As of June 30, 2025, 81.64% of the Company’s total loan portfolio consisted of real estate loans, with commercial real
estate loans representing 78.0% of total loans. The Company’s real estate loans and construction loans are secured by real
properties primarily located in California. As of June 30, 2025, $417.2 million, or 6.40% of the total commercial real estate
loans included loans secured by farmland, compared to $449.8 million, or 6.91%, at December 31, 2024. The loans secured
by farmland included $104.6 million for loans secured by dairy & livestock land and $312.6 million for loans secured by
agricultural land at June 30, 2025, compared to $109.1 million for loans secured by dairy & livestock land and $340.7 million
for loans secured by agricultural land at December 31, 2024. As of June 30, 2025, dairy & livestock and agribusiness loans of
$233.8 million were comprised of $199.4 million of dairy & livestock loans and $34.4 million of agribusiness loans,
compared to $419.9 million comprised of $385.3 million of dairy & livestock loans and $34.6 million of agribusiness loans
December 31, 2024.

At June 30, 2025 and December 31, 2024, loans with carrying value of $6.31 billion were pledged to secure the borrowings and available lines of credit from the FHLB and the Federal Reserve Bank totaling $4.48 billion and $4.44 billion, respectively.

There were no outstanding loans held-for-sale as of June 30, 2025 and December 31, 2024.

We monitor credit quality by evaluating various risk attributes and utilize such information in our evaluation of the appropriateness of the allowance for credit losses. Internal credit risk ratings, within our loan risk rating system, are the credit quality indicators that we most closely monitor.

An important element of our approach to credit risk management is our loan risk rating system. The originating officer assigns each loan an initial risk rating, which is reviewed and confirmed or changed, as appropriate, by credit management. Approvals are made based upon the amount of inherent credit risk specific to the transaction and are reviewed for appropriateness by senior line and credit management personnel. Credits are monitored by line and credit management personnel for deterioration or improvement in a borrower’s financial condition, which would impact the ability of the borrower to perform under the contract. Risk ratings are adjusted as necessary.

Loans are risk rated into the following categories: Pass, Special Mention, Substandard, Doubtful and Loss. Each of these groups is assessed for the proper amount to be used in determining the adequacy of our allowance for losses. These categories can be described as follows:

Pass — These loans, including loans on the Bank’s internal watch list, range from minimal credit risk to lower than average, but still acceptable, credit risk. Watch list loans usually require more than normal management attention. Loans on the watch list may involve borrowers with adverse financial trends, higher debt/equity ratios, or weaker liquidity positions, but not to the degree of being considered a defined weakness or problem loan where risk of loss may be apparent.

Special Mention — Loans assigned to this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard — Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected.

Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or the liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loss — Loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset with insignificant value even though partial recovery may be affected in the future.

The following table summarizes loans by type and origination year, according to our internal risk ratings as of the dates presented.


	Origination Year												Revolving loans amortized		Revolving loans converted to
June 30, 2025	2025		2024		2023		2022		2021		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Commercial real estate loans:
Risk Rating:
Pass	$	284,142	$	305,013	$	391,978	$	1,181,124	$	1,021,260	$	2,812,471	$	208,186	$	35,810	$	6,239,984
Special Mention		—		9,597		10,167		38,965		23,766		131,928		5,068		6,769		226,260
Substandard		1,217		1,174		677		5,533		3,510		39,060		—		—		51,171
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial real estate loans:	$	285,359	$	315,784	$	402,822	$	1,225,622	$	1,048,536	$	2,983,459	$	213,254	$	42,579	$	6,517,415
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Construction loans:
Risk Rating:
Pass	$	456	$	7,722	$	322	$	9,158	$	—	$	—	$	—	$	—	$	17,658
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Construction loans:	$	456	$	7,722	$	322	$	9,158	$	—	$	—	$	—	$	—	$	17,658
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SBA loans:
Risk Rating:
Pass	$	17,212	$	26,270	$	15,455	$	45,606	$	45,957	$	106,918	$	—	$	—	$	257,418
Special Mention		—		—		—		—		—		6,241		—		—		6,241
Substandard		—		3,365		—		1,559		—		3,152		—		—		8,076
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA loans:	$	17,212	$	29,635	$	15,455	$	47,165	$	45,957	$	116,311	$	—	$	—	$	271,735
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	51	$	—	$	—	$	51

SBA - PPP loans:
Risk Rating:
Pass	$	—	$	—	$	—	$	—	$	78	$	7	$	—	$	—	$	85
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA - PPP loans:	$	—	$	—	$	—	$	—	$	78	$	7	$	—	$	—	$	85
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial loans:
Risk Rating:
Pass	$	75,086	$	90,849	$	104,887	$	96,293	$	56,974	$	167,382	$	278,848	$	10,128	$	880,447
Special Mention		99		149		1,799		1,609		1,328		3,527		11,197		4,989		24,697
Substandard		—		—		1,543		389		219		294		1,100		3,738		7,283
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial and industrial loans:	$	75,185	$	90,998	$	108,229	$	98,291	$	58,521	$	171,203	$	291,145	$	18,855	$	912,427
Current YTD Period: Gross charge-offs	$	—	$	—	$	392	$	—	$	—	$	—	$	—	$	21	$	413


	Origination Year													Revolving loans amortized		Revolving loans converted to
June 30, 2025	2025		2024		2023		2022		2021		Prior			cost basis		term loans		Total
	(Dollars in thousands)
Dairy & livestock and agribusiness loans:
Risk Rating:
Pass	$	—	$	644	$	—	$	—	$	552	$	871		$	199,473	$	117	$	201,657
Special Mention		395		—		—		—		395		(395	)		24,154		1,292		25,841
Substandard		—		—		—		—		—		60			6,214		—		6,274
Doubtful & Loss		—		—		—		—		—		—			—		—		—
Total Dairy & livestock and agribusiness loans:	$	395	$	644	$	—	$	—	$	947	$	536		$	229,841	$	1,409	$	233,772
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	—

Municipal lease finance receivables loans:
Risk Rating:
Pass	$	56	$	2,788	$	—	$	4,843	$	24,586	$	31,325		$	—	$	—	$	63,598
Special Mention		—		—		—		—		—		54			—		—		54
Substandard		—		—		—		—		—		—			—		—		—
Doubtful & Loss		—		—		—		—		—		—			—		—		—
Total Municipal lease finance receivables loans:	$	56	$	2,788	$	—	$	4,843	$	24,586	$	31,379		$	—	$	—	$	63,652
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	—

SFR mortgage loans:
Risk Rating:
Pass	$	29,363	$	18,220	$	19,901	$	58,504	$	40,186	$	121,279		$	—	$	—	$	287,453
Special Mention		—		—		—		—		—		390			—		271		661
Substandard		—		—		—		—		—		321			—		—		321
Doubtful & Loss		—		—		—		—		—		—			—		—		—
Total SFR mortgage loans:	$	29,363	$	18,220	$	19,901	$	58,504	$	40,186	$	121,990		$	—	$	271	$	288,435
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	—

Consumer and other loans:
Risk Rating:
Pass	$	1,445	$	4,700	$	2,452	$	668	$	943	$	520		$	39,607	$	2,610	$	52,945
Special Mention		—		—		—		—		75		—			5		—		80
Substandard		—		—		—		—		—		—			—		297		297
Doubtful & Loss		—		—		—		—		—		—			—		—		—
Total Consumer and other loans:	$	1,445	$	4,700	$	2,452	$	668	$	1,018	$	520		$	39,612	$	2,907	$	53,322
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	5	$	—	$	5

Total Loans, at amortized cost:
Risk Rating:
Pass	$	407,760	$	456,206	$	534,995	$	1,396,196	$	1,190,536	$	3,240,773		$	726,114	$	48,665	$	8,001,245
Special Mention		494		9,746		11,966		40,574		25,564		141,745			40,424		13,321		283,834
Substandard		1,217		4,539		2,220		7,481		3,729		42,887			7,314		4,035		73,422
Doubtful & Loss		—		—		—		—		—		—			—		—		—
Total Loans at amortized cost:	$	409,471	$	470,491	$	549,181	$	1,444,251	$	1,219,829	$	3,425,405		$	773,852	$	66,021	$	8,358,501
Current YTD Period: Total gross charge-offs	$	—	$	—	$	392	$	—	$	—	$	51		$	5	$	21	$	469


	Origination Year												Revolving loans amortized		Revolving loans converted to
December 31, 2024	2024		2023		2022		2021		2020		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Commercial real estate loans:
Risk Rating:
Pass	$	307,984	$	419,547	$	1,216,126	$	1,066,694	$	828,493	$	2,170,119	$	197,991	$	37,704	$	6,244,658
Special Mention		1,075		4,910		36,505		21,478		17,056		104,201		3,937		1,287		190,449
Substandard		1,176		244		6,775		9,057		15,138		34,259		5,696		—		72,345
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial real estate loans:	$	310,235	$	424,701	$	1,259,406	$	1,097,229	$	860,687	$	2,308,579	$	207,624	$	38,991	$	6,507,452
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	2,258	$	—	$	—	$	2,258

Construction loans:
Risk Rating:
Pass	$	7,717	$	315	$	8,050	$	—	$	—	$	—	$	—	$	—	$	16,082
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Construction loans:	$	7,717	$	315	$	8,050	$	—	$	—	$	—	$	—	$	—	$	16,082
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SBA loans:
Risk Rating:
Pass	$	33,531	$	16,064	$	46,393	$	47,810	$	23,733	$	92,012	$	—	$	—	$	259,543
Special Mention		—		—		—		1,337		4,716		1,830		—		—		7,883
Substandard		—		—		1,581		—		—		4,006		—		—		5,587
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA loans:	$	33,531	$	16,064	$	47,974	$	49,147	$	28,449	$	97,848	$	—	$	—	$	273,013
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	165	$	—	$	—	$	165

SBA - PPP loans:
Risk Rating:
Pass	$	—	$	—	$	—	$	254	$	520	$	—	$	—	$	—	$	774
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA - PPP loans:	$	—	$	—	$	—	$	254	$	520	$	—	$	—	$	—	$	774
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial loans:
Risk Rating:
Pass	$	100,465	$	100,242	$	111,982	$	67,706	$	69,084	$	118,069	$	318,147	$	6,213	$	891,908
Special Mention		819		2,213		1,026		2,169		421		4,175		8,136		4,830		23,789
Substandard		—		3,029		523		11		—		—		1,997		3,921		9,481
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial and industrial loans:	$	101,284	$	105,484	$	113,531	$	69,886	$	69,505	$	122,244	$	328,280	$	14,964	$	925,178
Current YTD Period: Gross charge-offs	$	—	$	—	$	300	$	—	$	—	$	1,186	$	—	$	495	$	1,981


	Origination Year												Revolving loans amortized		Revolving loans converted to
December 31, 2024	2024		2023		2022		2021		2020		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Dairy & livestock and agribusiness loans:
Risk Rating:
Pass	$	812	$	—	$	—	$	596	$	786	$	141	$	327,850	$	13	$	330,198
Special Mention		2,901		—		—		—		—		—		84,295		1,650		88,846
Substandard		—		—		—		—		—		60		—		800		860
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Dairy & livestock and agribusiness loans:	$	3,713	$	—	$	—	$	596	$	786	$	201	$	412,145	$	2,463	$	419,904
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Municipal lease finance receivables loans:
Risk Rating:
Pass	$	2,540	$	—	$	5,111	$	24,715	$	5,140	$	28,510	$	—	$	—	$	66,016
Special Mention		—		—		—		—		—		98		—		—		98
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Municipal lease finance receivables loans:	$	2,540	$	—	$	5,111	$	24,715	$	5,140	$	28,608	$	—	$	—	$	66,114
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SFR mortgage loans:
Risk Rating:
Pass	$	20,261	$	21,055	$	59,763	$	41,156	$	38,730	$	85,637	$	—	$	—	$	266,602
Special Mention		—		—		—		—		896		411		—		284		1,591
Substandard		—		—		—		—		—		979		—		—		979
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SFR mortgage loans:	$	20,261	$	21,055	$	59,763	$	41,156	$	39,626	$	87,027	$	—	$	284	$	269,172
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer and other loans:
Risk Rating:
Pass	$	7,242	$	3,043	$	1,521	$	1,850	$	142	$	624	$	42,035	$	1,855	$	58,312
Special Mention		—		—		—		130		—		—		4		—		134
Substandard		—		—		—		—		—		—		—		297		297
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Consumer and other loans:	$	7,242	$	3,043	$	1,521	$	1,980	$	142	$	624	$	42,039	$	2,152	$	58,743
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	1	$	3	$	4

Total Loans, at amortized cost:
Risk Rating:
Pass	$	480,552	$	560,266	$	1,448,946	$	1,250,781	$	966,628	$	2,495,112	$	886,023	$	45,785	$	8,134,093
Special Mention		4,795		7,123		37,531		25,114		23,089		110,715		96,372		8,051		312,790
Substandard		1,176		3,273		8,879		9,068		15,138		39,304		7,693		5,018		89,549
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Loans at amortized cost:	$	486,523	$	570,662	$	1,495,356	$	1,284,963	$	1,004,855	$	2,645,131	$	990,088	$	58,854	$	8,536,432
Current YTD Period: Gross charge-offs	$	—	$	—	$	300	$	—	$	—	$	3,609	$	1	$	498	$	4,408

The Company's allowance models calculate reserves over the average life of the loan, which includes the remaining time to maturity, adjusted for estimated prepayments applied as an adjustment to our commercial real estate and commercial and industrial loans. Our allowance for credit losses is based upon lifetime loss rate models developed from an estimation framework that uses historical lifetime loss experiences to derive loss rates at a collective pool level. We measure the expected credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. We have three collective loan pools: Commercial Real Estate, Commercial and Industrial, and Consumer. A substantial portion of the ACL relates to loans within the Commercial Real Estate and Commercial and Industrial methodologies, each evaluated on a collective basis. Our ACL amounts are largely driven by portfolio characteristics, including loss history, internal risk grading, various risk attributes, and the economic outlook for certain macroeconomic variables. Risk attributes for commercial real estate loans include Original Loan to Value ratios ("OLTV"), origination year, loan seasoning, and macroeconomic variables that include Real GDP growth, commercial real estate price index and unemployment rate. Risk attributes for commercial and industrial loans include internal risk ratings, borrower industry sector, loan credit spreads and macroeconomic variables that include unemployment rate and BBB spread. The macroeconomic variables for Consumer include unemployment rate and GDP. The Commercial Real Estate methodology is applied over commercial real estate loans, a portion of construction loans, and a portion of SBA loans. The Commercial and Industrial methodology is applied over a substantial portion of the Company’s commercial and industrial loans, all dairy & livestock and agribusiness loans, municipal lease receivables, as well as the remaining portion of SBA loans (excluding Paycheck Protection Program loans). The Consumer methodology is applied to SFR mortgage loans, consumer loans, as well as the remaining construction loans. In addition to determining the quantitative life of loan loss rate to be applied against the amortized cost basis of the portfolio segments, management reviews current conditions and forecasts to determine whether adjustments are needed to ensure that the life of loan loss rates reflect both the current state of the portfolio, and expectations for macroeconomic changes. The Company’s ACL estimate incorporates a reasonable and supportable forecast of various macroeconomic variables over the remaining average life of our loans. This forecast incorporates an assumption that each macroeconomic variable will revert to a long-term expectation, starting in years two through three, of the reasonable and supportable forecast period, with the reversion largely completed within the first five years of the forecast. The economic forecast is based on probability weighted scenarios to address macroeconomic uncertainty. Our methodology for assessing the appropriateness of the allowance is reviewed on a regular basis and considers overall risks in the Bank’s loan portfolio. Refer to Note 3 – Summary of significant Accounting Policies included in our Annual Report on Form 10-K for the year ended December 31, 2024 for a more detailed discussion concerning the allowance for credit losses.

The ACL totaled $78.0 million at June 30, 2025, compared to $80.1 million at December 31, 2024. The $2.1 million decrease in the ACL from December 31, 2024 to June 30, 2025 was comprised of $0.1 million in net charge-offs and $2 million recapture of provision for credit losses in the first quarter. At June 30, 2025, the ACL as a percentage of total loans and leases, at amortized cost, was 0.93%. This compares to 0.94% at December 31, 2024. Our economic forecast continues to be a blend of multiple forecasts produced by Moody’s. These U.S. economic forecasts include a baseline forecast, as well as downside forecasts. The baseline forecast continues to represent the largest weighting in our multi-weighted forecast scenario, with downside risks weighted among multiple forecasts. As of June 30, 2025, the resulting weighted forecast resulted in Real GDP declining in the second half of 2025. GDP growth is forecasted to be below 1% until the second half of 2026 and will reach over 2% by end of 2027. The unemployment rate is forecasted to reach 5% by the beginning of 2026 and stay elevated through 2028.

Management believes that the ACL was appropriate at June 30, 2025 and December 31, 2024. Due to inflationary pressures, high interest rates, lower commercial real estate values, international tariffs, and geopolitical events, no assurance can be given that economic conditions that adversely affect the Company’s service areas or other circumstances will not be reflected in increased provisions for credit losses in the future.

The following tables present the balance and activity related to the allowance for credit losses for held-for-investment loans by type for the periods presented.


	Three Months Ended June 30, 2025
	Ending Balance March 31, 2025		Charge-offs			Recoveries		(Recapture of) Provision for Credit Losses			Ending Balance June 30, 2025
	(Dollars in thousands)
Commercial real estate	$	65,302	$	—		$	—	$	(760	)	$	64,542
Construction		238		—			6		(4	)		240
SBA		2,608		(32	)		19		471			3,066
Commercial and industrial		6,118		(392	)		155		476			6,357
Dairy & livestock and agribusiness		2,824		—			—		(270	)		2,554
Municipal lease finance receivables		210		—			—		10			220
SFR mortgage		427		—			—		50			477
Consumer and other loans		525		(5	)		—		27			547
Total allowance for credit losses	$	78,252	$	(429	)	$	180	$	—		$	78,003


	Three Months Ended June 30, 2024
	Ending Balance March 31, 2024		Charge-offs			Recoveries		Provision for (Recapture of) Credit Losses			Ending Balance June 30, 2024
	(Dollars in thousands)
Commercial real estate	$	69,445	$	—		$	—	$	(40	)	$	69,405
Construction		1,296		—			2		(510	)		788
SBA		2,531		(49	)		18		(4	)		2,496
Commercial and industrial		5,059		—			—		44			5,103
Dairy & livestock and agribusiness		3,252		—			—		523			3,775
Municipal lease finance receivables		194		—			—		(8	)		186
SFR mortgage		483		—			—		15			498
Consumer and other loans		557		(2	)		—		(20	)		535
Total allowance for credit losses	$	82,817	$	(51	)	$	20	$	—		$	82,786


	Six Months Ended June 30, 2025
	Ending Balance December 31, 2024		Charge-offs			Recoveries		(Recapture of) Provision for Credit Losses			Ending Balance June 30, 2025
	(Dollars in thousands)
Commercial real estate	$	66,237	$	—		$	—	$	(1,695	)	$	64,542
Construction		312		—			12		(84	)		240
SBA		2,629		(51	)		41		447			3,066
Commercial and industrial		6,093		(413	)		297		380			6,357
Dairy & livestock and agribusiness		3,610		—			—		(1,056	)		2,554
Municipal lease finance receivables		205		—			—		15			220
SFR mortgage		424		—			—		53			477
Consumer and other loans		612		(5	)		—		(60	)		547
Total allowance for credit losses	$	80,122	$	(469	)	$	350	$	(2,000	)	$	78,003


	Six Months Ended June 30, 2024
	Ending Balance December 31, 2023		Charge-offs			Recoveries		Provision for (Recapture of) Credit Losses			Ending Balance June 30, 2024
	(Dollars in thousands)
Commercial real estate	$	69,466	$	(2,258	)	$	—	$	2,197		$	69,405
Construction		1,277		—			5		(494	)		788
SBA		2,679		(139	)		81		(125	)		2,496
Commercial and industrial		9,116		(1,917	)		176		(2,272	)		5,103
Dairy & livestock and agribusiness		3,098		—			—		677			3,775
Municipal lease finance receivables		210		—			—		(24	)		186
SFR mortgage		535		—			—		(37	)		498
Consumer and other loans		461		(4	)		—		78			535
Total allowance for credit losses	$	86,842	$	(4,318	)	$	262	$	—		$	82,786

We seek to manage asset quality and control credit risk through diversification of the loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Management Division is responsible for monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of nonperforming, past due loans and larger credits, designed to identify potential charges to the allowance for credit losses, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers and any guarantors, the value of the applicable collateral, loan loss experience, estimated credit losses, growth in the loan portfolio, prevailing economic conditions and other factors. Refer to Note 3 – Summary of Significant Accounting Policies, included in our Annual Report on Form 10-K for the year ended December 31, 2024, for additional discussion concerning the Bank’s policy for past due and nonperforming loans.

The following table presents the recorded investment in, and the aging of, past due loans (including nonaccrual loans), by type of loans as of the dates presented.


	June 30, 2025
	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial real estate
Owner occupied	$	—	$	—	$	—	$	—	$	2,289,898	$	2,289,898
Non-owner occupied		—		—		23,707		23,707		4,203,810		4,227,517
Construction
Speculative (1)		—		—		—		—		9,261		9,261
Non-speculative		—		—		—		—		8,397		8,397
SBA		3,419		—		651		4,070		267,665		271,735
SBA - PPP		—		—		—		—		85		85
Commercial and industrial		—		—		105		105		912,322		912,427
Dairy & livestock and agribusiness		—		—		60		60		233,712		233,772
Municipal lease finance receivables		—		—		—		—		63,652		63,652
SFR mortgage		—		—		—		—		288,435		288,435
Consumer and other loans		—		—		—		—		53,322		53,322
Total loans at amortized cost	$	3,419	$	—	$	24,523	$	27,942	$	8,330,559	$	8,358,501

(1)

Speculative construction loans are generally for properties where there is no identified buyer or renter.


	December 31, 2024
	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial real estate
Owner occupied	$	—	$	—	$	196	$	196	$	2,329,380	$	2,329,576
Non-owner occupied		—		—		24,430		24,430		4,153,446		4,177,876
Construction
Speculative (1)		—		—		—		—		8,091		8,091
Non-speculative		—		—		—		—		7,991		7,991
SBA		—		190		1,427		1,617		271,396		273,013
SBA - PPP		—		—		—		—		774		774
Commercial and industrial		399		—		140		539		924,639		925,178
Dairy & livestock and agribusiness		—		—		60		60		419,844		419,904
Municipal lease finance receivables		—		—		—		—		66,114		66,114
SFR mortgage		—		—		—		—		269,172		269,172
Consumer and other loans		—		—		—		—		58,743		58,743
Total loans at amortized cost	$	399	$	190	$	26,253	$	26,842	$	8,509,590	$	8,536,432

(1)

Speculative construction loans are generally for properties where there is no identified buyer or renter.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table presents the recorded investment in collateral-dependent loans by type of loans as of the date presented.

The allowance for off-balance sheet credit exposure relates to commitments to extend credit, letters of credit and undisbursed funds on lines of credit. The Company evaluates credit risk associated with the off-balance sheet loan commitments in the same manner as it evaluates credit risk associated with the loan and lease portfolio. The Bank's ACL methodology produced an allowance of $6.8 million for the off-balance sheet credit exposures as of June 30, 2025. There was a $500,000 provision for unfunded loan commitments for the six months ended June 30, 2025, compared to a $500,000 recapture of provision for the six months ended June 30, 2024. As of June 30, 2025 and December 31, 2024, the balance in this reserve was $6.8 million and $6.3 million, respectively, and was included in other liabilities.

There were four loans to borrowers experiencing financial difficulty that were modified during the six months ended June 30, 2025 with an amortized cost totaling $6.1 million as of June 30, 2025, including three commercial real estate loans totaling $5.7 million and one dairy & livestock and agribusiness loans of $0.4 million.

As of June 30, 2025, the Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the first six months of 2025 that subsequently defaulted. Payment default is defined as movement to nonaccrual (nonperforming) status, foreclosure or charge-off, whichever occurs first.