v3.25.4
Loans and Allowance for Credit Losses on Loans
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
The majority of the disclosures in this footnote are prepared at the class level, which is equivalent to the call report or call code classification. The roll forward of the allowance for credit losses is presented at the portfolio segment level. Accrued interest receivable on loans of $11,625,000 and $10,745,000 at December 31, 2025 and December 31, 2024 respectively is not included in the loan tables below and is included in other assets on the Company’s balance sheets. Outstanding loans are summarized by class as follows:
Loan Type (Dollars in thousands)December 31, 2025December 31, 2024
Commercial:  
Commercial and industrial$156,744 $143,422 
Agricultural production34,152 37,323 
Total commercial190,896 180,745 
Real estate:  
Construction & other land loans80,452 67,869 
Commercial real estate - owner occupied368,604 323,188 
Commercial real estate - non-owner occupied992,486 913,165 
Farmland142,100 139,815 
Multi-family residential199,123 133,595 
1-4 family - close-ended111,741 123,445 
1-4 family - revolving39,818 35,421 
Total real estate1,934,324 1,736,498 
Consumer:
Manufactured housing322,761 322,263 
Other installment92,589 92,839 
Total consumer415,350 415,102 
Total loans, net of discount2,540,570 2,332,345 
Net deferred origination costs287 1,876 
Loans, net of deferred origination costs2,540,857 2,334,221 
Allowance for credit losses(30,071)(25,803)
Total loans, net$2,510,786 $2,308,418 

At December 31, 2025 and December 31, 2024, loans originated under Small Business Administration (SBA) programs totaling $21,161,000 and $21,618,000, respectively, were included in the real estate and commercial categories, of which, $16,044,000 or 76% and $16,519,000 or 76%, respectively, are secured by government guarantees.

Allowance for Credit Losses on Loans

The measurement of the allowance for credit losses on collectively evaluated loans is based on modeled expectations of lifetime expected credit losses utilizing national and local peer group historical losses, weighting of economic scenarios, and other relevant factors. The Company incorporates forward-looking information using macroeconomic scenarios, which include variables that are considered key drivers of credit losses within the portfolio. The Company uses a probability-weighted, multiple scenario forecast approach. These scenarios may consist of a base forecast representing the most likely outcome, combined with downside or upside scenarios reflecting possible worsening or improving economic conditions.

When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for credit losses on an individual loan basis.
The following table shows the summary of activities for the allowance for credit losses as of and for the twelve months ended December 31, 2025, 2024, and 2023 by portfolio segment (in thousands):
 CommercialCommercial Real Estate1-4 Family Real EstateConsumerTotal
Allowance for credit losses:    
Beginning balance, January 1, 2025$1,752 $17,766 $2,751 $3,534 $25,803 
Provision (credit) for credit losses (1)
954 2,128 (449)1,567 4,200 
Charge-offs(169)— — (222)(391)
Recoveries210 50 70 129 459 
Ending balance, December 31, 2025$2,747 $19,944 $2,372 $5,008 $30,071 
(1) Represents credit losses for loans only. The provision for credit losses on the Consolidated Statements of Income of $3,754 includes a $716 credit for held-to-maturity securities and a $270 provision for unfunded loan commitments.

CommercialCommercial Real Estate1-4 FamilyConsumerTotal
Allowance for credit losses:    
Beginning balance, January 1, 2024$1,475 $9,792 $2,435 $951 $14,653 
Allowance for loan loss on purchased credit deteriorated loans (PCD)375 371 2 73 821 
Provision for credit losses (1)
515 7,543 242 2,492 10,792 
Charge-offs(677)— — (132)(809)
Recoveries64 60 72 150 346 
Ending balance, December 31, 2024$1,752 $17,766 $2,751 $3,534 $25,803 
(1) Represents credit losses for loans only. The provision for credit losses on the Consolidated Statements of Income of $11,113 includes a $105 provision for held-to-maturity securities and a $216 provision for unfunded loan commitments.

CommercialReal Estate1-4 FamilyConsumerUnallocatedTotal
Allowance for credit losses:    
Beginning balance, January 1, 2023 prior to adoption of ASU 2016-13 (CECL)$1,820 $7,803 $601 $284 $340 $10,848 
Impact of adoption of ASU 2016-13448 1,693 1,620 489 (340)3,910 
(Credit) provision for credit losses (1)
(766)296 199 186 — (85)
Charge-offs(636)— — (53)— (689)
Recoveries609 — 15 45 — 669 
Ending balance, December 31, 2023$1,475 $9,792 $2,435 $951 $— $14,653 
(1) Represents credit losses for loans only. The provision for credit losses on the Consolidated Statements of Income of $309 includes a $276 provision for held-to-maturity securities and a $118 provision for unfunded loan commitments.

During the twelve month period ended December 31, 2025, the provision for credit losses was primarily driven by loan growth. Additionally, the Company recorded an allowance for individually evaluated loans of $2.8 million during the year ended December 31, 2025 compared to $0 as of December 31, 2024. As of April 1, 2024, the Company recorded a provision for loan losses for non PCD loans of $10,877,000 and an allowance for credit losses for PCD loans $821,000 for the loan portfolio with a fair value of $920 million. During 2024, the Company adjusted the weightings utilized for the most likely, downside, or upside economic scenarios by adding a fourth scenario. The fourth economic scenario added was a downside scenario that projected less severe economic effects as compared to the existing downside scenario used in the reserve calculation. The more moderate downside scenario was added in recognition of the risk of a broader economic downturn in the economy occurring in the next twelve months not as severe as the previous downside scenario. Management believes that the addition of the fourth scenario provides a balanced range for expected credit losses. The Company updated its peer group during the second quarter of 2024, adding peer banks within the central coast of California and also larger peer banks due to the Company’s expanded footprint and increased asset size. During 2025, the Company continued to utilize four economic scenarios: most likely, severe downside, moderate downside, and upside. As of December 31, 2025, the Company shifted the weightings for the severe
downside and moderate downside to be less weighted to the severe downside, but kept the weightings for base and upside consistent with December 31, 2024. Management believes that the allowance for credit losses at December 31, 2025 appropriately reflected expected credit losses in the loan portfolio at that date.

The following tables present the composition of nonaccrual loans as of December 31, 2025 and December 31, 2024 (in thousands).
December 31, 2025
With an ACLWithout an ACLTotal Nonaccrual
Commercial and industrial$1,533 $— 1,533 
Commercial real estate - owner occupied— 101 101 
Commercial real estate - non-owner occupied— 530 530 
Farmland— 1,525 1,525 
1-4 family real estate— 1,697 1,697 
Manufactured housing809 676 1,485 
Other installment64 20 84 
Total$2,406 $4,549 $6,955 
December 31, 2024
With an ACLWithout an ACLTotal Nonaccrual
Commercial real estate - owner occupied$— $120 $120 
Commercial real estate - non-owner occupied— 378 378 
Farmland— 2,398 2,398 
1-4 family real estate— 2,335 2,335 
Consumer— 15 15 
Manufactured housing— 1,215 1,215 
Total$— $6,461 $6,461 

The following tables present the amortized cost basis of collateral dependent loans by class of loans and by collateral type as of the dates indicated as of December 31, 2025 and December 31, 2024 (in thousands).
December 31, 2025
Manufactured HomesReal EstateMachinery & EquipmentTotal
Commercial and industrial$— $— $1,533 $1,533 
Commercial real estate - owner occupied— 101 — 101 
Commercial real estate - non-owner occupied— 13,394 530 13,924 
Farmland— 1,525 — 1,525 
1-4 family real estate— 1,697 — 1,697 
Manufactured housing1,485 — — 1,485 
Other installment— — 84 84 
Total$1,485 $16,717 $2,147 $20,349 
December 31, 2024
Manufactured HomesReal EstateMachinery & EquipmentTotal
Commercial and industrial$— $— $— $— 
Commercial real estate - owner occupied— 120 — 120 
Commercial real estate - non-owner occupied— — 378 378 
Farmland— 2,398 — 2,398 
1-4 family real estate— 2,335 — 2,335 
Manufactured housing1,215 — — 1,215 
Total$1,215 $4,853 $378 $6,446 
Purchased loans and leases that reflect a more-than-insignificant deterioration of credit quality from origination are considered PCD. At the time of acquisition, the initial estimate of expected losses is recognized in the ACL. The following table provides a summary of loans and leases purchased as part of the acquisition with credit deterioration at the time of acquisition of April 1, 2024 (in thousands):

April 1, 2024
Par Value of Loans AcquiredAllowance for Credit Losses at AcquisitionNon-Credit Discount at AcquisitionPurchase Price of Loans at Acquisition
Commercial$7,360 $(375)$(416)$6,569 
Commercial real estate20,622 (359)(1,037)19,226 
Farmland1,617 (12)(56)1,549 
1-4 family real estate 572 (2)(24)546 
Manufacturing housing947 (73)(11)863 
Total$31,118 $(821)$(1,544)$28,753 

The following table shows the loan portfolio by class, net of deferred costs, allocated by management’s internal risk ratings for the period indicated (in thousands):
Term Loans Amortized Cost Basis by Origination Year As of December 31, 2025
20252024202320222021PriorRevolving LoansRevolving Converted to TermTotal
Commercial and industrial
Pass/Watch$22,082 $23,892 $8,368 $13,847 $12,978 $8,523 $56,992 $— $146,682 
Special mention715 — 66 678 — — — — 1,459 
Substandard100 23 — 1,510 159 7,086 — — 8,878 
Total$22,897 $23,915 $8,434 $16,035 $13,137 $15,609 $56,992 $— $157,019 
Current period gross write-offs$169 $— $— $— $— $— $— $— $169 
Agricultural production
Pass/Watch$1,637 $1,044 $43 $— $5 $120 $29,372 $189 $32,410 
Special mention— — — — — — 1,775 1,775 
Substandard— — — — — — — — 
Total$1,637 $1,044 $43 $— $5 $120 $31,147 $189 $34,185 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Construction & other land loans
Pass/Watch$22,329 $39,870 $6,610 $3,812 $5,267 $1,424 $370 $— $79,682 
Special mention— — — — — — — — — 
Substandard— — — — — 82 — — 82 
Total$22,329 $39,870 $6,610 $3,812 $5,267 $1,506 $370 $— $79,764 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate - owner occupied
Pass/Watch$61,648 $47,277 $26,339 $46,297 $41,591 $131,861 $8,258 $— $363,271 
Special mention— — — — — — — — — 
Substandard— — 1,733 — — 3,003 — — 4,736 
Total$61,648 $47,277 $28,072 $46,297 $41,591 $134,864 $8,258 $— $368,007 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate - non-owner occupied
Pass/Watch$135,558 $74,414 $98,549 $175,212 $116,070 $305,565 $27,275 $— $932,643 
Special mention— 20,217 — 4,211 615 3,746 350 — 29,139 
Substandard— — — 5,965 — 21,070 2,128 — 29,163 
Total$135,558 $94,631 $98,549 $185,388 $116,685 $330,381 $29,753 $— $990,945 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Farmland
Pass/Watch$5,516 $4,569 $4,345 $16,049 $10,888 $61,865 $8,978 $1,500 $113,710 
Special mention1,800 — 399 — — 3,983 — — 6,182 
Substandard— — 3,824 9,808 — 5,918 2,574 — 22,124 
Total$7,316 $4,569 $8,568 $25,857 $10,888 $71,766 $11,552 $1,500 $142,016 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Multi-family residential
Pass/Watch$27,289 $12,287 $21,926 $30,928 $45,465 $28,376 $9,624 $— $175,895 
Special mention— — 15,600 — — — — — 15,600 
Substandard— — — — — 7,283 — — 7,283 
Total$27,289 $12,287 $37,526 $30,928 $45,465 $35,659 $9,624 $— $198,778 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 family - close-ended
Pass/Watch$5,628 $2,020 $4,306 $55,888 $10,199 $19,882 $11,073 $230 $109,226 
Special mention— — — — — — — — — 
Substandard— 64 — 1,931 — 535 — — 2,530 
Total$5,628 $2,084 $4,306 $57,819 $10,199 $20,417 $11,073 $230 $111,756 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 family - revolving
Pass/Watch$— $— $— $— $— $— $34,783 $5,231 $40,014 
Special mention— — — — — — — — — 
Substandard— — — — — — — 37 37 
Total$— $— $— $— $— $— $34,783 $5,268 $40,051 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Manufactured housing
Pass/Watch$37,751 $42,557 $36,972 $41,922 $33,714 $126,298 $— $— $319,214 
Special mention— — — — — — — — — 
Substandard— 117 369 2 690 2,216 — — 3,394 
Total$37,751 $42,674 $37,341 $41,924 $34,404 $128,514 $— $— $322,608 
Current period gross write-offs$17 $— $— $— $— $— $— $— $17 
Other installment
Pass/Watch$32,798 $34,074 $15,061 $3,793 $3,419 $5,549 $465 $— $95,159 
Special mention— — — — — — — — — 
Substandard— — 28 365 93 83 — — 569 
Total$32,798 $34,074 $15,089 $4,158 $3,512 $5,632 $465 $— $95,728 
Current period gross write-offs$205 $— $— $— $— $— $— $— $205 
Total loans outstanding (risk rating):
Pass/Watch$352,236 $282,004 $222,519 $387,748 $279,596 $689,463 $187,190 $7,150 $2,407,906 
Special mention2,515 20,217 16,065 4,889 615 7,729 2,125 — 54,155 
Substandard100 204 5,954 19,581 942 47,276 4,702 37 78,796 
Grand Total$354,851 $302,425 $244,538 $412,218 $281,153 $744,468 $194,017 $7,187 $2,540,857 
Current period total gross write-offs$391 $— $— $— $— $— $— $— $391 
Term Loans Amortized Cost Basis by Origination Year As of December 31, 2024
20242023202220212020PriorRevolving LoansRevolving Converted to TermTotal
Commercial and industrial
Pass/Watch$29,768 $13,064 $16,231 $14,639 $4,518 $9,457 $44,199 $1,022 $132,898 
Special mention— — — 1,498 — — — — 1,498 
Substandard29 — 1,545 — — 1,106 6,700 — 9,380 
Total$29,797 $13,064 $17,776 $16,137 $4,518 $10,563 $50,899 $1,022 $143,776 
Current period gross write-offs$120 $— $5 $— $— $45 $— $— $170 
Agricultural production
Pass/Watch$5,152 $284 $— $9 $— $300 $31,620 $— $37,365 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total$5,152 $284 $— $9 $— $300 $31,620 $— $37,365 
Current period gross write-offs$— $— $507 $— $— $— $— $— $507 
Construction & other land loans
Pass/Watch$12,413 $20,137 $19,290 $14,166 $701 $733 $100 $— $67,540 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total$12,413 $20,137 $19,290 $14,166 $701 $733 $100 $— $67,540 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate - owner occupied
Pass/Watch$48,191 $23,314 $45,741 $43,354 $31,354 $117,466 $7,086 $— $316,506 
Special mention— — — — 158 2,958 — — 3,116 
Substandard— 1,765 — — 946 584 — — 3,295 
Total$48,191 $25,079 $45,741 $43,354 $32,458 $121,008 $7,086 $— $322,917 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate - non-owner occupied
Pass/Watch$95,131 $115,292 $188,516 $118,773 $74,762 $261,586 $33,453 $1,250 $888,763 
Special mention— — 590 633 — 6,356 — — 7,579 
Substandard— — — — — 15,846 — — 15,846 
Total$95,131 $115,292 $189,106 $119,406 $74,762 $283,788 $33,453 $1,250 $912,188 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Farmland
Pass/Watch$7,691 $4,945 $21,383 $12,288 $29,379 $42,815 $5,731 $— $124,232 
Special mention— 4,025 — — — — 1,166 — 5,191 
Substandard— — 3,312 — 2,029 4,962 — — 10,303 
Total$7,691 $8,970 $24,695 $12,288 $31,408 $47,777 $6,897 $— $139,726 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Multi-family residential
Pass/Watch$12,844 $2,950 $31,070 $45,835 $13,591 $25,555 $1,671 $— $133,516 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total$12,844 $2,950 $31,070 $45,835 $13,591 $25,555 $1,671 $— $133,516 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 family - close-ended
Pass/Watch$2,501 $5,405 $63,350 $13,581 $6,993 $24,830 $3,975 $— $120,635 
Special mention— — — — — — — — — 
Substandard78 — 2,257 — — 551 — — 2,886 
Total$2,579 $5,405 $65,607 $13,581 $6,993 $25,381 $3,975 $— $123,521 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 family - revolving
Pass/Watch$— $— $— $— $— $— $29,718 $5,808 $35,526 
Special mention— — — — — — — — — 
Substandard— — — — — — — 116 116 
Total$— $— $— $— $— $— $29,718 $5,924 $35,642 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Manufactured housing
Pass/Watch$47,839 $43,468 $46,608 $39,299 $37,551 $105,216 $— $— $319,981 
Special mention— — — — — — — — $— 
Substandard— — 318 464 481 1,015 — — $2,278 
Total$47,839 $43,468 $46,926 $39,763 $38,032 $106,231 $— $— $322,259 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Other installment
Pass/Watch$53,869 $22,700 $6,254 $4,987 $1,371 $5,740 $660 $— $95,581 
Special mention— — — — — — — — — 
Substandard— 15 62 37 63 13 — — 190 
Total$53,869 $22,715 $6,316 $5,024 $1,434 $5,753 $660 $— $95,771 
Current period gross write-offs$58 $10 $50 $— $— $13 $1 $— $132 
Total loans outstanding (risk rating):
Pass/Watch$315,399 $251,559 $438,443 $306,931 $200,220 $593,698 $158,213 $8,080 $2,272,543 
Special mention— 4,025 590 2,131 158 9,314 1,166 — 17,384 
Substandard107 1,780 7,494 501 3,519 24,077 6,700 116 44,294 
Grand Total$315,506 $257,364 $446,527 $309,563 $203,897 $627,089 $166,079 $8,196 $2,334,221 
Current period total gross write-offs$178 $10 $562 $— $— $58 $1 $— $809 
The following table shows an aging analysis of the loan portfolio by class at December 31, 2025 (in thousands):

 30-59 Days
Past Due		60-89
Days Past
Due
Greater
Than
 89 Days
Past Due
Total Past
Due		CurrentTotal
Loans		Loans Past Due > 89 Days, Still AccruingNon-accrual
Commercial:        
Commercial and industrial$551 $64 $1,510 $2,125 $154,619 $156,744 $— $1,533 
Agricultural production— — — — 34,152 34,152 — — 
Real estate:
Construction & other land loans— — — — 80,452 80,452 — — 
Commercial real estate - owner occupied239 — — 239 368,365 368,604 — 101 
Commercial real estate - non-owner occupied13,389 — 530 13,919 978,567 992,486 — 530 
Farmland— — 1,525 1,525 140,575 142,100 — 1,525 
Multi-family residential— — — — 199,123 199,123 — — 
1-4 family - close-ended1,552 772 1,184 3,508 108,233 111,741 — 1,697 
1-4 family - revolving569 — — 569 39,249 39,818 — — 
Consumer:
Manufactured housing723 345 — 1,068 321,693 322,761 — 1,485 
Other installment162 93 — 255 92,334 92,589 — 84 
Deferred costs— — — — 287 287 — — 
Total$17,185 $1,274 $4,749 $23,208 $2,517,649 $2,540,857 $— $6,955 
The following table shows an aging analysis of the loan portfolio by class at December 31, 2024 (in thousands):
 30-59 Days
Past Due		60-89
Days Past
Due		Greater
Than
 89 Days
Past Due		Total Past
Due		CurrentTotal
Loans		Loans Past Due > 89 Days, Still AccruingNon-
accrual
Commercial:        
Commercial and industrial$272 $— $— $272 $143,150 $143,422 $— $— 
Agricultural production— — — — 37,323 37,323 — — 
Real estate:  
Construction & other land loans— — — — 67,869 67,869 — — 
Commercial real estate - owner occupied242 — — 242 322,946 323,188 — 120 
Commercial real estate - non-owner occupied— — 378 378 912,787 913,165 — 378 
Farmland164 — 2,398 2,562 137,253 139,815 — 2,398 
Multi-family residential— — — — 133,595 133,595 — — 
1-4 family - close-ended2,071 1,909 78 4,058 119,387 123,445 — 2,335 
1-4 family - revolving648 — — 648 34,773 35,421 — — 
Consumer:
Manufactured housing535 — 460 995321,268 322,263 — 1,215 
Other installment656 27 — 683 92,156 92,839 — 15 
Deferred costs— — — — 1,876 1,876 — — 
Total$4,588 $1,936 $3,314 $9,838 $2,324,383 $2,334,221 $— $6,461 


Foregone interest on nonaccrual loans totaled $400,000, $234,000 and $0 for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. Interest income recognized on non-accrual loans for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 was $45,000, $22,000, and $0, respectively.

Occasionally, the Company modifies loans to borrowers in financial distress by providing reductions of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. There were no loan modifications granted to borrowers experiencing financial difficulty during the years ended December 31, 2025 or 2024.