As of December 31, 2025:(dollars in thousands)
Tier 1 Leverage Ratio
Consolidated$479,047 11.60%$165,193 4.0%$206,491 5.0%
Bank544,296 13.20%164,965 4.0%206,206 5.0%
Common Equity Tier 1 Risk Based Capital Ratio
Consolidated$464,133 17.49%$119,388 4.5%$172,450 6.5%
Bank544,296 20.57%119,075 4.5%171,998 6.5%
Tier 1 Risk-Based Capital Ratio
Consolidated$479,047 18.06%$159,184 6.0%$212,246 8.0%
Bank544,296 20.57%158,767 6.0%211,690 8.0%
Total Risk-Based Capital Ratio
Consolidated$632,260 23.83%$212,246 8.0%$265,307 10.0%
Bank577,512 21.82%211,690 8.0%264,612 10.0%
(1)These ratios are exclusive of the 2.5% capital conservation buffer.
The California Financial Code generally acts to prohibit banks from making a cash distribution to its shareholders in excess of the lesser of the bank's undivided profits or the bank's net income for its last three fiscal years less the amount of any distribution made by the bank to its shareholders during the same period, unless prior written approval by the California Department of Financial Protection and Innovation is obtained.
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The California General Corporation Law generally acts to prohibit companies from paying dividends on common stock unless retained earnings, immediately prior to the dividend payment, equals or exceeds the amount of the dividend. If a company fails this test, then it may still pay dividends if after giving effect to the dividend the company's assets are at least 125% of its liabilities.
Additionally, the Federal Reserve has issued guidance which requires that they be consulted before payment of a dividend if a bank holding company does not have earnings over the prior four quarters of at least equal to the dividend to be paid, plus other holding company obligations.
NOTE 18 - FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with ASC 820-10, we group financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:
Fair Value Hierarchy
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, prepayment speeds, volatilities, etc.) or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly, in the market.
Level 3 - Valuation is generated from model-based techniques where one or more significant inputs are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of matrix pricing, discounted cash flow models, and similar techniques.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Securities
The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1) or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2).
Assets and Liabilities Measured on a Non-Recurring Basis
Collateral-dependent individually evaluated loans
Collateral-dependent individually evaluated loans are carried at fair value when it is probable that we will be unable to collect all amounts due according to the contractual terms of the original loan agreement and the loan has been written down to the fair value of its underlying collateral, net of expected selling costs.
The fair value of collateral-dependent individually evaluated loans is based on third party appraisals of the property, less management’s estimate of selling costs. Third party appraisals generally use a sales comparison or income capitalization approach to derive the appraised value based on market transactions involving similar or comparable properties. Adjustments are routinely made by the third party appraisers to adjust for differences between the comparable sales and income data used in the appraisal. Adjustments may also result from the consideration of relevant economic and demographic factors which may affect property values. Positive adjustments in the appraisal represent increases to the sales comparisons and negative adjustments represent decreases.
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Other Real Estate Owned ("OREO")
OREO (included in “Accrued interest and other assets” in the consolidated balance sheets) is initially recorded at fair value less estimated selling costs at the date of transfer. This amount becomes the property's new basis. Fair values are generally based on third party appraisals of the property and discounted by management to reflect estimated selling costs (Level 3).
Appraisals for OREO and collateral-dependent loans are performed by state licensed appraisers (for commercial properties) or state certified appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by us. We review the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison to independent data sources such as recent market data or industry wide statistics for residential appraisals. We also consider the actual selling price of collateral that has been sold in recent periods to determine what additional adjustments, if any, should be made to the appraisal values to arrive at fair value. In determining the net realizable value of the underlying collateral for individually evaluated loans and OREO, we typically apply a discount of 6% to 10% of the collateral value to cover market price fluctuations and estimated selling costs that may be incurred in the event of foreclosure. Generally, if the existing appraisal is older than twelve months for OREO or collateral-dependent loans, a new appraisal report is ordered.
The following table presents our financial assets and liabilities measured at fair value on a recurring basis or on a non-recurring basis as of the dates indicated:
Fair Value Measurements Using:
September 30, 2026Level 1Level 2Level 3Total
Assets measured at fair value:(dollars in thousands)
On a recurring basis:
Securities available for sale:
Government agency securities$— $18,176 $— $18,176 
SBA agency securities— 18,531 — 18,531 
Mortgage-backed securities— 96,510 — 96,510 
Collateralized mortgage obligations— 176,970 — 176,970 
Commercial paper— 39,699 — 39,699 
Corporate debt securities— 23,091 — 23,091 
Municipal securities— 8,367 — 8,367 
$— $381,344 $— $381,344 
On a non-recurring basis:
Collateral dependent individually evaluated loans:
Commercial real estate loans$— $— $3,057 $3,057 
Commercial and industrial loans— — 4,708 4,708 
SBA loans— — 883 883 
Other real estate owned (1)
— — 19,820 19,820 
$— $— $28,468 $28,468 
(1)Included in “Accrued interest and other assets” on the consolidated balance sheets.
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December 31, 2025Level 1Level 2Level 3Total
Assets measured at fair value:
On a recurring basis:
Securities available for sale:
Government agency securities$— $22,705 $— $22,705 
SBA agency securities— 21,180 — 21,180 
Mortgage-backed securities— 92,155 — 92,155 
Collateralized mortgage obligations— 213,272 — 213,272 
Commercial paper— 19,948 — 19,948 
Corporate debt securities— 28,429 — 28,429 
Municipal securities— 9,515 — 9,515 
Forward mortgage loan sale contracts (1)
— — 11 11 
$— $407,204 $11 $407,215 
On a non-recurring basis:
Collateral dependent individually evaluated loans:
Commercial real estate loans$— $— $3,071 $3,071 
Construction and land development loans— — 19,465 19,465 
Commercial and industrial loans— — 4,708 4,708 
Other real estate owned (1)
— — 8,830 8,830 
$— $— $36,074 $36,074 
(1)Included in “Accrued interest and other assets” on the consolidated balance sheets.
The fair value of assets evaluated on a non-recurring basis is based on third party appraisals, including adjustments to comparable market data as summarized in the table below.
September 30, 2026Fair ValueValuation TechniquesUnobservable Input(s)
Range (1)
Collateral dependent loans:(dollars in thousands)
Commercial real estate loans$3,057 Market approachAdjustments
(41)% to 4%
Commercial and industrial loans4,708 Market approachAdjustments
(4)% to 26%
SBA loans883 Market approachAdjustments
0% to 22%
Other Real Estate Owned (2)
19,820 Market approachAdjustments
6% to 26%
Total$28,468 
(1)Represents the minimum and maximum range of adjustments made by appraisers for differences in comparable sales.
(2)Included in “Accrued interest and other assets” on the consolidated balance sheets.
December 31, 2025Fair Value Valuation TechniquesUnobservable Input(s)
Range (1)
Collateral dependent loans:(dollars in thousands)
Commercial real estate loans$3,071 Market approachAdjustments
(41)% to 4%
Construction and land development loans19,465 Market approachAdjustments
9% to 23%
Commercial and industrial loans4,708 Market approachAdjustments
(20)% to 20%
Other Real Estate Owned(2)
8,830 Market approachAdjustments
(10)% to 21%
Total$36,074 
(1)Represents the minimum and maximum range of adjustments made by appraisers for differences in comparable sales.
(2)Included in "Accrued interest and other assets" on the consolidated balance sheets.
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The fair value hierarchy level and estimated fair value of significant financial instruments as of the dates indicated are summarized as follows:
September 30, 2026December 31, 2025
Fair Value
Hierarchy		Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Financial Assets:(dollars in thousands)
Cash and cash equivalentsLevel 1$190,290 $190,290 $212,317 $212,317 
Interest-earning deposits in other financial institutionsLevel 1600 600 600 600 
Investment securities – AFSLevel 2381,344 381,344 407,204 407,204 
Investment securities – HTMLevel 24,179 3,803 4,184 4,103 
Loans held for saleLevel 2— — 2,067 2,067 
Loans, netLevel 33,355,176 3,304,069 3,270,413 3,221,797 
Equity securities (1)
Level 336,133 36,133 26,086 26,086 
Investment in FHLB stockLevel 215,000 15,000 15,000 15,000 
Servicing assets (1)
Level 35,644 11,644 6,041 11,521 
Accrued interest receivable (1)
Level 1/2/316,608 16,608 16,230 16,230 
NotionalFairNotionalFair
ValueValueValueValue
Derivative Assets:
Forward mortgage loan sale contracts (1)
Level 3$— $— $515 $11 
CarryingFairCarryingFair
Financial Liabilities:ValueValueValueValue
DepositsLevel 2$3,395,280 $3,391,247 $3,350,398 $3,350,982 
FHLB advancesLevel 3180,000 173,992 130,000 129,198 
Long-term debtLevel 380,000 79,663 119,911 114,691 
Subordinated debenturesLevel 315,538 15,308 15,375 15,227 
Accrued interest payable (2)
Level 2/35,460 5,460 7,960 7,960 
(1)Included in “Accrued interest and other assets” on the consolidated balance sheets.
(2)Included in “Accrued interest and other liabilities” on the consolidated balance sheets.
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NOTE 19 - EARNINGS PER SHARE
The following is a reconciliation of net income and shares outstanding to the net income and number of shares used to compute earnings per share (“EPS”) for the periods indicated:
For the Three Months Ended
September 30, 2026June 30, 2026September 30, 2025
IncomeSharesIncomeSharesIncomeShares
(dollars in thousands except per share data)
Net income$12,637 $10,140 $10,148 
Shares outstanding16,827,16816,985,91917,043,897
Impact of weighting shares83,28425,705181,805
Used in basic EPS12,637 16,910,45210,140 17,011,62410,148 17,225,702
Dilutive effect of outstanding stock options & RSUs117,234130,11875,925
Used in dilutive EPS$12,637 17,027,686$10,140 17,141,742$10,148 17,301,627
Basic earnings per common share$0.75 $0.60 $0.59 
Diluted earnings per common share$0.74 $0.59 $0.59 
For the Nine Months Ended September 30,
20262025
IncomeSharesIncomeShares
(dollars in thousands except per share data)
Net income$34,077 $21,771 
Shares outstanding16,827,16817,043,897
Impact of weighting shares167,548520,938
Used in basic EPS34,077 16,994,71621,771 17,564,835
Dilutive effect of outstanding stock options & RSUs119,39756,764
Used in dilutive EPS$34,077 17,114,113$21,771 17,621,599
Basic earnings per common share$2.01 $1.24 
Diluted earnings per common share$1.99 $1.24 
Options to purchase zero, 12,000, and 34,000 shares of common stock were excluded from the calculation of diluted earnings per share for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, respectively, because their effect would have been anti-dilutive. Options to purchase 13,231 and 82,247 shares of common stock were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2026 and 2025, respectively, because their effect would have been anti-dilutive. There were 8,226, zero, and 2,300 anti-dilutive unvested RSUs outstanding for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and 2,772 and 6,786 anti-dilutive unvested RSUs outstanding for the nine months ended September 30, 2026 and 2025.
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NOTE 20– REVENUE FROM CONTRACTS WITH CUSTOMERS
The following is a summary of revenue from contracts with customers that are in-scope and not in-scope under ASC Topic 606 for the periods indicated:
For the Three Months EndedFor the Nine Months Ended September 30,
September 30, 2026June 30, 2026September 30, 202520262025
Noninterest income, in scope(dollars in thousands)
Fees and service charges on deposit accounts$485 $505 $497 $1,471 $1,446 
Other fees (1)
193 169 225 871 642 
Other income (2)
625 599 602 1,775 1,730 
(Loss)/gain on OREO— (221)— 669 — 
Total in-scope noninterest income1,303 1,052 1,324 4,786 3,818 
Noninterest income, not in scope (3)
3,802 1,966 1,969 7,588 10,248 
Total noninterest income$5,105 $3,018 $3,293 $12,374 $14,066 
_______________________________
(1)Other fees consist primarily of wealth management fees, miscellaneous loan fees and postage/courier fees.
(2)Other income consists primarily of safe deposit box rental income, wire transfer fees, and interchange fees.
(3)Noninterest income outside the scope of ASC 606 consists primarily of net loan servicing income, letter of credit commissions, BOLI income, gains on sales of loans, other income from equity investments, recoveries on loans acquired in a business combination, a $2.7 million gain on building sale in the third quarter of 2026 and other grant income including the Employee Retention Credit of $5.2 million received in the second quarter of 2025.
The major revenue streams by fee type that are within the scope of ASC 606 presented in the above tables are described in additional detail below:
Fees and Service Charges on Deposit Accounts
Fees and service charges on deposit accounts include charges for analysis, overdraft, cashier's check fees, ATM, and safe deposit activities executed by our deposit clients. Fees earned from our deposit clients are governed by contracts that provide for overall custody and access to deposited funds and other related services and can be terminated at will by either party; this includes fees from money service businesses. Fees received from deposit clients for the various deposit activities are recognized as revenue once the performance obligations are met. Periodic service charges are generally collected monthly directly from the customer’s deposit account, and at the end of a statement cycle, while transaction based service charges are typically collected at the time of or soon after the service is performed.
Wealth Management Fees
In our wealth management division, revenue is primarily generated from (1) securities brokerage accounts, (2) investment advisor accounts, (3) full service brokerage implementation fees, and (4) life insurance and annuity products. We employ financial consultants to provide investment planning services for customers including wealth management services, asset allocation strategies, portfolio analysis and monitoring, investment strategies, and risk management strategies. The commission fees we earn are variable and are generally received monthly. We recognize revenue for the services performed based on actual transaction details received from the broker dealer we engage.
Gain/(loss) on Other Real Estate Owned
We record a gain or loss from the sale of OREO, when control of the property or asset transfers to the buyer, which generally occurs at the time of an executed deed or sales agreement. When we finance the sale of OREO to a buyer, we assess whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon transfer of control of the property to the buyer. In determining the gain or loss on the sale, we adjust the transaction price and related gain or loss on sale if a significant financing component is present. Periodic valuation gains or losses based on the changes in the value of the OREO after repossession are also recorded in (loss)/gain on OREO.
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NOTE 21 - SEGMENT INFORMATION
Our reportable segments are determined by the Chief Executive Officer and Chief Financial Officer, who are each designated as a chief operating decision maker ("CODM"), based upon information provided by our products and services offered, primarily banking operations. The segments are also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business, which are aggregated if operating performance, products/services, and customers are similar. The CODM will evaluate the financial performance of our business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing our segment and in the determination of allocating resources. The CODM uses consolidated net income, total assets, total loans, and total deposits to benchmark us against our competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used to assess performance and in establishing compensation. Loans, investments, and deposits provide the revenues in the banking operation. Interest expense, provisions for credit losses and payroll provide the significant expenses in the banking operation. All operations are domestic.
Segment performance is evaluated using consolidated net income, total assets, total loans, and total deposits. The following table presents information reported internally for performance assessment by the CODM for the dates indicated:
For the Three Months Ended
For the Nine Months Ended September 30,
September 30, 2026June 30, 2026September 30, 202520262025
Banking Segment(dollars in thousands)
Interest and dividend income$59,307 $57,159 $57,392 $173,269 $163,933 
Reconciliation of revenue
Other revenues5,105 3,018 3,293 12,374 14,066 
Total consolidated revenues$64,412 $60,177 $60,685 $185,643 $177,999 
Less:
Interest expense27,546 27,073 28,115 80,919 81,159 
Segment net interest income and noninterest income$36,866 $33,104 $32,570 $104,724 $96,840 
Less:
Provision for credit losses500 — 625 300 9,758 
Salaries and benefits expense11,467 11,045 10,600 33,773 32,323 
Other segment items (1)
8,081 7,977 8,083 24,055 25,375 
Income tax expense4,181 3,942 3,114 12,519 7,613 
Consolidated net income$12,637 $10,140 $10,148 $34,077 $21,771 
Total Assets$4,251,296 $4,275,002 $4,208,455 $4,251,296 $4,208,455 
Total Loans$3,399,214 $3,309,459 $3,303,333 $3,399,214 $3,303,333 
Total Deposits$3,395,280 $3,390,641 $3,366,497 $3,395,280 $3,366,497 
(1)Other segment items include expenses for occupancy and equipment, data processing, legal and professional, office, marketing and business promotion, insurance and regulatory assessments, core deposit intangible amortization and other expenses.
NOTE 22 - REPURCHASE OF COMMON STOCK
On May 29, 2025, the Board of Directors authorized the repurchase of up to $18.0 million of common stock (the "2025 Repurchase Plan") through June 30, 2026. During the three months ended June 30, 2026, the Company repurchased 163,500 shares of common stock under the 2025 Repurchase Plan. These repurchases effectively exhausted the 2025 Repurchase Plan which expired on June 30, 2026.
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On June 15, 2026, the Board of Directors authorized the repurchase of up to 1 million shares of the Company's outstanding common stock (the "2026 Repurchase Plan") through June 30, 2028. During the three months ended June 30, 2026, the Company repurchased 17,076 shares of common stock under the 2026 Repurchase Plan. During the three months ended September 30, 2026, the Company repurchased 168,768 shares of common stock under the 2026 Repurchase Plan. The 2026 Repurchase Plan has 814,156 shares available for repurchase as of September 30, 2026.
The Company repurchased 349,344 shares at a weighted average share price of $25.48 during the nine months ended September 30, 2026 under both the 2025 Repurchase Plan and the 2026 Repurchase Plan.
NOTE 23 - SUBSEQUENT EVENTS
On October 19, 2026, we announced the Board of Directors had declared a common stock cash dividend of $0.16 per share, payable on November 12, 2026 to common shareholders of record as of October 30, 2026.
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ITEM 2.          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q (this “Report” or “Form 10-Q”), the terms “Bancorp” and “RBB” refer to RBB Bancorp and the term “Bank” refers to Royal Business Bank. The terms “Company,” “we,” “us,” and “our” refer to Bancorp and its consolidated subsidiaries, including the Bank collectively. When we refer to the “parent company,” “Bancorp,” or the “holding company,” we are referring to RBB Bancorp, the parent company, on a stand-alone basis. This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our results of operations, financial condition and financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:
•business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the United States (“U.S.”) federal budget or debt or turbulence or uncertainty in domestic or foreign financial markets;
•the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations;
•the impact of adverse developments in the banking industry, including bank failures and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments;
•federal government shutdowns and uncertainty regarding the federal government's debt limit;
•possible additional provisions for credit losses and charge-offs;
•credit risks of lending activities and deterioration in asset or credit quality;
•extensive laws and regulations and supervision that we are subject to, including potential supervisory action by bank supervisory authorities;
•compliance with the Bank Secrecy Act and other money laundering statutes and regulations;
•potential goodwill impairment;
•liquidity risk;
•fluctuations in interest rates;
•failure to comply with debt covenants;
•risks associated with acquisitions and the expansion of our business into new markets;
•inflation and deflation;
•real estate market conditions and the value of real estate collateral;
•the effects of having concentrations in our loan portfolio, including commercial real estate and the risks of geographic and industry concentrations;
•environmental liabilities;
•our ability to compete with larger competitors;
•our ability to retain key personnel;
•successful management of reputational risk;
•severe weather, natural disasters, earthquakes, fires, or other adverse external events could harm our business;
•geopolitical conditions, including acts or threats of terrorism, actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, including the war between Russia and Ukraine, the conflict in the Middle East, and increasing tensions between China and Taiwan, which could impact business and economic conditions in the U.S. and abroad;
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•tariffs, trade policies, and related tensions, which could impact our clients, specific industry sectors, and/or broader economic conditions and financial markets;
•public health crises and pandemics, and their effects on the economic and business environments in which we operate, including our credit quality and business operations, as well as the impact on general economic and financial market conditions;
•general economic or business conditions in Asia, and other regions where the Bank has operations;
•failures, interruptions, or security breaches of our information systems;
•climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs;
•cybersecurity threats and the cost of defending against them;
•our ability to adapt our systems to the expanding use of technology in banking;
•risk management processes and strategies;
•the impact of regulatory enforcement actions, if any;
•certain provisions in our charter and bylaws that may affect acquisition of the Company;
•changes in tax laws and regulations;
•the impact of governmental efforts to restructure the U.S. financial regulatory system and increased costs of compliance and other risks associated with changes in regulation, including any amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act;
•the impact of changes in the Federal Deposit Insurance Corporation (“FDIC”) insurance assessment rate and the rules and regulations related to the calculation of the FDIC insurance assessments;
•the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) or other accounting standards setters;
•fluctuations in our stock price;
•restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure;
•our ability to raise additional capital, if needed, and the potential resulting dilution of interests of holders of our common stock;
•the soundness of other financial institutions and our ongoing relations with our various federal and state regulators, including the SEC, FDIC, Board of Governors of the Federal Reserve System, California Department of Financial Protection and Innovation and Consumer Financial Protection Bureau; and
•our success at managing the risks involved in the foregoing items.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
CRITICAL ACCOUNTING POLICIES
Management has established various accounting policies that govern the application of generally accepted accounting principles in the U.S. (“GAAP”) in the preparation of our financial statements. Certain accounting policies require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions. The Company’s critical accounting policies consist of the allowance for credit losses on loans held for investment, goodwill and income taxes. Please see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 (our "2025 Annual Report") for additional discussion concerning these critical accounting policies. Also, our significant accounting policies are described in greater detail in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies to the audited consolidated financial statements included in our 2025 Annual Report and the consolidated financial statements in this Form 10-Q, and are essential to understanding Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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Allowance for Credit Losses ("ACL")
A sensitivity analysis of our ACL was performed as of September 30, 2026. Based on this sensitivity analysis, a 25% increase in the assumed prepayment speed on loans would result in a $990,000, or 2.2%, decrease to the ACL. A 25% decrease in the assumed prepayment speed on loans would result in a $1.1 million, or 2.4%, increase to the ACL. Additionally, a one percentage point increase in the unemployment rate would result in a $1.0 million, or 2.3%, increase to the ACL and a one percentage point decrease in the unemployment rate would result in a $1.0 million, or 2.3%, decrease to the ACL. Management reviews the results using the comparison scenario for sensitivity analysis and considers the results when evaluating the qualitative factor adjustments.
On a quarterly basis, we stress test our nine qualitative risk factors, which are categorized by lending policy, procedures and strategies; economic conditions; changes in nature and volume of the portfolio; credit and lending staff; problem loan trends; loan review results; collateral value; concentrations; and regulatory and business environment, by creating two scenarios, a Moderate Stress scenario and a Major Stress scenario. In the Moderate Stress scenario, the status of the nine risk factors across all pooled loan types were set at “High-Moderate Risk” while in the Major Stress scenario, the status of the nine risk factors across all pooled loan types were set at “Major Risk.” Under the Moderate Stress scenario, the ACL would increase by $12.3 million, or 27.7%, as of September 30, 2026. Under the Major Stress scenario, the ACL would increase by $33.0 million, or 74.2%, as of September 30, 2026. Management compared the stress test results to our internal forecasts for earnings and capital and has concluded that the Company would remain well-capitalized under these stressed scenarios.
For additional information on the policies, methodologies and judgments used to determine the ACL, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies in our 2025 Annual Report and Note 4 — Loans and Allowance for Credit Losses in the consolidated financial statements in this Form 10-Q.
GENERAL
RBB Bancorp ("RBB") is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. RBB’s principal business is to serve as the holding company for its wholly-owned subsidiaries, Royal Business Bank ("Bank") and RBB Asset Management Company ("RAM"), collectively referred to herein as "the Company". RAM was formed in 2012 to hold and manage problem assets acquired in business combinations. There are no problem assets in RAM or activity in this subsidiary at and for the three months and nine months ended September 30, 2026, or the year ended December 31, 2025. At September 30, 2026 we had total assets of $4.3 billion, gross loans held for investment ("HFI") of $3.4 billion, total deposits of $3.4 billion and total shareholders' equity of $534.2 million. RBB’s common stock trades on the Nasdaq Global Select Market under the symbol “RBB.”
The Bank provides business-banking products and services predominantly to Asian-centric communities through 24 full service branches located in Los Angeles County, Orange County and Ventura County in California, Las Vegas (Nevada), the New York City metropolitan area, Chicago (Illinois), Edison (New Jersey), and Honolulu (Hawaii) and a loan production office located in the San Francisco Bay area. The products and services include commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (“SBA”) 7A and 504 loans, mortgage loans, trade finance, and a full range of depository accounts, including specialized services such as remote deposit, E-banking, mobile banking, and treasury management services. Our primary source of revenue is providing loans to customers, who are predominantly small and middle-market businesses and individuals.
We operate as a minority depository institution ("MDI"), which is defined by the FDIC as a federally insured depository institution where 51% or more of the voting stock is owned by minority individuals or a majority of the board of directors is minority and the community that the institution serves is predominantly minority. An MDI is eligible to receive support from the FDIC and other federal regulatory agencies such as training, technical assistance, and review of proposed new deposit taking and lending programs, and the adoption of applicable policies and procedures governing such programs. We expect to continue to meet the criteria for MDI designation and intend to maintain our MDI designation, which has been historically beneficial to us. We continue to use the program for technical assistance.
OVERVIEW
The following discussion provides information about the results of operations, financial condition, liquidity and capital resources of RBB and its wholly owned subsidiaries. This information is intended to facilitate an understanding and
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assessment of significant changes and trends related to our financial condition and results of operations. This discussion and analysis should be read in conjunction with our audited consolidated financial statements included in our 2025 Annual Report, and the unaudited consolidated financial statements and accompanying notes presented elsewhere in this Report. The financial results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results expected for the year ending December 31, 2026.
We reported net income of $12.6 million, or $0.74 diluted earnings per share, for the quarter ended September 30, 2026, compared to net income of $10.1 million, or $0.59 diluted earnings per share, for the quarter ended June 30, 2026 and $10.1 million, or $0.59 diluted earnings per share for the quarter ended September 30, 2025. Compared with the prior quarter, net income for the third quarter of 2026 reflected higher net interest income and noninterest income, partially offset by higher credit costs, noninterest expense, and income tax expense. The third quarter of 2026 included a $2.7 million (pre-tax) gain on the sale of an office building in Brooklyn, New York. Compared with the third quarter of 2025, net income reflected higher net interest income and noninterest income and lower credit costs, partially offset by higher noninterest expense and income tax expense.
Provision for credit losses was $500,000 for the third quarter of 2026 compared to no provision for the second quarter of 2026 and a $625,000 provision for credit losses for the third quarter of 2025. The third quarter of 2026 provision for credit losses was due mainly to the impact of net loan growth, partially offset by improved portfolio credit quality trends and underlying economic forecast indicators. Net charge-offs in both the third quarter and second quarter of 2026 represented 0.01% of average loans on an annualized basis, compared to 0.84% for the third quarter of 2025.
Pre-tax pre-provision income totaled $17.3 million for the quarter ended September 30, 2026, compared to $14.1 million for the quarter ended June 30, 2026 and $13.9 million for the quarter ended September 30, 2025. Pre-tax pre-provision income totaled $46.9 million for the nine months ended September 30, 2026, compared to $39.1 million for the nine months ended September 30, 2025. The $7.8 million, or 20%, increase for the year-to-date results was due to our ability to grow net interest income by 12% while controlling noninterest expense, which increased 0.2% year over year. For additional information on pre-tax pre-provision income, including a reconciliation of this measure to its most comparable GAAP measure, see "Non-GAAP Financial Measures."
At September 30, 2026, total assets were $4.3 billion, an increase of $43.0 million from December 31, 2025. The increase in total assets was primarily the result of an increase of $84.9 million in loans held for investment, partially offset by a decrease of $25.9 million in investment securities available for sale. At September 30, 2026, total deposits were $3.4 billion, an increase of $44.9 million from December 31, 2025. The increase in total deposits was due to a $209.1 million increase in retail deposits offset by a $164.2 million decrease in wholesale deposits. The increase in retail deposits included a $281.4 million increase in nonmaturity interest-bearing deposits and a $102.6 million decrease in time deposits as a portion of the maturing time deposits moved into a high-yield savings product. Noninterest-bearing demand deposits increased $30.3 million to $556.8 million, or 16.4% of total deposits, at September 30, 2026, compared to $526.5 million, or 15.7% of total deposits, at December 31, 2025. The gross loan to deposit ratio was 100.1% at September 30, 2026, compared to 99.0% at December 31, 2025 and 98.1% at September 30, 2025.
Nonperforming assets decreased $4.9 million to $38.7 million, or 0.91% of total assets, at September 30, 2026, from $43.6 million, or 1.02% of total assets, at June 30, 2026, due to a $4.9 million decrease in nonperforming loans. In addition, compared to September 30, 2025, nonperforming assets decreased $15.7 million due to lower nonperforming loans combined with a higher OREO balance. Nonperforming loans totaled $18.8 million, $23.8 million, and $45.5 million as of September 30, 2026, June 30, 2026, and September 30, 2025. OREO totaled $19.8 million at September 30, 2026 and June 30, 2026, and $8.8 million at September 30, 2025.
Loans classified as substandard decreased by $4.2 million during the third quarter of 2026 due to payoffs/paydowns totaling $5.4 million, partially offset by additions of $1.2 million. Loans classified as special mention increased $4.1 million due to additions of $7.0 million, partially offset by payoffs/paydowns of $1.5 million, and upgrades of $1.4 million to pass-rated loans.
As of September 30, 2026, the allowance for credit losses totaled $44.4 million, up from $44.1 million at June 30, 2026. The $378,000 increase in the allowance for credit losses for the third quarter of 2026 was due to a provision for credit losses of $500,000, partially offset by net charge-offs of $122,000. The allowance for loan losses ("ALL") as a percentage of loans HFI decreased to 1.30% at September 30, 2026, compared to 1.32% at June 30, 2026. The ALL as a percentage of nonperforming loans HFI was 234% at September 30, 2026, up from 184% at June 30, 2026.
Total shareholders' equity was $534.2 million, or $31.75 book value per share, at September 30, 2026, compared to $535.2 million, or $31.51 book value per share, at June 30, 2026, and $514.3 million, or $30.18 book value per share at
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September 30, 2025. The decrease in shareholders' equity for the third quarter of 2026 compared to the prior quarter was due mostly to an increase in unrealized losses on AFS securities, net of tax, of $6.8 million, common stock repurchases totaling $4.5 million and common stock cash dividends paid totaling $2.7 million, partially offset by net income of $12.6 million and stock-based compensation activity of $450,000. Tangible book value per share increased to $27.44 at September 30, 2026, up from $27.23 at June 30, 2026 and $25.89 at September 30, 2025. We repurchased 168,768 shares during the third quarter of 2026 at an average price of $26.37 per share. We repurchased 180,576 shares during the second quarter of 2026 at an average price of $24.65 per share. For additional information on tangible book value per share, see "Non-GAAP Financial Measures."
ANALYSIS OF RESULTS OF OPERATIONS
Financial Performance
Three Months EndedNine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
(dollars in thousands, except per share data)
Interest and dividend income$59,307 $57,159 $57,392 $173,269 $163,933 
Interest expense27,546 27,073 28,115 80,919 81,159 
Net interest income31,761 30,086 29,277 92,350 82,774 
Provision for credit losses500 — 625 300 9,758 
Net interest income after provision for credit losses31,261 30,086 28,652 92,050 73,016 
Noninterest income5,105 3,018 3,293 12,374 14,066 
Noninterest expense19,548 19,022 18,683 57,828 57,698 
Income before income taxes16,818 14,082 13,262 46,596 29,384 
Income tax expense4,181 3,942 3,114 12,519 7,613 
Net income$12,637 $10,140 $10,148 $34,077 $21,771 
Pre-tax pre-provision income (1)
$17,318 $14,082 $13,887 $46,896 $39,142 
Share Data
Earnings per common share (2):
Basic$0.75 $0.60 $0.59 $2.01 $1.24 
Diluted0.74 0.59 0.59 1.99 1.24 
Performance Metrics
Return on average assets, annualized1.17%0.97%0.97%1.08%0.72%
Return on average shareholders’ equity, annualized9.34%7.64%7.85%8.55%5.67%
Return on average tangible common equity, annualized (1)
10.79%8.85%9.16%9.90%6.62%
Efficiency ratio (3)
53.02%57.46%57.36%55.22%59.58%
Tangible common equity to tangible assets (1)
11.05%11.01%10.67%11.05%10.67%
Tangible book value per share (1)
$27.44 $27.23 $25.89 $27.44 $25.89 
_____________________________
(1)Non-GAAP financial measure. See "Non-GAAP Financial Measures" for a reconciliation of this measure to their most comparable GAAP measure.
(2)Basic earnings per share is calculated by dividing net income to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares adjusted for the dilutive effect of outstanding stock options and restricted stock units using the treasury stock method.
(3)Ratio calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income.
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Average Balance Sheet, Interest and Yield/Rate Analysis
The principal component of our earnings is net interest income, which is the difference between the interest and fees earned on loans, cash and investments (interest-earning assets) and the interest paid on deposits and borrowed funds (interest-bearing liabilities). Net interest margin is net interest income as a percentage of average interest-earning assets for the period. The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income and net interest margin. The net interest spread is the yield on average interest-earning assets minus the cost of average interest-bearing liabilities. Our net interest income, interest spread, and net interest margin are sensitive to general business and economic conditions. These conditions include short-term and long-term interest rates, inflation, monetary supply, and the strength of the international, national and state economies, in general, and more specifically, the local economies in which we conduct business. Our ability to manage net interest income during changing interest rate environments will have a significant impact on our overall performance. We manage net interest income through affecting changes in the mix of interest-earning assets as well as the mix of interest-bearing liabilities, changes in the level of interest-bearing liabilities in proportion to interest-earning assets, and in the growth and maturity of earning assets. For additional information see “Capital Resources and Liquidity Management” and Part I, Item 3. "Quantitative and Qualitative Disclosures about Market Risk" included in this Report.
The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the periods presented. The average balances are daily averages and, for loans, include both performing and nonperforming balances. Interest and fees on securities, net interest margin and net
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interest spread are included on a tax equivalent (“TE”) basis by adjusting interest income utilizing the federal statutory tax rate of 21% for 2026 and 2025.
Three Months Ended
September 30, 2026June 30, 2026September 30, 2025
Average
Balance		Interest
& Fees		Yield /
Rate		Average
Balance		Interest
& Fees		Yield /RateAverage
Balance		Interest
& Fees		Yield /
Rate
(dollars in thousands)
Interest-earning assets:
Cash and cash equivalents (1)
$253,494 $2,541 3.98%$194,256 $2,015 4.16%$202,317 $2,380 4.67%
FHLB Stock15,000 539 14.26%15,000 222 5.94%15,000 327 8.65%
Securities (2)
Available for sale388,267 4,013 4.10%419,191 4,245 4.06%429,936 4,578 4.22%
Held to maturity4,180 38 3.61%4,182 38 3.64%4,186 38 3.60%
Total loans (3)
3,326,368 52,200 6.23%3,315,864 50,663 6.13%3,245,193 50,094 6.12%
Total interest-earning assets3,987,309 59,331 5.90%3,948,493 57,183 5.81%3,896,632 57,417 5.85%
Noninterest-earning assets279,828 262,546 255,052 
Total average assets$4,267,137 $4,211,039 $4,151,684 
Interest-bearing liabilities:
NOW$91,562 $549 2.38%$83,681 $478 2.29%$69,800 $406 2.31%
Money market585,542 4,513 3.06%556,084 4,189 3.02%491,561 3,861 3.12%
Savings deposits521,545 3,983 3.03%589,187 4,529 3.08%138,344 407 1.17%
Time deposits, $250,000 and under796,245 7,011 3.49%837,026 7,322 3.51%1,050,682 10,312 3.89%
Time deposits, greater than $250,000826,196 7,772 3.73%768,027 7,076 3.70%960,094 9,840 4.07%
Total interest-bearing deposits2,821,090 23,828 3.35%2,834,005 23,594 3.34%2,710,481 24,826 3.63%
FHLB advances197,174 1,969 3.96%116,813 1,051 3.61%185,217 1,654 3.54%
Long-term debt80,000 1,434 7.11%120,000 2,118 7.08%119,752 1,295 4.29%
Subordinated debentures15,502 315 8.06%15,448 310 8.05%15,284 340 8.83%
Total borrowings292,676 3,718 5.04%252,261 3,479 5.53%320,253 3,289 4.07%
Total interest-bearing liabilities3,113,766 27,546 3.51%3,086,266 27,073 3.52%3,030,734 28,115 3.68%
Noninterest-bearing liabilities
Noninterest-bearing deposits564,033 535,756 541,083 
Other noninterest-bearing liabilities52,345 56,608 66,993 
Total noninterest-bearing liabilities616,378 592,364 608,076 
Shareholders' equity536,993 532,409 512,874 
Total liabilities and shareholders' equity$4,267,137 $4,211,039 $4,151,684 
Net interest income/interest rate spreads$31,785 2.39%$30,110 2.29%$29,302 2.17%
Net interest margin3.16%3.06%2.98%
Total cost of deposits$3,385,123 $23,828 2.79%$3,369,761 $23,594 2.81%$3,251,564 $24,826 3.03%
Total cost of funds$3,677,799 $27,546 2.97%$3,622,022 $27,073 3.00%$3,571,817 $28,115 3.12%
(1)Includes income and average balances for interest-earning time deposits and other miscellaneous interest-earning assets.
(2)Interest income and average rates for tax-exempt securities are presented on a tax-equivalent basis.
(3)Average loan balances include nonaccrual loans. Interest income on loans includes the effects of discount accretion and net deferred loan origination fees and costs accounted for as yield adjustments.
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Nine Months Ended September 30,
20262025
Average
Balance		Interest
& Fees		Yield /RateAverage
Balance		Interest
& Fees		Yield /
Rate
(dollars in thousands)
Interest-earning assets:
Cash and cash equivalents (1)
$221,364 $6,692 4.04%$186,827 $6,609 4.73%
FHLB Stock15,000 1,521 13.56%15,000 981 8.74%
Securities: (2)
Available for sale403,963 12,214 4.04%406,655 12,880 4.23%
Held to maturity4,182 113 3.61%4,797 135 3.76%
Total loans (3)
3,312,910 152,801 6.17%3,165,937 143,402 6.06%
Total interest-earning assets (2)
3,957,419 173,341 5.86%3,779,216 164,007 5.80%
Total noninterest-earning assets270,171 256,509 
Total average assets$4,227,590 $4,035,725 
Interest-bearing liabilities:
NOW$83,026 $1,425 2.29%$65,957 $1,095 2.22%
Money market557,087 12,497 3.00%479,328 11,260 3.14%
Savings deposits517,579 11,667 3.01%144,895 1,354 1.25%
Time deposits, $250,000 and under852,689 22,645 3.55%1,012,408 30,126 3.98%
Time deposits, greater than $250,000813,265 22,756 3.74%916,162 28,360 4.14%
Total interest-bearing deposits2,823,646 70,990 3.36%2,618,750 72,195 3.69%
FHLB advances148,242 4,153 3.75%173,810 4,063 3.13%
Long-term debt106,502 4,841 6.08%119,658 3,887 4.34%
Subordinated debentures15,449 935 8.09%15,230 1,014 8.90%
Total Borrowings270,193 9,929 4.91%308,698 8,964 3.88%
Total interest-bearing liabilities3,093,839 80,919 3.50%2,927,448 81,159 3.71%
Noninterest-bearing liabilities
Noninterest-bearing deposits542,119 529,190 
Other noninterest-bearing liabilities58,677 66,142 
Total noninterest-bearing liabilities600,796 595,332 
Shareholders' equity532,955 512,945 
Total liabilities and shareholders' equity$4,227,590 $4,035,725 
Net interest income/interest rate spreads(2)
$92,422 2.36%$82,848 2.09%
Net interest margin3.12%2.93%
Total cost of deposits$3,365,765 $70,990 2.82%$3,147,940 $72,195 3.07%
Total cost of funds$3,635,958 $80,919 2.98%$3,456,638 $81,159 3.14%
(1)Includes income and average balances for interest-earning time deposits and other miscellaneous interest-earning assets.
(2)Interest income and average rates for tax-exempt securities are presented on a tax-equivalent basis.
(3)Average loan balances include nonaccrual loans. Interest income on loans includes the effects of discount accretion and net deferred loan origination fees and costs accounted for as yield adjustments.
The following table summarizes the extent to which changes in (1) interest rates and (2) volume of average interest-earning assets and average interest-bearing liabilities affected our net interest income for the periods presented. The total change for each category of interest-earning assets and interest-bearing liabilities is segmented into changes attributable to variations
49
in volume and yield/rate. Changes that are not solely due to either volume or yield/rate are allocated proportionally based on the absolute value of the change related to average volume and average yield/rate.
Three Months Ended September 30, 2026 compared with Three Months Ended June 30, 2026Three Months Ended September 30, 2026 compared with Three Months Ended September 30, 2025Nine Months Ended September 30, 2026 compared with Nine Months Ended September 30, 2025
Change due to:Change due to:Change due to:
VolumeYield/RateInterest VarianceVolumeYield/RateInterest VarianceVolumeYield/RateInterest Variance
Interest-earning assets:(dollars in thousands)
Cash and cash equivalents (1)
$1,074 $(548)$526 $1,865 $(1,703)$162 $1,622 $(1,539)$83 
FHLB Stock— 317 317 — 212 212 — 540 540 
Securities: (2)
Available for sale(501)269 (232)(437)(128)(565)(86)(580)(666)
Held to maturity— — — — — — (16)(4)(20)
Total loans (3)
249 1,288 1,537 1,225 881 2,106 6,670 2,729 9,399 
Total interest-earning assets (2)
$822 $1,326 $2,148 $2,653 $(738)$1,915 $8,190 $1,146 $9,336 
Interest-bearing liabilities:
NOW$50 $21 $71 $130 $13 $143 $286 $44 $330 
Money market259 65 324 1,128 (476)652 2,120 (883)1,237 
Savings deposits(478)(68)(546)2,272 1,304 3,576 3,490 6,823 10,313 
Time deposits, less than $250,000(278)(33)(311)(2,317)(984)(3,301)(4,744)(2,737)(7,481)
Time deposits, $250,000 and over629 67 696 (1,293)(775)(2,068)(3,178)(2,426)(5,604)
Total interest-bearing deposits182 52 234 (80)(918)(998)(2,026)821 (1,205)
FHLB advances805 113 918 111 204 315 (813)903 90 
Long-term debt(747)63 (684)(2,219)2,358 139 (648)1,602 954 
Subordinated debentures3 2 5 29 (54)(25)23 (102)(79)
Total interest-bearing liabilities243 230 473 (2,159)1,590 (569)(3,464)3,224 (240)
Changes in net interest income$579 $1,096 $1,675 $4,812 $(2,328)$2,484 $11,654 $(2,078)$9,576 
(1)Includes income and average balances for interest-earning time deposits and other miscellaneous interest-earning assets.
(2)Interest income and average rates for tax-exempt securities are presented on a tax-equivalent basis.
(3)Average loan balances include nonaccrual loans. Interest income on loans includes the effects of discount accretion and net deferred loan origination fees and costs accounted for as yield adjustments.
Net Interest Income/Average Balance Sheet
Three Months Ended September 30, 2026 Compared to Three Months Ended June 30, 2026
Net interest income was $31.8 million for the third quarter of 2026, compared to $30.1 million for the second quarter of 2026. The $1.7 million increase was due to a $2.1 million increase in interest income, offset by a $473,000 increase in interest expense. The increase in interest income was due to the combination of a $1.5 million increase in loan interest income as average loans and nonaccrual interest recoveries increased, the impact of one additional day in the quarter, and a special dividend of $320,000 from the FHLB in the third quarter of 2026. There was no special dividend from the FHLB in the second quarter of 2026. The increase in interest expense was due to a $234,000 increase in interest on deposits, which is attributed largely to one additional day in the quarter, and a $239,000 increase in interest on total borrowings. The increase in total borrowings was due mainly to the impact of higher average FHLB advances, partially offset by the impact of lower average long-term debt outstanding.
The net interest margin ("NIM") was 3.16% for the third quarter of 2026, an increase of 10 basis points from 3.06% for the second quarter of 2026. The NIM increase included a 9 basis point increase in the yield on average total interest-earning assets, combined with a 3 basis point decrease in the overall cost of funds. The yield on average interest-earning assets increased to 5.90% for the third quarter of 2026 from 5.81% for the second quarter of 2026 due mostly to the impact of higher nonaccrual interest recoveries on loans and the FHLB special dividend received in the third quarter.
The average cost of funds decreased to 2.97% for the third quarter of 2026 from 3.00% for the second quarter of 2026, due mostly to a decrease in the average cost of total borrowings due to the partial redemption of $40.0 million of subordinated notes on July 1, 2026. The average cost of interest-bearing deposits increased to 3.35% for the third quarter of
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2026 from 3.34% for the second quarter of 2026. The overall funding mix for the third quarter of 2026 remained relatively unchanged from the second quarter of 2026 with average interest-bearing deposits representing 91% of average interest-bearing liabilities and average noninterest-bearing deposits representing 17% of average total deposits. The period end weighted average interest rate for total deposits was 2.82% at September 30, 2026 compared to 2.75% at June 30, 2026. The increase is due in part to the impact of the recent 25 basis point increase to the Federal funds rate.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Net interest income increased $2.5 million to $31.8 million for the third quarter of 2026, compared to $29.3 million for the third quarter of 2025. The increase in net interest income was due to an increase in interest income of $1.9 million, combined with a $569,000 decrease in interest expense. The increase in interest income was primarily due to average interest-earning asset growth of $90.7 million, or 2.3%, as compared to the same quarter in 2025. The growth in average interest-earning assets included higher average total loans and cash and cash equivalents. The impact of higher average interest-earning assets on income was partially offset by lower market interest rates as compared to the same period in 2025. The decrease in interest expense was driven largely by a decrease in the cost of deposits due to lower market rates combined with the impact of lower average long-term debt from the partial redemption of the subordinated notes and partially offset by an increase in the cost of the remaining long-term debt.
The $1.9 million increase in interest income was due mainly to a $2.1 million increase in interest income from average total loans, of which $1.2 million was attributed to higher average balances, and $881,000 attributed mostly to higher nonaccrual interest recoveries which increased the yield by 7 basis points. Average total loans were $3.3 billion for the quarter ended September 30, 2026, an increase of $81.2 million, or 2.50%, compared to the third quarter of 2025. The yield on average total loans increased 11 basis points to 6.23% for the quarter ended September 30, 2026 compared to 6.12% for the quarter ended September 30, 2025 due mostly to higher nonaccrual interest recoveries.
The $569,000 decrease in interest expense was due mainly to a $1.0 million decrease in interest expense on deposits, partly offset by higher interest expense on total borrowings of $429,000. The decrease in interest expense on deposits was primarily due to a decrease in market rates which resulted in a 28 basis point decrease in the rates paid on average interest-bearing deposits, partially offset by the impact of a $110.6 million increase in the average balance of interest-bearing deposits. The average Federal Funds rate declined from 4.46% for the three months ended September 30, 2025, to 3.79% for the three months ended September 30, 2026. Interest expense on total borrowings increased mainly due to the subordinated notes being fixed at 4.00% for the third quarter of 2025 compared to 7.02% for the third quarter of 2026, offset by the impact of lower average long-term debt outstanding.
The NIM was 3.16% for the third quarter of 2026, an increase of 18 basis points from 2.98% for the third quarter of 2025. The increase was primarily due to a 15 basis point decrease in the total cost of funds to 2.97%, and a 5 basis point increase in the yield on average interest-earning assets to 5.90% for the third quarter of 2026. The decrease in funding costs was due to the lower average cost of interest-bearing deposits in response to lower market rates, offset by the higher average cost for total borrowings. Average noninterest-bearing deposits totaled $564.0 million, or 17% of total average deposits, for the third quarter of 2026 compared to $541.1 million, or 17% of total average deposits, for the third quarter of 2025. The increase in the yield on average interest-earning assets was due mainly to an 11 basis point increase in the yield on average total loans.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net interest income increased $9.6 million to $92.4 million for the nine months ended September 30, 2026, compared to $82.8 million for the nine months ended September 30, 2025. The increase in net interest income was due to an increase in interest income of $9.3 million coupled with a decrease in interest expense of $240,000. The increase in interest income was due primarily to higher income on loans due to a higher average balance and higher yield. The decrease in interest expense was primarily due to lower average rates paid on deposits partially offset by higher interest expense on total borrowings.
Interest and fees on total loans increased $9.4 million for the nine months ended September 30, 2026 primarily due to a $147.0 million increase in the average balance of total loans from loan growth since the end of the third quarter of 2025. The yield on loans increased 11 basis points to 6.17% for the nine months ended September 30, 2026 from 6.06% for the same period in 2025.
Interest expense on deposits decreased $1.2 million to $71.0 million for the nine months ended September 30, 2026 compared to $72.2 million for the nine months ended September 30, 2025. The decrease in interest expense on deposits
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was primarily due to a decrease in market rates which resulted in a decrease in the average rates paid on interest-bearing deposits to 3.36% for the nine months ended September 30, 2026 compared to 3.69% for the nine months ended September 30, 2025. The average Federal Funds rate declined from 4.49% for the nine months ended September 30, 2025, to 3.76% for the nine months ended September 30, 2026. The effect of the decrease in the average rate paid on deposits was partially offset by an increase in average interest-bearing deposit balances of $204.9 million to $2.8 billion for the nine months ended September 30, 2026. Average noninterest-bearing deposits totaled $542.1 million, or 16.1% of total average deposits, for the first nine months of 2026, compared to $529.2 million, or 16.8% of total average deposits, for the first nine months of 2025.
Partially offsetting the decrease in interest expense on deposits was an increase in interest expense on total borrowings of $1.0 million for the first nine months of 2026. The increase was mainly due to the effective rate of the subordinated notes moving from 4.34% for the nine months ended September 30, 2025, to 6.08% for the nine months ended September 30, 2025, due to the subordinated note rate bearing a fixed rate of 4.00%, plus amortization of issuance costs, during 2025 and then moving to a floating rate index that resets quarterly starting on April 1, 2026.
The NIM was 3.12% for the nine months ended September 30, 2026, an increase of 19 basis points from 2.93% for the nine months ended September 30, 2025. The increase was primarily due to a 16 basis point decrease in the average cost of funds, including a 25 basis point decrease in the cost of average deposits, and a 6 basis point increase in the yield on average interest-earning assets, including an 11 basis point increase in the yield on average loans.
Provision for Credit Losses
Three Months Ended September 30, 2026 Compared to Three Months Ended June 30, 2026
The provision for credit losses was $500,000 for the third quarter of 2026 compared to no provision for the second quarter of 2026. The third quarter of 2026 provision for credit losses reflected a provision for loan losses of $500,000 and no provision for unfunded commitments. The third quarter provision for loan losses was due mainly to the impact of net loan growth, partially offset by improved credit quality trends and underlying economic forecast indicators. Net charge-offs on an annualized basis represented 0.01% of average loans for both the third quarter of 2026 and the second quarter of 2026.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
The provision for credit losses was $500,000 for the third quarter of 2026 compared to a $625,000 provision for the third quarter of 2025. The third quarter of 2025 provision was primarily due to loan growth, partially offset by the impact of reductions in nonperforming, classified, criticized and delinquent loans during the quarter. Net loan charge-offs of $122,000 for the third quarter of 2026 were lower than net charge-offs of $6.9 million for the third quarter of 2025, of which $6.6 million represented specific reserves.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
The provision for credit losses was $300,000 for the nine months ended September 30, 2026 compared to a $9.8 million provision for the nine months ended September 30, 2025. This $9.5 million decrease was primarily due to lower net charge-offs, combined with the impact of declines in nonperforming, classified, and criticized loans since September 30, 2025. There were $227,000 in net loan charge-offs for the nine months ended September 30, 2026, as compared to $12.8 million in net loan charge-offs for the nine months ended September 30, 2025.
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Noninterest Income
The following table presents the major components of our noninterest income for the periods presented:
Three Months EndedNine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Noninterest income:(dollars in thousands)
Service charges and fees$1,110 $1,104 $1,099 $3,246 $3,176 
Gain on sale of loans89 964 260 1,377 699 
Loan servicing income, net of amortization525 533 564 1,562 1,693 
Increase in cash surrender value of BOLI449 438 427 1,318 1,241 
(Loss)/gain on OREO— (221)— 669 — 
Other income2,932 200 943 4,202 7,257 
Total noninterest income$5,105 $3,018 $3,293 $12,374 $14,066 
Three Months Ended September 30, 2026 Compared to Three Months Ended June 30, 2026
Noninterest income for the third quarter of 2026 was $5.1 million, an increase of $2.1 million from $3.0 million for the second quarter of 2026. This increase was mainly due to higher other income of $2.7 million, offset partially by lower gain on sale of loans of $875,000 due to lower sales volume. The increase in other income was due to a $2.7 million gain on the sale of the Bank's office building in Brooklyn, New York. As part of the sale, the Bank entered into a four month lease to house the Bank's loan operations center through the end of 2026. These operations will relocate to new leased space, also located in Brooklyn, starting in 2027.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Noninterest income increased $1.8 million to $5.1 million for the third quarter of 2026 from $3.3 million for the same quarter in the prior year. This increase was mainly due to higher other income of $2.0 million, offset partially by lower gain on sale of loans of $171,000 due to lower sales volume. The increase in other income was primarily due to the $2.7 million gain on the sale of the Bank's office building in Brooklyn, New York, offset by $620,000 in lower gains on equity investments.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Noninterest income decreased $1.7 million to $12.4 million for the nine months ended September 30, 2026, compared to $14.1 million for the same period in the prior year. This decrease was mainly due to 2025 including other income of $5.2 million for the receipt of Employee Retention Credit ("ERC") funds from the Internal Revenue Service while the 2026 period included the $2.7 million gain on the sale of the office building. This decrease in other income was partially offset by a higher gain on sale of loans of $678,000 and higher gain on OREO of $669,000 for the nine months ended September 30, 2026 compared to the same period in 2025.
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The following table presents information on loans sold and the related net gain (loss) on the sale of such loans for the periods indicated:
Three Months EndedNine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Loans sold:(dollars in thousands)
Single-family residential mortgage (1)
$1,630 $42,108 $14,278 $48,613 $37,509 
SBA1,119 8,101 1,896 13,209 7,920 
Other (2)
— — — — 4,579 
$2,749 $50,209 $16,174 $61,822 $50,008 
Gain (loss) on sale of loans:
Single-family residential mortgage (1)
$24 $663 $174 $755 $441 
SBA65 301 86 598 341 
Other (2)
— — — 24 (83)
$89 $964 $260 $1,377 $699 
(1)SFR mortgage loans sold with servicing rights retained were $1.6 million, $12.8 million, and $3.4 million for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025. SFR mortgage loans sold with servicing rights retained were $17.7 million and $5.5 million for the nine months ended September 30, 2026 and 2025.
(2)Other loans sold in the nine months ended September 30, 2025 related to loans sold in the first quarter of 2025, which represented nonperforming loans HFS at December 31, 2024.
The following table presents information on loan servicing income for the periods indicated:
Three Months EndedNine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Loan servicing income, net of amortization:(dollars in thousands)
Single-family residential$314 $350 $369 $1,010 $1,163 
SBA 211 183 195 552 530 
Total$525 $533 $564 $1,562 $1,693 
As of September 30, 2026, we were servicing SFR mortgage loans for other financial institutions, the Federal Home Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage Association ("FNMA"), and SBA loans. The following table presents loans serviced for others as of the dates indicated:
As ofSeptember 30, 2026 Compared to
September 30, 2026June 30, 2026September 30, 2025June 30, 2026September 30, 2025
Loans serviced:
(dollars in thousands)
Single-family residential $746,083 $803,175 $850,189 $(57,092)$(104,106)
SBA 96,642 96,652 88,166 (10)8,476 
Construction and land development9,742 9,505 2,429 237 7,313 
Commercial real estate 2,392 2,401 8,772 (9)(6,380)
Total$854,859 $911,733 $949,556 $(56,874)$(94,697)
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Noninterest Expense
The following table presents major components of our noninterest expense for the periods presented:
Three Months EndedNine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Noninterest expense:(dollars in thousands)
Salaries and employee benefits$11,467 $11,045 $10,600 $33,773 $32,323 
Occupancy and equipment 2,587 2,449 2,425 7,547 7,209 
Data processing1,722 1,690 1,805 5,120 5,120 
Legal and professional1,306 1,311 1,450 4,120 5,869 
Office expenses394 377 444 1,130 1,257 
Marketing and business promotion193 178 252 586 661 
Insurance and regulatory assessments743 746 732 2,238 2,171 
Core deposit intangible amortization126 127 172 387 516 
Other expenses1,010 1,099 803 2,927 2,572 
Total noninterest expense$19,548 $19,022 $18,683 $57,828 $57,698 
Three Months Ended September 30, 2026 Compared to Three Months Ended June 30, 2026
Noninterest expense for the third quarter of 2026 was $19.5 million, an increase of $526,000 from $19.0 million for the second quarter of 2026. This increase was mainly due to higher salaries and employee benefits and occupancy and equipment costs. Both of these categories increased due to including a full quarter of operations for the Northern California loan production office. In addition, occupancy costs included rent for the Brooklyn loan operations center after the sale of the building. The efficiency ratio was 53.02% for the third quarter of 2026, compared to 57.46% for the second quarter of 2026.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Noninterest expense for the third quarter of 2026 was $19.5 million, an increase of $865,000 compared to $18.7 million for the third quarter of 2025, mainly due to an increase in salaries and benefits expense of $867,000. The increase in salaries and benefits expense was due mainly to the impact of annual pay increases and the addition of the Northern California loan production office in 2026. The efficiency ratio was 53.02% for the third quarter of 2026 and 57.36% for the third quarter of 2025.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Noninterest expense for the nine months ended September 30, 2026 was $57.8 million, an increase of $130,000 from $57.7 million for the nine months ended September 30, 2025. This increase was primarily due to an increase in salaries and employee benefits expense of $1.5 million and occupancy expense of $338,000 partially offset by a decrease in legal and professional expense of $1.7 million. The increase in salaries and employee benefits was due mainly to the impact of annual pay increases and the addition of the Northern California loan production office in June 2026. The increase in occupancy costs included the impact of the new loan production office and Brooklyn building sale in 2026. The decrease in legal and professional expense was due mainly to $1.2 million of ERC advisory costs incurred in 2025 versus no similar fee in 2026 and lower legal costs related to credit, operations, and other corporate governance in 2026 compared to 2025. The efficiency ratio was 55.22% for the nine months ended September 30, 2026, down from 59.58% for the nine months ended September 30, 2025 due to the combination of $7.9 million in revenue growth while noninterest expense remained flat. The operating expense ratio was 1.83% for the nine months ended September 30, 2026, down from 1.91% for the nine months ended September 30, 2025.
Income Tax Expense
We recorded an income tax provision of $4.2 million, $3.9 million, and $3.1 million, reflecting an effective tax rate of 24.9%, 28.0%, and 23.5% for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025. The
55
decrease in the effective tax rate for the third quarter compared to the second quarter of 2026 was due to higher benefits from purchased Federal tax credits in the current quarter.
We recorded an income tax provision of $12.5 million and $7.6 million, reflecting an effective tax rate of 26.9% and 25.9%, for the nine months ended September 30, 2026 and 2025. The increase in the effective tax rate for the nine months ended September 30, 2026 compared to 2025 was due mainly to lower benefits from purchased Federal tax credits in the current year combined with a favorable impact in the prior year from the reversal of accrued penalties related to state tax planning initiatives. The full year effective tax rate for 2026 is estimated to be in the 26% to 27% range.
ANALYSIS OF FINANCIAL CONDITION
Total Assets. At September 30, 2026, total assets were $4.3 billion, an increase of $43.0 million, from total assets of $4.2 billion at December 31, 2025. The increase was primarily due to an $84.9 million increase in loans held for investment, partially offset by a decrease of $25.9 million in investment securities available for sale.
Cash and Cash Equivalents. Cash and cash equivalents decreased $22.0 million, or 10%, to $190.3 million as of September 30, 2026 as compared to $212.3 million at December 31, 2025. Cash and cash equivalents tend to fluctuate period to period based upon loan, deposit and borrowing activity.
Investment Securities. We manage our securities portfolio and cash to maintain adequate liquidity and to ensure the safety and preservation of invested principal, with a secondary focus on yield and returns. Specific goals of our investment portfolio include:
•providing a ready source of balance sheet liquidity to ensure adequate availability of funds to meet fluctuations in loan demand, deposit balances and other changes in balance sheet volumes and composition;
•serving as a means for diversification of our assets with respect to credit quality, maturity and other attributes; and
•serving as a tool for modifying our interest rate risk profile pursuant to our established policies.
Our investment portfolio is comprised primarily of U.S. government and SBA agency securities, mortgage-backed securities ("MBS") backed by government-sponsored entities, collateralized mortgage obligations ("CMO"), commercial paper, and municipal tax-exempt securities.
Our investment policy is reviewed annually by our board of directors. Overall investment goals are established by our board of directors, Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and members of our Asset Liability Committee (“ALCO”) of our board of directors. Our board of directors has delegated the responsibility of monitoring our investment activities to our ALCO. Day-to-day activities pertaining to the securities portfolio are conducted under the supervision of our CEO and CFO. We actively monitor our investments on an ongoing basis to identify any material changes in the securities. We monitor our securities portfolio to ensure it has adequate credit support and consider the lowest credit rating for identification of potential credit impairment.
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The following table presents the book value of each category of securities and the percentage each category represents of total of securities as of the dates indicated. The book value for debt securities classified as AFS is reflected at fair market value and the book value for securities classified as HTM is reflected at amortized cost.
September 30, 2026December 31, 2025
Amount% of TotalAmount% of Total
Securities, available for sale, at fair value(dollars in thousands)
Government agency securities$18,176 4.7%$22,705 5.5%
SBA agency securities18,531 4.8%21,180 5.1%
MBS: Residential86,574 22.5%87,178 21.2%
MBS: Commercial9,936 2.6%4,977 1.2%
CMO: Residential102,441 26.6%112,495 27.3%
CMO: Commercial74,529 19.3%100,777 24.6%
Commercial paper39,699 10.3%19,948 4.9%
Corporate debt securities (1)
23,091 6.0%28,429 6.9%
Municipal tax-exempt securities8,367 2.2%9,515 2.3%
Total securities, available for sale, at fair value$381,344 99.0%$407,204 99.0%
Securities, held to maturity, at amortized cost
Municipal tax-exempt securities$4,179 1.0%$4,184 1.0%
Total securities, held to maturity, at amortized cost4,179 1.0%4,184 1.0%
Total securities$385,523 100.0%$411,388 100.0%
_______________________________
(1)Comprised of corporate note securities and financial institution subordinated debentures.
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The tables below set forth investment debt securities AFS and HTM as of the dates indicated.
September 30, 2026Amortized
Cost		Gross Unrealized
Gains		Gross Unrealized
Losses		Fair
Value
(dollars in thousands)
Available for sale
Government agency securities$18,725 $12 $(561)$18,176 
SBA agency securities19,437 9 (915)18,531 
MBS: Residential95,306 — (8,732)86,574 
MBS: Commercial10,003 — (67)9,936 
CMO: Residential114,623 13 (12,195)102,441 
CMO: Commercial76,949 116 (2,536)74,529 
Commercial paper39,722 — (23)39,699 
Corporate debt securities24,595 14 (1,518)23,091 
Municipal tax-exempt securities12,541 — (4,174)8,367 
Total available for sale$411,901 $164 $(30,721)$381,344 
Held to maturity
Municipal tax-exempt securities$4,179 $— $(376)$3,803 
Total held to maturity$4,179 $— $(376)$3,803 
December 31, 2025
Available for sale
Government agency securities$22,850 $34 $(179)$22,705 
SBA agency securities21,326 90 (236)21,180 
MBS: Residential91,049 634 (4,505)87,178 
MBS: Commercial5,010 — (33)4,977 
CMO: Residential120,475 760 (8,740)112,495 
CMO: Commercial102,755 183 (2,161)100,777 
Commercial paper19,948 — — 19,948 
Corporate debt securities30,165 75 (1,811)28,429 
Municipal tax-exempt securities12,567 — (3,052)9,515 
Total available for sale$426,145 $1,776 $(20,717)$407,204 
Held to maturity
Municipal tax-exempt securities$4,184 $— $(81)$4,103 
Total held to maturity$4,184 $— $(81)$4,103 
The weighted-average life of the total investment portfolio was 4.8 years at September 30, 2026, and 4.9 years at December 31, 2025. The weighted-average life is the average number of years that each dollar of unpaid principal due remains outstanding. Average life is computed as the weighted-average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal pay-downs.
The following tables show the amortized cost and fair value of the investment securities portfolio, by expected maturity, as of the dates indicated. However, expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Accordingly, MBS and CMO securities are classified in accordance with their estimated average life.
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One Year or LessMore than One Year to Five YearsMore than Five Years to Ten YearsMore than Ten YearsTotal
Fair
Value		Weighted
Average Yield		Fair
Value		Weighted
Average Yield		Fair
Value		Weighted
Average Yield		Fair
Value		Weighted
Average Yield		Fair
Value		Weighted
Average Yield
September 30, 2026(dollars in thousands)
Government agency securities$650 5.25%$8,292 3.86%$9,234 4.58%$— —%$18,176 4.28%
SBA agency securities— —%5,765 4.24%12,766 4.81%— —%18,531 4.63%
MBS: Residential— —%18,894 3.81%67,680 3.95%— —%86,574 3.92%
MBS: Commercial4,947 5.95%4,989 4.12%— —%— —%9,936 5.03%
CMO: Residential604 4.87%68,630 4.56%33,207 1.80%— —%102,441 3.54%
CMO: Commercial3,358 3.28%30,797 3.98%40,374 4.04%— —%74,529 3.98%
Commercial paper39,699 4.16%— —%— —%— —%39,699 4.16%
Corporate debt securities1,999 3.29%10,948 4.69%7,434 4.33%2,710 3.97%23,091 4.36%
Municipal tax-exempt securities— —%— —%820 1.53%7,547 2.11%8,367 2.06%
Total available for sale$51,257 4.26%$148,315 4.29%$171,515 3.66%$10,257 2.60%$381,344 3.92%
Municipal tax-exempt securities$— —%$1,633 3.58%$2,170 3.49%$— —%$3,803 3.53%
Total held to maturity$— —%$1,633 3.58%$2,170 3.49%$— —%$3,803 3.53%
The table below shows our investment securities’ gross unrealized losses and estimated fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2026 and December 31, 2025. The unrealized losses on these securities were primarily attributed to changes in interest rates. There was no ACL on the AFS or HTM securities portfolios as of September 30, 2026 or December 31, 2025. We monitor our securities portfolio to ensure that all our investments have adequate credit support and we consider the lowest credit rating for identification of potential impairment. The issuers of these securities have not, to our knowledge, evidenced any cause for default on these securities. As of September 30, 2026, all our investment securities in an unrealized loss position received an investment grade credit rating. These securities have fluctuated in value since their purchase dates as market rates have also fluctuated. However, we have the ability and the intention to hold these securities until their fair values recover to cost or until their respective maturity dates. As such, management does not deem these securities to be impaired under the current expected credit loss model. A summary of our analysis of these securities and the unrealized losses is described more fully in "Note 3 —Investment Securities" of our audited consolidated financial statements included in our 2025 Annual Report. Economic trends may adversely affect the value of the portfolio of investment securities that we hold.
Less than Twelve MonthsTwelve Months or MoreTotal
Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
September 30, 2026(dollars in thousands)
Government agency securities$9,883 $(433)$4,497 $(128)$14,380 $(561)
SBA agency securities14,129 (659)2,541 (256)16,670 (915)
MBS: Residential63,072 (3,125)23,502 (5,607)86,574 (8,732)
MBS: Commercial9,936 (67)— — 9,936 (67)
CMO: Residential51,325 (1,517)45,203 (10,678)96,528 (12,195)
CMO: Commercial4,106 (21)47,376 (2,515)51,482 (2,536)
Commercial paper24,705 (23)— — 24,705 (23)
Corporate debt securities2,944 (56)15,626 (1,462)18,570 (1,518)
Municipal tax-exempt securities— — 8,367 (4,174)8,367 (4,174)
Total available for sale$180,100 $(5,901)$147,112 $(24,820)$327,212 $(30,721)
Municipal tax-exempt securities$1,521 $(109)$2,282 $(267)$3,803 $(376)
Total held to maturity$1,521 $(109)$2,282 $(267)$3,803 $(376)
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Less than Twelve MonthsTwelve Months or MoreTotal
Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
December 31, 2025(dollars in thousands)
Government agency securities$1,749 $(6)$6,572 $(173)$8,321 $(179)
SBA agency securities7,654 (93)2,962 (143)10,616 (236)
MBS: Residential14,196 (91)27,573 (4,414)41,769 (4,505)
MBS: Commercial4,977 (33)— — 4,977 (33)
CMO: Residential3,130 (1)53,195 (8,739)56,325 (8,740)
CMO: Commercial13,947 (31)49,366 (2,130)63,313 (2,161)
Corporate debt securities— — 22,577 (1,811)22,577 (1,811)
Municipal tax-exempt securities— — 9,515 (3,052)9,515 (3,052)
Total available for sale$45,653 $(255)$171,760 $(20,462)$217,413 $(20,717)
Municipal tax-exempt securities$— $— $3,663 $(81)$3,663 $(81)
Total held to maturity$— $— $3,663 $(81)$3,663 $(81)
Loans
The loan portfolio is the largest category of our earning assets. Loans HFI increased $84.9 million to $3.4 billion at September 30, 2026 since December 31, 2025. The increase was primarily due to increases in SFR mortgage loans of $106.0 million and commercial and industrial ("C&I") loans of $11.7 million, partially offset by decreases in CRE loans of $23.0 million, SBA loans of $7.5 million, and construction and land development ("C&D") loans of $844,000. SFR mortgage loans represented 51.8% of our total HFI loans as of September 30, 2026 and 50.0% at December 31, 2025. There were no loans HFS at September 30, 2026 compared to $2.1 million loans HFS at December 31, 2025.
The following table presents the balance and associated percentage of each major category in our loan portfolio as of the dates indicated:
As of September 30, 2026As of December 31, 2025
$%$%
Loans HFI:(1)
(dollars in thousands)
Single-family residential mortgages$1,761,352 51.8%$1,655,382 50.0%
Commercial real estate (2)
1,280,028 37.7%1,303,019 39.3%
Construction and land development154,620 4.5%155,464 4.7%
Commercial and industrial151,796 4.5%140,061 4.2%
SBA48,525 1.4%55,978 1.7%
Other loans2,893 0.1%4,397 0.1%
Total loans HFI3,399,214 100.0%3,314,301 100.0%
Allowance for loan losses(44,038)(43,888)
Total loans HFI, net$3,355,176 $3,270,413 
____________________________________
(1)Net of premiums (discounts) on acquired loans and net deferred (fees) and costs on originated loans.
(2)Includes non-farm and non-residential real estate loans, multifamily residential loans and non-owner occupied single-family residential loans.
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The following table presents the geographic locations of loans in our loan HFI portfolio, by loan class, as of the date indicated:
As of September 30, 2026
Single-family Residential MortgagesCommercial Real EstateConstruction and Land DevelopmentCommercial and IndustrialSBAOtherTotal Loans HFI
$$$$$$$%
Loans HFI:(dollars in thousands)
California$757,993 $916,536 $97,487 $135,971 $32,194 $57 $1,940,238 57.1%
New York814,670 169,527 57,133 704 2,908 199 1,045,141 30.7%
New Jersey55,666 7,238 — 45 1,875 8 64,832 1.9%
Illinois54,943 8,233 — 255 — — 63,431 1.9%
Nevada21,010 33,739 — 3,294 1,891 — 59,934 1.8%
Hawaii17,289 — — 41 — — 17,330 0.5%
Other39,781 144,755 — 11,486 9,657 2,629 208,308 6.1%
Total loans HFI$1,761,352 $1,280,028 $154,620 $151,796 $48,525 $2,893 $3,399,214 100.0%
The majority of our loan portfolio is based on collateral or businesses located in California and New York, which represented 87.8% of our loan portfolio. Loans secured by collateral in other states represented approximately 12.2% of our portfolio and the majority of these loans are secured by real estate with a weighted average loan-to-value ("LTV") ratio of 55% at September 30, 2026.
SFR loans. SFR loans totaled $1.8 billion, or 51.8% of our loans HFI portfolio, as of September 30, 2026. SFR loans increased $106.0 million, or 6.4%, during the first nine months of 2026 due to higher originations relative to payoffs, paydowns and sales. As of September 30, 2026, the weighted-average LTV ratio of the portfolio was 54%, the weighted average FICO score was 765, and the weighted average age since origination was 3.6 years.
We originate qualified SFR mortgage loans and non-qualified, alternative documentation SFR mortgage loans through wholesale channels and retail channels, including our branch network, to accommodate the needs of the Asian-centric market. The qualified SFR mortgage loans are 15-year and 30-year conforming mortgages and may be sold directly to FNMA and FHLMC. We originate non-qualified SFR mortgage loans both to sell and hold for investment.
For SFR mortgage loans sold to FNMA, FHLMC and to other third parties such as investment funds or other banks, we generally provide limited representations and warranties and with a repurchase and premium refund for loans that become delinquent in the first 90-days or a premium refund if paid-off in the first 90-days with respect to all loans sold. In certain loan sales to other banks, loans are sold with no representations or warranties and provide a replacement feature for the first six months if any loans pay off early. As a condition of the sale for all loans, the buyer must have the loans audited for underwriting and compliance standards. There were $0 and $2.1 million of SFR loans HFS at September 30, 2026 and December 31, 2025.
The following table presents the LTV ratios at origination for SFR loans by state as of the date indicated:
LTV Distribution
September 30, 2026<45%45%<55%55%<65%65%<75%75%<85%>85%Total
(dollars in thousands)
New York$194,197 $193,615 $282,660 $136,846 $7,352 $— $814,670 
California152,846 161,814 330,475 102,062 9,657 1,139 757,993 
New Jersey9,139 16,067 19,486 8,693 1,517 764 55,666 
Illinois18,304 9,586 15,801 8,719 1,890 643 54,943 
Nevada2,566 4,293 8,924 4,252 627 348 21,010 
Hawaii782 3,213 6,300 4,626 2,368 — 17,289 
Other9,291 10,200 14,402 5,888 — — 39,781 
Total$387,125 $398,788 $678,048 $271,086 $23,411 $2,894 $1,761,352 
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Commercial real estate loans. CRE loans decreased $23.0 million, or 1.8%, to $1.3 billion at September 30, 2026, compared to $1.3 billion at December 31, 2025. The decrease in 2026 was driven by above-average payoff activity more than offsetting new loan production.
CRE loans include owner occupied and non-owner occupied commercial real estate, multi-family residential and SFR loans originated for a business purpose. The interest rates for the majority of the commercial real estate loans are based on the Wall Street Journal Prime rate and have a maturity of five years or less. The multi-family residential loans generally have interest rates based on the 5-year treasury, a 10-year maturity with a five year fixed-rate period followed by a five year floating-rate period, and have a declining prepayment penalty over the first five years. SFR loans originated for a business purpose generally are shorter-term and may have a maturity of one year.
The largest subset of CRE loans was the multi-family residential loan portfolio, which totaled $645.9 million, or 50.5% of CRE loans, as of September 30, 2026 and $745.3 million as of December 31, 2025.
The following table presents the LTV ratios at origination for CRE loans by property type as of the date indicated:
LTV Distribution
September 30, 2026<45%45%<55%55%<65%65%<75%75%<85%>85%Total
Non-Owner Occupied:(dollars in thousands)
Apartments$34,983 $61,731 $139,434 $47,478 $— $10,206 $293,832 
Mobile Home Parks51,249 69,578 117,317 52,368 3,051 — 293,563 
Mixed Use40,981 24,937 136,497 — — 2,947 205,362 
Hotel/Motel25,987 33,404 14,806 — — — 74,197 
Retail11,563 46,532 13,938 — — — 72,033 
Rent Controlled NY Multifamily22,602 10,341 23,925 — — — 56,868 
Warehouse20,096 13,159 12,681 — — — 45,936 
Office23,544 4,387 11,791 4,114 — — 43,836 
SFR Rental7,938 14,848 13,515 2,950 — — 39,251 
Other4,119 1,581 — — — — 5,700 
Total non-owner occupied$243,062 $280,498 $483,904 $106,910 $3,051 $13,153 $1,130,578 
Owner-occupied:
Hotel/Motel6,903 29,876 20,834 — — — 57,613 
Warehouse12,116 16,332 16,078 11,395 — — 55,921 
Retail1,644 4,381 6,715 642 — — 13,382 
Mixed Use1,415 4,401 2,114 — — — 7,930 
Gas Station115 — — 5,587 — — 5,702 
Office605 — 3,413 — — — 4,018 
Rent Controlled NY Multifamily1,360 311 — — — — 1,671 
SFR Rental1,292 118 — — — — 1,410 
Other1,387 — 416 — — — 1,803 
Total owner occupied$26,837 $55,419 $49,570 $17,624 $— $— $149,450 
Total$269,899 $335,917 $533,474 $124,534 $3,051 $13,153 $1,280,028 
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The following table presents the LTV ratios at origination for CRE loans by state as of the date indicated:
LTV Distribution
September 30, 2026<45%45%<55%55%<65%65%<75%75%<85%>85%Total
Non-Owner Occupied:(dollars in thousands)
California$148,627 $188,447 $376,333 $76,925 $— $2,947 $793,279 
New York61,883 47,183 47,893 — — — 156,959 
Nevada5,885 23,318 — — — — 29,203 
Illinois3,596 1,035 1,323 578 — — 6,532 
New Jersey880 1,537 2,669 — — — 5,086 
Other22,191 18,978 55,686 29,407 3,051 10,206 139,519 
Total non-owner occupied$243,062 $280,498 $483,904 $106,910 $3,051 $13,153 $1,130,578 
Owner Occupied:
California15,540 51,355 39,982 16,380 — — 123,257 
New York5,874 3,109 3,585 — — — 12,568 
Nevada3,769 — 767 — — — 4,536 
Illinois457 — — 1,244 — — 1,701 
New Jersey1,197 955 — — — — 2,152 
Other— — 5,236 — — — 5,236 
Total owner occupied$26,837 $55,419 $49,570 $17,624 $— $— $149,450 
Total$269,899 $335,917 $533,474 $124,534 $3,051 $13,153 $1,280,028 
Construction and land development loans. C&D loans totaled $154.6 million, or 4.5% of the loan portfolio, at September 30, 2026. C&D loans decreased $844,000, or 0.5%, during the first nine months of 2026 due to a $19.4 million nonperforming construction loan migrating to OREO in the second quarter of 2026, offset by increases in commercial construction and land development loans. At September 30, 2026, the weighted average LTV ratio of the portfolio was 58%. Our C&D loans are comprised of commercial construction, residential construction, and land acquisition and development. Interest reserves are generally established on real estate construction loans. These loans generally have interest rates based on the Wall Street Journal Prime rate and have maturities of less than 18 months.
The following table shows the categories of our C&D portfolio as of the dates indicated:
As of September 30, 2026As of December 31, 2025Increase (Decrease)
$Mix %$Mix %$%
(dollars in thousands)
Commercial construction$109,300 70.7%$100,035 64.4%$9,265 9.3%
Residential construction39,929 25.8%51,825 33.3%(11,896)(23.0)%
Land development5,391 3.5%3,604 2.3%1,787 49.6%
Total construction and land development loans$154,620 100.0%$155,464 100.0%$(844)(0.5)%
Commercial and industrial loans. C&I loans totaled $151.8 million, or 4.5% of the loan portfolio, as of September 30, 2026. C&I loans increased $11.7 million, or 8.4%, during the first nine months of 2026 due in part to an increase in commercial lines of credit, partially offset by decreases in commercial term loans and mortgage warehouse lines of credit.
The interest rates on C&I loans are generally based on the Wall Street Journal Prime rate. We originate both variable rate and fixed rate C&I loans. The loans are typically made to small- and medium-sized manufacturing, wholesale, retail and service businesses for working capital needs, business expansions and for international trade financing. C&I loans include lines of credit with a maturity of one year or less, term loans with maturities of five years or less, shared national credits with maturities of five years or less, mortgage warehouse lines with a maturity of one year or less, bank subordinated debentures with a maturity of 10 years and international trade discounts with a maturity of three months or less. Substantially all of our C&I loans are collateralized by business assets or real estate.
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SBA loans. SBA loans decreased $7.5 million, or 13.3%, to $48.5 million at September 30, 2026 compared to $56.0 million at December 31, 2025. We originated SBA loans of $7.3 million during the first nine months of 2026. Offsetting these loan originations were loan sales of $13.2 million and net loan payoffs/paydowns of $1.8 million during the first nine months of 2026.
We are designated a Preferred Lender under the SBA Preferred Lender Program. We offer SBA guaranteed loans and mainly originate the SBA 7(a) product, which are variable rate loans, through our loan offices and independent brokers. We generally sell the 75% guaranteed portion of the SBA loans that we originate. Our SBA loans are typically made to small-sized manufacturing, wholesale, retail, hotel/motel and service businesses for working capital needs or business expansions. SBA loans secured by real estate can have any maturity up to 25 years. Typically, non-real estate secured loans mature in less than 10 years. Collateral may also include inventory, accounts receivable, equipment, and includes personal guarantees.
Loan Quality
We use what we believe is a comprehensive methodology to monitor credit quality and prudently manage credit concentration within our loan portfolio. Our underwriting policies and practices govern the risk profile and credit and geographic concentration for our loan portfolio. Our comprehensive methodology to monitor these credit quality standards includes a risk classification system that identifies potential problem loans based on risk characteristics by loan class as well as the early identification of deterioration at the individual loan level.
Analysis of the Allowance for Loan Losses
The following table presents the ALL, its corresponding percentage of the loan class balance, and the percentage of loan balance to total loans HFI as of the dates indicated:
As of September 30, 2026As of December 31, 2025
$ALL as a % of Loan Type% of Total Loans$ALL as a % of Loan Type% of Total Loans
Loans:(dollars in thousands)
Single-family residential mortgages$21,770 1.24%51.8%$21,585 1.30%50.0%
Commercial real estate (1)
17,820 1.39%37.7%18,162 1.39%39.3%
Construction and land development2,033 1.31%4.5%1,502 0.97%4.7%
Commercial and industrial1,619 1.07%4.5%1,647 1.18%4.2%
SBA679 1.40%1.4%824 1.47%1.7%
Other117 4.04%0.1%168 3.82%0.1%
Allowance for loan losses$44,038 1.30%100.0%$43,888 1.32%100.0%
___________________________________
(1)Includes non-farm and non-residential real estate loans, multi-family residential loans and non-owner occupied SFR loans.
Allowance for Credit Losses - Loans
The ACL includes the ALL and the reserve for unfunded commitments ("RUC") and is maintained at a level deemed appropriate by management to provide for expected credit losses in the portfolio as of the date of the consolidated balance sheets. The RUC is included in "Accrued interest and other liabilities" on the consolidated balance sheets. Estimating expected credit losses requires management to use relevant forward looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL for loans is performed by collectively evaluating loans with similar risk characteristics. We have elected to utilize a discounted cash flow approach for all segments except consumer loans and warehouse mortgage loans; for these a remaining life approach was elected.
Our discounted cash flow loss rate methodology incorporates a probability of default, loss given default and exposure at default to derive expected loss within the CECL model, as well as expectations of future economic conditions, using reasonable and supportable forecasts. We use both internal and external data to determine qualitative factors within the CECL model including: lending policies, procedures, and strategies; changes in nature and volume of the portfolio; credit and lending personnel experience; changes in volume and trends in criticized, classified, delinquent, and nonaccrual
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loans; concentration risk; collateral values; regulatory and business environment; loan review results; and economic conditions.
Management estimates the allowance balance required using past loan loss experience from peers with similar asset sizes and geographic locations to the Company. The nature and volume of the portfolio, information about specific borrower situations, changes in credit quality and estimated collateral values, economic conditions, and other factors are also considered. Our CECL methodology utilizes a four-quarter reasonable and supportable forecast period, and a four-quarter reversion period. We use the Federal Open Market Committee forecasts for the national unemployment rate, while reverting to historical loss information.
Individual loans considered to be uncollectible are charged off against the ACL. Factors used in determining the amount and timing of charge-offs on loans include consideration of the loan type, length of delinquency, sufficiency of collateral value, lien priority and the overall financial condition of the borrower. Loans deemed to be collateral-dependent are reviewed individually based on the fair value of the collateral less estimated selling costs. Collateral value is determined using appraisals and/or other market comparable information. Charge-offs are generally taken on loans when the loan balance is determined to be uncollectible. Recoveries on loans previously charged off are added to the ACL. Net charge-offs on an annualized basis represented 0.01% of average loans for the three months ended September 30, 2026 and 0.84% of average loans for the three months ended September 30, 2025.
As of September 30, 2026, the ACL totaled $44.4 million and was comprised of an ALL of $44.0 million and a RUC of $407,000. This compares to the ACL of $44.4 million comprised of an ALL of $43.9 million and a RUC of $484,000 at December 31, 2025. The $73,000 increase in the ACL for the first nine months of 2026 was due to a $300,000 provision for credit losses, offset by net charge-offs of $227,000. The ALL as a percentage of loans HFI was 1.30% at September 30, 2026 and 1.32% at December 31, 2025. The ALL as a percentage of nonperforming loans HFI increased to 234% at September 30, 2026, as compared to 98% at December 31, 2025 resulting from a decrease in nonperforming loans during the first nine months of 2026.
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The following table provides an analysis of the ACL, provision for credit losses and net charge-offs for the periods indicated:
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2026202520262025
Allowance for Loan Loss(dollars in thousands)
Balance, beginning of period$43,660 $51,014 $43,888 $47,729 
Charge-offs:
Single-family residential mortgages— — — (1,403)
Commercial real estate— (21)— (3,296)
Construction and land development— (6,929)— (8,175)
Commercial and industrial(107)(4)(213)(85)
SBA— (11)(2)(12)
Other(30)(54)(68)(113)
Total charge-offs(137)(7,019)(283)(13,084)
Recoveries:
Commercial real estate— — 27 — 
Construction and land development— 138 — 138 
Commercial and industrial1 1 2 79 
SBA1 — 1 — 
Other13 8 26 47 
Total recoveries15 147 56 264 
Net charge-offs(122)(6,872)(227)(12,820)
Provision for credit losses - loans500 750 377 9,983 
Balance, end of period$44,038 $44,892 $44,038 $44,892 
Reserve for unfunded commitments
Balance at beginning of period$407 $629 $484 $729 
Reversal of provision for credit losses - unfunded commitments— (125)(77)(225)
Balance at the end of period$407 $504 $407 $504 
Total allowance for credit losses$44,445 $45,396 $44,445 $45,396 
Total loans HFI at end of period$3,399,214 $3,302,577 $3,399,214 $3,302,577 
Average loans HFI$3,326,368 $3,244,499 $3,312,910 $3,162,665 
Net charge-offs to average loans HFI0.01%0.86%0.01%0.54%
Allowance for loan losses to total loans HFI1.30%1.36%1.30%1.36%
Problem Loans. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well-secured and management believes full collectability of principal and interest is probable.
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In cases where a borrower experiences financial difficulties and we make certain concessionary modifications to contractual terms, the loan is classified as a modified loan to a borrower experiencing financial difficulty. These concessions may include a reduction of the interest rate, principal or accrued interest, extension of the maturity date, payment deferral or other actions intended to minimize potential losses. Loans modified at a rate equal to or greater than that of a new loan with comparable risk at the time the loan is modified may be excluded from modified loan disclosures in years subsequent to the modification if the loans are in compliance with their modified terms.
Real estate acquired by foreclosure or deed in lieu of foreclosure, which we refer to as other real estate owned ("OREO"), is recorded at fair value at the date of foreclosure, establishing a new cost basis (carrying value) by a charge to the allowance for credit losses, if necessary, or a gain recognized through noninterest income, as appropriate. OREO is subsequently carried at the lower of its carrying value or its fair value. Fair value is based on current appraisals less estimated selling costs. Any subsequent write-downs are charged against operating expenses and recognized as an OREO valuation allowance. Any recovery of fair value is recognized as recovery of the OREO valuation allowance up to the cost basis of the property at foreclosure. Operating expenses and related income of OREO are included in other operating income and expenses. Gains on transfer of loans to OREO, and gains or losses on their disposition are included in gain/(loss) on OREO.
Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest (of which there were none during the periods presented). The balances of nonperforming loans included in the table below are the net investment in these assets and do not include specific reserves that are included in the ALL. The following table presents the net investment in nonperforming assets by loan class and certain nonperforming asset ratios as of the dates indicated.
As of September 30,
2026		As of December 31,
2025
Nonperforming loans:(dollars in thousands)
Single-family residential mortgages$896 $2,143 
Commercial real estate3,057 8,158 
Construction and land development7,841 27,994 
Commercial and industrial5,109 5,116 
SBA1,932 1,221 
Total nonperforming loans18,835 44,632 
OREO19,820 8,830 
Nonperforming assets$38,655 $53,462 
Nonperforming loans HFI to total loans HFI0.55%1.35%
Nonperforming assets to total assets0.91%1.27%
Nonperforming loans to tangible common equity and ALL3.72%9.03%
Nonperforming assets to tangible common equity and ALL7.64%10.81%
Nonperforming assets totaled $38.7 million, or 0.91% of total assets, at September 30, 2026, down from $53.5 million, or 1.27% of total assets, at December 31, 2025. The $14.8 million decrease in nonperforming assets consisted of a $25.8 million decrease in nonperforming loans partially offset by an $11.0 million increase in OREO. The $25.8 million decrease in nonperforming loans was due to $19.4 million transferred to OREO, $6.7 million in payoffs/paydowns, and $2.8 million upgraded to performing, partially offset by additions of $3.1 million. The $11.0 million increase in OREO included additions of $19.8 million, partially offset by the sale of the existing OREO properties totaling $8.8 million which resulted in net gains of $669,000.
Delinquent loans 30-89 days past due, excluding nonperforming loans, totaled $7.2 million, or 0.21% of total loans, at September 30, 2026, down from $8.8 million, or 0.27% of total loans, at December 31, 2025. The $1.6 million decrease was mostly due to $14.5 million returning to current status, $1.5 million in paydowns/payoffs, and $1.1 million of loans which migrated to nonperforming status, partially offset by $15.6 million in new delinquent loans.
We did not recognize any interest income on nonaccrual loans during the three and nine months ended September 30, 2026 and 2025, while the loans were in nonaccrual status.
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We utilize an asset risk classification system in compliance with guidelines established by the FDIC as part of our efforts to improve asset quality. In connection with examinations of insured institutions, examiners have the authority to identify problem assets and, if appropriate, classify them. There are three classifications for problem assets: “substandard,” “doubtful,” and “loss.” Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable based on facts, conditions and values that currently exist. An asset classified as loss is not considered collectable and is of such little value that continuance as an asset is not warranted.
We use a risk grading system to categorize and determine the credit risk of our loans. Potential problem loans include loans with a risk grade of 6, or “special mention” loans. Special mention loans have potential weaknesses that deserve management's close attention, and are considered "criticized" loans. Loans with a risk grade of 7 are “substandard” loans and generally considered impaired when they have a 90+ day delinquency. Loans with a risk grade of 8 are “doubtful” loans and generally considered to be impaired. These criticized and classified loans generally require more frequent loan officer contact and receipt of financial data to closely monitor borrower performance. Potential problem loans are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive officers and other members of the Bank’s senior management and the Director's Loan Committee.
The following table presents the risk categories for loans HFI, by segment and class, as of the dates indicated:
September 30, 2026PassSpecial
Mention		SubstandardDoubtfulTotal
Real Estate:(dollars in thousands)
Single-family residential mortgages$1,759,122 $— $2,230 $— $1,761,352 
Commercial real estate1,232,268 18,169 29,591 — 1,280,028 
Construction and land development146,779 — 7,841 — 154,620 
Commercial:
Commercial and industrial140,918 27 10,851 — 151,796 
SBA35,580 6,132 6,813 — 48,525 
Other2,893 — — — 2,893 
Total$3,317,560 $24,328 $57,326 $— $3,399,214 
December 31, 2025PassSpecial
Mention		SubstandardDoubtfulTotal
Real Estate:(dollars in thousands)
Single-family residential mortgages$1,652,759 $— $2,623 $— $1,655,382 
Commercial real estate1,265,041 13,249 24,729 — 1,303,019 
Construction and land development124,083 3,387 27,994 — 155,464 
Commercial:
Commercial and industrial123,747 2,247 14,067 — 140,061 
SBA49,862 354 5,762 — 55,978 
Other4,397 — — — 4,397 
Total$3,219,889 $19,237 $75,175 $— $3,314,301 
Special mention loans totaled $24.3 million, or 0.72% of total loans, at September 30, 2026, up from $19.2 million, or 0.58% of total loans, at December 31, 2025. The $5.1 million increase was primarily due to additions to special mention of $14.3 million, partially offset by payoffs/paydowns of $5.6 million, downgrades to substandard rated loans of $1.8 million, and upgrades to pass rated loans of $1.8 million. As of September 30, 2026, all special mention loans are on accrual status.
Substandard loans totaled $57.3 million at September 30, 2026, a decrease of $17.8 million from $75.2 million at December 31, 2025. This decrease in substandard loans was primarily due to transfers to OREO of $19.4 million, payoffs/paydowns totaling $11.9 million, and upgrades to pass rated loans of $1.8 million, partially offset by additions to
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substandard of $15.3 million. Of the total substandard loans at September 30, 2026, there were $38.5 million, or 67% of such loans, on accrual status.
Liabilities. Total liabilities increased by $32.2 million to $3.7 billion at September 30, 2026 from $3.7 billion at December 31, 2025, primarily due to a $44.9 million increase in deposits and a $50.0 million increase in FHLB advances, offset by a $39.9 million decrease in long-term debt and a $20.7 million decrease in other liabilities.
Deposits. Total deposits were $3.4 billion as of September 30, 2026, an increase of $44.9 million, or 1.8% annualized, compared to $3.4 billion as of December 31, 2025. The increase was due to a $30.3 million increase in noninterest-bearing deposits and a $14.6 million increase in interest-bearing deposits. The increase in interest-bearing deposits included an increase in non-maturity deposits of $281.4 million partially offset by a decrease in time deposits of $266.8 million as a portion of the maturing time deposit accounts shifted into a high-yield savings product. Noninterest-bearing deposits totaled $556.8 million and represented 16.4% of total deposits at September 30, 2026 compared to $526.5 million and 15.7% at December 31, 2025.
The following table presents the composition of our deposit portfolio by account type as of the dates indicated:
September 30, 2026December 31, 2025
$% $%
(dollars in thousands)
Noninterest-bearing demand deposits$556,848 16.4%$526,538 15.7%
Interest-bearing deposits:
NOW93,313 2.8%72,063 2.2%
Money market650,440 19.2%526,933 15.7%
Savings493,904 14.5%357,303 10.7%
Time deposits $250,000 and under734,757 21.6%790,225 23.6%
Time deposits over $250,000804,500 23.7%851,637 25.4%
Wholesale deposits61,518 1.8%225,699 6.7%
Total interest-bearing deposits2,838,432 83.6%2,823,860 84.3%
Total deposits$3,395,280 100.0%$3,350,398 100.0%
The following table presents our average deposit balances and weighted average rates for the three months and nine months ended September 30, 2026:
For the Three Months EndedFor the Nine Months Ended
September 30, 2026September 30, 2026
Average
Balance		Weighted
Average
Rate (%)		Average
Balance		Weighted
Average
Rate (%)
(dollars in thousands)
Noninterest-bearing demand deposits$564,033 — $542,119 — 
Interest-bearing deposits:
NOW91,562 2.38%83,026 2.29%
Money market585,542 3.06%557,087 3.00%
Savings521,545 3.03%517,579 3.01%
Time deposits $250,000 and under796,245 3.49%852,689 3.55%
Time deposits over $250,000826,196 3.73%813,265 3.74%
Total interest-bearing deposits2,821,090 3.35%2,823,646 3.36%
Total deposits$3,385,123 2.79%$3,365,765 2.82%
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The following table presents the maturity schedule of time deposits as of September 30, 2026:
Maturity Within:
Three Months or LessAfter Three to Six MonthsAfter Six to 12 MonthsAfter 12 MonthsTotal
(dollars in thousands)
Time deposits $250,000 and under (1)
$317,137 $267,310 $165,947 $5,115 $755,509 
Time deposits over $250,000 (2)
406,615 284,377 153,023 1,251 845,266 
Total time deposits$723,752 $551,687 $318,970 $6,366 $1,600,775 
___________________________________
(1)Includes wholesale deposits of $20.8 million.
(2)Includes wholesale deposits of $40.8 million.
Of the $845.3 million in time deposits over $250,000, the estimated aggregate amount of time deposits in excess of the FDIC insurance limit is $569.7 million at September 30, 2026. The following table presents the maturity distribution of uninsured time deposits in amounts of more than $250,000 as of the date indicated.
September 30, 2026
(dollars in thousands)
3 months or less$266,755 
Over 3 months through 6 months200,369 
Over 6 months through 12 months102,364 
Over 12 months251 
Total$569,739 
Deposits exceeding the FDIC insurance limits were estimated to be $1.8 billion as of September 30, 2026, and $1.5 billion as of December 31, 2025.
Time deposits include certain wholesale deposits, such as brokered deposits, collateralized deposits from the State of California, and deposits acquired through internet listing services. We mitigate the risk of using wholesale time deposits by managing the aggregate level of such funding, obtaining wholesale deposits through multiple sources, and leveraging collateralized deposits. Wholesale time deposits totaled $61.5 million at September 30, 2026, and were comprised of brokered deposits of $770,000, collateralized deposits from the State of California of $40.0 million, and deposits acquired through internet listing services of $20.7 million at September 30, 2026. This compares to wholesale time deposits of $225.7 million at December 31, 2025, comprised of brokered deposits of $145.5 million, collateralized deposits from the State of California of $40.0 million, and deposits acquired through internet listing services of $40.2 million.
In addition, we offer deposit products through the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweeps (“ICS”) programs where customers are able to achieve FDIC insurance for balances on deposit in excess of the $250,000 FDIC limit. Time deposits held through the CDARS program were $136.0 million at September 30, 2026 and $128.3 million at December 31, 2025 and ICS deposits totaled $148.7 million at September 30, 2026 and $156.3 million at December 31, 2025.
FHLB Borrowings. In addition to deposits, we have used long- and short-term borrowings, such as federal funds purchased and FHLB long-and short-term advances, as a source of funds to meet the daily liquidity needs of our customers and fund growth in earning assets. FHLB advances totaled $180.0 million at September 30, 2026 compared to $130.0 million at December 31, 2025. FHLB borrowings at September 30, 2026 included $160.0 million in putable term advances.
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The details of all the FHLB advances outstanding at September 30, 2026 are presented in Next Call Date order in the table below:
Advance DateAmountRateCall StructureNext Call DateFinal Stated Maturity Date
(dollars in thousands)
5/8/2025$10,000 3.69%N/AN/A5/10/2028
6/23/202510,000 3.64%N/AN/A6/23/2028
8/27/202620,000 4.02%
One time call (1)
11/27/20268/27/2029
6/15/202610,000 3.84%
One time call (2)
12/15/20266/15/2029
6/15/202610,000 3.84%
One time call (2)
12/17/20266/17/2030
6/15/202620,000 3.94%
One time call (3)
6/15/20276/15/2029
6/24/202620,000 3.97%
One time call (3)
6/24/20276/24/2030
6/24/202620,000 4.01%
One time call (3)
6/25/20276/25/2029
7/01/202620,000 3.99%
One time call (3)
7/01/20277/01/2030
8/27/202620,000 3.96%
Quarterly call (3)
8/27/20278/27/2030
7/02/202620,000 4.10%
Quarterly call (4)
7/03/20287/03/2030
Total$180,000 3.94%
(1)Call option by the FHLB after initial three month lock out.
(2)Call option by the FHLB after initial six month lock out.
(3)Call option by the FHLB after initial one year lock out.
(4)Call option by the FHLB after initial two year lock out.
The following table presents information on our total FHLB advances at and for the periods presented:
As of and for the Three Months Ended September 30,As of and for the Nine Months Ended September 30,
FHLB Borrowings:2026202520262025
(dollars in thousands)
Outstanding at period-end$180,000 $130,000 $180,000 $130,000 
Average amount outstanding197,174 185,217 148,242 173,810 
Maximum amount outstanding at any month-end220,000 200,000 220,000 200,000 
Weighted average interest rate:
During period3.96%3.54%3.75%3.13%
End of period3.94%3.49%3.94%3.49%
Long-term Debt. Long-term debt consists of subordinated notes. At September 30, 2026, the Company's long-term debt consisted of $80.0 million of fixed-to-floating rate subordinated notes, with an April 1, 2031 maturity date (the "Notes"). The interest rate was fixed at 4.00% through March 31, 2026, and now resets quarterly to a rate of three-month Secured Overnight Financing Rate ("SOFR") plus 329 basis points starting April 1, 2026. The rate was set at 6.98% as of April 1, 2026, 7.02% as of July 1, 2026, and 7.39% as of October 1, 2026. The Notes may be included in Tier 2 capital with certain limitations applicable under current regulatory guidelines, and such amount is discounted as the Notes approach maturity. The amount of the Notes included in Tier 2 capital was $64.0 million at September 30, 2026, and $120.0 million at December 31, 2025. The Notes became redeemable at par beginning April 1, 2026, and on July 1, 2026, the Company redeemed $40.0 million at par plus accrued interest.

Subordinated Debentures. Subordinated debentures consist of subordinated debentures issued in connection with three separate trust preferred securities and totaled $15.5 million as of September 30, 2026 and $15.4 million as of December 31, 2025. Under the terms of our subordinated debentures, we are not permitted to declare or pay any dividends
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on our capital stock if an event of default occurs under the terms of the long-term debt. In addition, we have the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years. For regulatory reporting purposes, trust preferred securities of $15.5 million are included in Tier 1 capital of the Company at September 30, 2026. These subordinated debentures consist of the following at September 30, 2026 and are described in detail after the table below:
Issue DatePrincipal AmountUnamortized
Valuation Reserve		Recorded ValueStated Rate DescriptionEffective Stated RateStated Maturity
Subordinated debentures:(dollars in thousands)
TFC Trust12/22/2006$5,155 $941 $4,214 
Three-month CME Term SOFR plus 0.26% plus 1.65%
5.81%3/15/2037
FAIC Trust12/15/20047,217 630 6,587 
Three-month CME Term SOFR plus 0.26% plus 2.25%
6.41%12/15/2034
PGBH Trust12/15/20045,155 418 4,737 
Three-month CME Term SOFR plus 0.26% plus 2.10%
6.26%12/15/2034
Total$17,527 $1,989 $15,538 
At September 30, 2026, we were in compliance with all covenants under our long-term debt agreements and subordinated debt.
The Company maintains the TFC Statutory Trust ("TFC Trust"), which has issued securities totaling $5.2 million ($5.0 million in capital securities and $155,000 in common securities). The TFC Trust subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 1.65%, which was 5.81% as of September 30, 2026 and 5.63% at December 31, 2025.
The Company maintains the First American International Statutory Trust I ("FAIC Trust"), which has issued securities totaling $7.2 million ($7.0 million in capital securities and $217,000 in common securities). The FAIC Trust subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 2.25%, which was 6.41% as of September 30, 2026 and 6.23% at December 31, 2025.
The Company maintains the Pacific Global Bank Trust I ("PGBH Trust"), which has issued securities totaling $5.2 million ($5.0 million in capital securities and $155,000 in common securities). The PGBH Trust subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 2.10%, which was 6.26% as of September 30, 2026 and 6.08% at December 31, 2025.
Capital Resources and Liquidity Management
Capital Resources. Shareholders’ equity is influenced primarily by earnings, dividends, sales and redemptions of common stock and preferred stock and changes in accumulated other comprehensive income, net of taxes, from AFS investment securities.
Shareholders’ equity increased $10.8 million, or 2.1%, to $534.2 million as of September 30, 2026 from $523.4 million at December 31, 2025. The increase in shareholders' equity for the first nine months of 2026 was due to net income of $34.1 million and equity compensation activity of $2.1 million, offset by common stock repurchases of $9.0 million, common stock cash dividends paid of $8.3 million and an increase in unrealized losses on AFS securities in accumulated other comprehensive loss, net of tax, of $8.1 million. As a result, book value per share increased to $31.75 from $30.69 at December 31, 2025 and tangible book value per share increased to $27.44 from $26.42 at December 31, 2025. For additional information, see "Non-GAAP Financial Measures."
Liquidity Management. Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, all at a
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reasonable cost. We continuously monitor our liquidity position to ensure that assets and liabilities are managed to meet all short-term and long-term cash requirements, both known and unknown. We manage our liquidity position to meet the daily cash flow needs of customers, while also maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders.
Our liquidity position is supported by management of liquid assets and liabilities and access to alternative sources of funds. Liquid assets include cash, interest-earning deposits in banks, federal funds sold, available for sale securities, term federal funds, purchased receivables and maturing or prepaying balances in our securities and loan portfolios. Liquid liabilities include retail deposits, federal funds purchased, securities sold under repurchase agreements and other borrowings. Other sources of liquidity include the sale of loans, the ability to acquire additional wholesale funding, the issuance of additional collateralized borrowings through FHLB advances or the Federal Reserve’s discount window, and the ability to access the capital markets through the issuance of debt securities, preferred securities or common securities. Our short-term and long-term liquidity requirements are primarily to fund known and unknown on-going operations, including payment of interest on deposits and debt, extensions of credit to borrowers, capital expenditures and shareholder dividends. These liquidity requirements are met primarily through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios, debt financing and increases in customer deposits. We have sufficient capital and do not anticipate any need for additional liquidity sources as of September 30, 2026. For additional information regarding our operating, investing and financing cash flows, see the consolidated statements of cash flows provided in our consolidated financial statements.
Integral to our liquidity management is the administration of short-term borrowings. To the extent we are unable to obtain sufficient liquidity through core deposits, we seek to meet our liquidity needs through wholesale funding or other borrowings on either a short- or long-term basis. The Bank's wholesale funding ratio was 6.9% at September 30, 2026 compared to 10.3% at December 31, 2025, as retail deposit growth allowed us to decrease the balance of wholesale deposits.
The Bank has established secured and unsecured lines of credit. The Bank had a secured line of credit from the Federal Reserve Discount Window of $68.5 million at September 30, 2026 and $66.5 million at December 31, 2025 collateralized by a pool of CRE loans totaling $86.0 million as of September 30, 2026 and $88.9 million as of December 31, 2025. The Bank did not have any borrowings outstanding with the Federal Reserve at September 30, 2026 and December 31, 2025.
The Bank also had a secured line of credit with the FHLB of $1.6 billion at September 30, 2026 and $1.4 billion at December 31, 2025, of which $180.0 million and $130.0 million were outstanding, respectively. Based on the values of loans pledged as collateral, we had $1.4 billion of remaining secured borrowing capacity with the FHLB as of September 30, 2026 and $1.3 billion as of December 31, 2025.
In addition, the Bank had $97.0 million of unsecured federal funds lines with other financial institutions and no amounts advanced against these lines at September 30, 2026 and December 31, 2025.
Bancorp is a corporation separate and apart from the Bank and, therefore, must provide for its own liquidity. Bancorp’s main source of funding is dividends declared and paid to Bancorp by the Bank. There are statutory, regulatory and debt covenant limitations that affect the ability of the Bank to pay dividends to Bancorp. Management believes that these limitations will not impact our ability to meet our ongoing short-term cash obligations. The Bank paid cash dividends to Bancorp of $50.0 million during the nine months ended September 30, 2026, and $45.0 million during the nine months ended September 30, 2025. Bancorp paid dividends on common stock of $8.3 million and $8.5 million during the nine months ended September 30, 2026 and 2025, respectively. At September 30, 2026, Bancorp had $34.5 million in cash, of which $34.2 million was on deposit at the Bank.
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Contractual Obligations
The following table contains supplemental information regarding our total contractual obligations at September 30, 2026:
Payments Due
Within
One Year		One to
Three Years		Over Three to
Five Years		After Five
Years		Total
(dollars in thousands)
Deposits without a stated maturity$1,794,505 $— $— $— $1,794,505 
Time deposits1,594,409 5,536 830 — 1,600,775 
FHLB advances (1)
140,000 40,000 — — 180,000 
Long-term debt— — 80,000 — 80,000 
Subordinated debentures (2)
— — — 15,538 15,538 
Leases5,645 9,083 5,038 4,576 24,342 
Total contractual obligations$3,534,559 $54,619 $85,868 $20,114 $3,695,160 
(1)FHLB advances are presented based upon next call date, however final stated maturities range from 1.6 to 3.9 years as of September 30, 2026.
(2)Represents the principal amount of $17.5 million less the unamortized valuation reserve of $2.0 million.
Off-Balance Sheet Arrangements
Refer to Note 13 in our consolidated financial statements for information related to our off-balance sheet arrangements.
Non-GAAP Financial Measures
Some of the financial measures included herein are not measures of financial performance recognized by GAAP. These non-GAAP financial measures include the “tangible common equity to tangible assets ratio,” “tangible book value per share,” “return on average tangible common equity,” and "pre-tax pre-provision income." Our management uses these non-GAAP financial measures in our analysis of our performance.
Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share. The tangible common equity to tangible assets ratio and tangible book value per share are non-GAAP measures generally used by financial analysts and investment bankers to evaluate capital adequacy. We calculate: (i) tangible common equity as total shareholders’ equity less goodwill and other intangible assets (excluding mortgage servicing assets); (ii) tangible assets as total assets less goodwill and other intangible assets (excluding mortgage servicing assets); and (iii) tangible book value per share as tangible common equity divided by period end shares of common stock outstanding.
Our management, banking regulators, many financial analysts and other investors use these measures in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase method of accounting for mergers and acquisitions. Tangible common equity, tangible assets, tangible book value per share and related measures should not be considered in isolation or as a substitute for total shareholders’ equity, total assets, book value per share or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate tangible common equity, tangible assets, tangible book value per share and any other related measures may differ from that of other companies reporting measures with similar names. The following table reconciles shareholders’ equity (on a GAAP basis) to tangible common equity and total assets (on a GAAP basis) to tangible assets, and calculates our tangible book value per share:
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September 30
2026		December 31
2025		September 30
2025
Tangible Common Equity Ratios:(dollars in thousands)
Tangible common equity:
Total shareholders' equity$534,243 $523,410 $514,335 
Adjustments
Goodwill(71,498)(71,498)(71,498)
Core deposit intangible(951)(1,338)(1,495)
Tangible common equity$461,794 $450,574 $441,342 
Tangible assets:
Total assets$4,251,296 $4,208,294 $4,208,455 
Adjustments
Goodwill(71,498)(71,498)(71,498)
Core deposit intangible(951)(1,338)(1,495)
Tangible assets$4,178,847 $4,135,458 $4,135,462 
Common shares outstanding16,827,16817,057,39717,043,897
Common equity to assets ratio12.57%12.44%12.22%
Tangible common equity to tangible assets ratio11.05%10.90%10.67%
Book value per share$31.75 $30.69 $30.18 
Tangible book value per share$27.44 $26.42 $25.89 
Return on Average Tangible Common Equity. Management measures return on average tangible common equity (“ROATCE”) to assess our capital strength and business performance. Tangible equity excludes goodwill and other intangible assets (excluding mortgage servicing assets), and is reviewed by banking and financial institution regulators when assessing a financial institution’s capital adequacy. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures used by other companies. The following table reconciles ROATCE to its most comparable GAAP measure:
For the Three Months Ended
For the Nine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Return on average tangible common equity:
(dollars in thousands)
Net income available to common shareholders$12,637 $10,140 $10,148 $34,077 $21,771 
Average shareholders' equity536,993 532,409 512,874 532,955 512,945 
Adjustments:
Average goodwill(71,498)(71,498)(71,498)(71,498)(71,498)
Average core deposit intangible(1,035)(1,161)(1,608)(1,160)(1,779)
Adjusted average tangible common equity$464,460 $459,750 $439,768 $460,297 $439,668 
Return on average common equity, annualized9.34%7.64%7.85%8.55%5.67%
Return on average tangible common equity, annualized10.79%8.85%9.16%9.90%6.62%
Pre-Tax Pre-Provision Income. Management believes that pre-tax pre-provision (“PTPP”) income is a useful measure for investors to evaluate core operating performance before taxes and excluding the volatility of credit provision expenses. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP and may not be comparable to similarly titled measures used by other companies. PTPP income is calculated by subtracting noninterest expense from the sum of net interest income and noninterest income, as shown in the following table.
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For the Three Months Ended
For the Nine Months Ended
September 30, 2026June 30, 2026September 30, 2025September 30, 2026September 30, 2025
Pre-Tax Pre-Provision Income:(dollars in thousands)
Net interest income $31,761 $30,086 $29,277 $92,350 $82,774 
Noninterest income 5,105 3,018 3,293 12,374 14,066 
Noninterest expense (19,548)(19,022)(18,683)(57,828)(57,698)
Pre-tax pre-provision income $17,318 $14,082 $13,887 $46,896 $39,142 
ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
Market risk represents the risk of loss due to changes in market values of assets and liabilities. We incur market risk in the normal course of business through exposures to market interest rates, equity prices, and credit spreads. We have identified three primary sources of market risk: interest rate risk, price risk and basis risk.
Interest Rate Risk. Interest rate risk is the risk to earnings and value arising from changes in market interest rates. Interest rate risk arises from timing differences in the repricing and maturities of interest-earning assets and interest-bearing liabilities (repricing risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S. Treasuries and SOFR (basis risk).
Price Risk. Price risk represents the risk of loss arising from adverse movements in the prices of financial instruments that are carried at fair value and subject to fair value accounting. We have price risk primarily from SFR mortgage loans held for sale and fixed-rate available for sale securities.
Basis Risk. Basis risk represents the risk of loss arising from asset and liability pricing movements not changing in the same direction. We have basis risk primarily in the SFR mortgage loan portfolio, the multifamily loan portfolio and our securities portfolio.
Our ALCO establishes broad policy limits with respect to interest rate risk. The ALCO establishes specific operating guidelines within the parameters of the board of directors’ policies. In general, we seek to minimize the impact of changing interest rates on net interest income and the economic values of assets and liabilities. The ALCO monitors the level of interest rate risk sensitivity to ensure compliance with the board of directors’ approved risk limits and to oversee management's balance sheet risk management strategies.
Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment and funding activities. Effective management of interest rate risk begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk posture given business forecasts, management objectives, market expectations, and policy constraints.
An asset sensitive position refers to a balance sheet position in which a short-term increase in interest rates is expected to generate higher net interest income, as rates earned on interest-earning assets would reprice upward more quickly than rates paid on interest-bearing liabilities, thus expanding the net interest margin. Conversely, a liability sensitive position refers to a balance sheet position in which a short-term increase in interest rates is expected to generate lower net interest income, as rates paid on interest-bearing liabilities would reprice upward more quickly than rates earned on interest-earning assets, thus compressing the net interest margin.
Income Simulation and Economic Value Analysis. Interest rate risk measurement is calculated and reported to the board and the ALCO at least quarterly. The information reported includes period-end results and identifies any policy limits exceeded, along with an assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of the risk.
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We use two approaches to model interest rate risk: Net Interest Income at Risk ("NII at Risk"), and Economic Value of Equity (“EVE”). Under NII at Risk, net interest income is modeled utilizing various assumptions for assets, liabilities, and derivatives over a 12 month time horizon assuming a flat balance sheet and an instantaneous and parallel shift in market interest rates in 100 basis point increments. We report NII at Risk to isolate the change in income related solely to interest-earning assets and interest-bearing liabilities. The model results do not take into consideration any steps management might take to respond to the changes in interest rates or changes in competitor or customer behavior. EVE measures the period end market value of assets minus the market value of liabilities and the change in this value as rates change. EVE is a period end measurement.
Net Interest Income at Risk
Immediate Change in Rates
-300-200-100+100+200+300
September 30, 2026(dollars in thousands)
Dollar change$6,578 $1,980 $1,061 $(1,821)$(3,899)$(6,563)
Percent change5.07%1.53%0.82%(1.40%)(3.00%)(5.06%)
December 31, 2025
Dollar change$11,201 $5,268 $3,325 $(2,860)$(5,527)$(8,440)
Percent change9.38%4.41%2.78%(2.39%)(4.63%)(7.07%)
At September 30, 2026, our NII at Risk profile is liability sensitive. This is directionally consistent, but a less liability sensitive profile, as compared with December 31, 2025. Actual results could vary materially from those calculated by our model, due to a variety of factors or assumptions such as the uncertainty of the magnitude, timing and direction of future interest rate movement or the shape of the yield curve. The NII at Risk results are within board policy limits.
Economic Value of Equity
Immediate Change in Rates
-300-200-100+100+200+300
September 30, 2026(dollars in thousands)
Dollar change$(39,405)$17,940 $14,119 $(17,687)$(38,825)$(67,619)
Percent change(4.99%)2.27%1.79%(2.24%)(4.92%)(8.57%)
December 31, 2025
Dollar change$(48,495)$7,557 $8,430 $(18,774)$(39,714)$(64,688)
Percent change(7.41%)1.16%1.29%(2.87%)(6.07%)(9.89%)
At September 30, 2026, the EVE position is projected to decrease in the up rate scenarios and down 300 rate scenario. When interest rates rise, fixed rate assets generally lose economic value as these instruments are discounted at a higher rate demonstrating the relative longer asset duration as compared to the overall liability duration. When interest rates decrease, the value of noninterest-bearing deposits also decreases. In addition, as the down rate shocks become more severe, the pace of the increase in the value of loans also slows due to an increase in loan prepayments and the impact of discount rates reaching their floors; this results in a change of EVE volatility from positive to negative between the down 200 and 300 scenarios. Actual results could vary materially from those calculated by our model, due to a variety of factors or assumptions such as the uncertainty of the magnitude, timing and direction of future interest rate movement or the shape of the yield curve. The EVE results are within board policy limits.
ITEM 4.          CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
The Company’s management, including our principal executive officer and principal financial officer, has evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, 2026, our disclosure controls and procedures were effective.
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Changes in Internal Controls Over Financial Reporting.
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1.          LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business. Management believes that none of the legal proceedings occurring in the ordinary course of business, individually or in the aggregate, will have a material adverse impact on the results of operations or financial condition of the Company.
ITEM 1A.          RISK FACTORS
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. "Risk Factors" of our 2025 Annual Report. The materiality of any risks and uncertainties identified in our Forward Looking Statements contained in this Report or those that are presently unforeseen could result in significant adverse effects on our financial condition, results of operations and cash flows. See Part I, Item 2 for “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report.
ITEM 2.          UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On June 15, 2026, the Company announced the Board of Directors authorized a stock repurchase plan for up to 1 million shares of the Company's outstanding common stock through June 30, 2028.
During the third quarter of 2026, the Company repurchased an aggregate total of 168,768 shares of common stock, at an average price of $26.37 per share, pursuant to the Company's stock repurchase plan.
Issuer Purchases of Equity Securities
(a)(b)(c)(d)
PeriodTotal Number of Shares
Purchased		Average Price Paid per ShareTotal Number of Shares
Purchased as Part of Publicly
Announced Plan		Approximate Number of
Shares That May Yet Be
Purchased Under the Plan
July 1, 2026 to July 31, 202673,481$26.37 73,481909,443 
August 1, 2026 to August 31, 202624,875$26.50 24,875884,568 
September 1, 2026 to September 30, 202670,412$26.34 70,412814,156 
Total168,768$26.37 168,768
ITEM 3.          DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.          MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.          OTHER INFORMATION
During the quarter ended September 30, 2026, no officer or director of the Company adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities of our common stock that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement as defined in 17 CFR§ 229.408(c).
On November 5, 2026, the Company entered into an Employment Transition and Separation Agreement (the "Separation Agreement") with Gary Fan, the Bank's former Executive Vice President and Chief Operations Officer. In accordance with the terms of his employment agreement and as reflected in the Separation Agreement, Mr. Fan will receive a severance payment in the amount of $180,500, which is equal to six (6) months of his current annual base salary. In addition, the Company will pay Mr. Fan a lump sum amount equal to $200,000 in recognition of his contributions and leadership during his tenure with the Bank. The Company anticipates making each payment during January 2027, subject to Mr. Fan's execution of a general release of claims in favor of the Company and other related parties. The Separation Agreement, including the form of general release of claims, is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q.
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Table of Contents
ITEM 6.          EXHIBITS
Exhibit NoDescription of Exhibits
3.1
3.2
3.3
4.1
The other instruments defining the rights of holders of the long-term debt securities of the Company and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Company hereby agrees to furnish copies of these instruments to the SEC upon request.
10.1
31.1
31.2
32.1
32.2
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104The cover page of RBB Bancorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL (contained in Exhibit 101)
*Management contract or compensatory plan or agreement.
(1)Incorporated by reference from Exhibit 3.1 of the Registrant’s Registration Statement in Form S-1 filed with the SEC on June 28, 2017.
(2)Incorporated by reference from Exhibit 3.2 of the Registrant’s Registration Statement in Form S-1 filed with the SEC on June 28, 2017.
(3)Incorporated by reference from Exhibit 4.1 of the Registrant’s Registration Statement in Form S-1 filed with the SEC on June 28, 2017.
(4)Incorporated by reference from Exhibit 3.3 of the Registrant’s Quarterly Report in Form 10-Q filed with the SEC on November 13, 2018.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
RBB BANCORP
(Registrant)
Date: November 6, 2026
/s/ Johnny Lee
Johnny Lee
President and Chief Executive Officer
Date: November 6, 2026
/s/ Lynn Hopkins
Lynn Hopkins
Executive Vice President, Chief Financial Officer
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