The Company’s investment securities portfolio includes obligations of states and political subdivisions, securities issued by U.S. federal government agencies, such as the U.S. Small Business Administration (the “SBA”), and securities issued by U.S. Government Sponsored Entities (“GSEs”), such as the Federal National Mortgage Association (the “FNMA”), the Federal Home Loan Mortgage Corporation (the “FHLMC”), and the FHLB. The Company also invests in residential and commercial mortgage-backed securities, collateralized mortgage obligations issued or guaranteed by GSEs, and corporate bonds, as reflected in Tables 3.1 and 3.2.

A summary of the amortized cost and fair value related to securities held-to-maturity as of June 30, 2026 and December 31, 2025 is presented in Table 3.1. Securities held-to-maturity, at amortized cost, had a $20.0 thousand allowance for credit losses as of June 30, 2026 and December 31, 2025.


Table 3.1: Securities Held-to-Maturity
(in thousands)	Amortized Cost		Gross Unrealized				Fair Value
			Gains		(Losses)
June 30, 2026
Obligations of states and political subdivisions	$	2,135	$	—	$	(208)	$	1,927
Total held-to-maturity	$	2,135	$	—	$	(208)	$	1,927
December 31, 2025
Obligations of states and political subdivisions	$	2,190	$	—	$	(195)	$	1,995
Total held-to-maturity	$	2,190	$	—	$	(195)	$	1,995

For securities issued by states and political subdivisions, for purposes of evaluating whether to recognize credit loss expense, management considers: (i) issuer and/or guarantor credit ratings; (ii) historical probability of default and loss given default rates for given bond ratings and remaining maturity; (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities; (iv) internal credit review of the financial information; and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the issuers.

As of June 30, 2026 and December 31, 2025, the allowance for credit losses on held-to-maturity securities, at amortized cost, was $20.0 thousand. The Company did not record an allowance for credit losses on available-for-sale securities, at fair value, as of June 30, 2026 or December 31, 2025.

A summary of the amortized cost and fair value related to securities available-for-sale as of June 30, 2026 and December 31, 2025 is presented in Table 3.2. Securities available-for-sale did not have an allowance for credit losses as of June 30, 2026 or December 31, 2025.


Table 3.2: Securities Available-for-Sale
(in thousands)	Amortized Cost		Gross Unrealized				Fair Value
			Gains		(Losses)
June 30, 2026
U.S. government agency securities	$	6,447	$	154	$	(50)	$	6,551
Mortgage-backed securities	54,171		28		(8,968)		45,231
Obligations of states and political subdivisions	40,471		—		(3,854)		36,617
Collateralized mortgage obligations	219		—		(16)		203
Corporate bonds	2,000		—		(18)		1,982
Total available-for-sale	$	103,308	$	182	$	(12,906)	$	90,584
December 31, 2025
U.S. government agency securities	$	7,276	$	138	$	(53)	$	7,361
Mortgage-backed securities	56,941		31		(8,786)		48,186
Obligations of states and political subdivisions	40,734		—		(3,770)		36,964
Collateralized mortgage obligations	246		—		(15)		231
Corporate bonds	2,000		—		(43)		1,957
Total available-for-sale	$	107,197	$	169	$	(12,667)	$	94,699

The amortized cost and fair value of investment securities by contractual maturity at June 30, 2026 and December 31, 2025 are shown in Table 3.3. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.


Table 3.3: Contractual Maturities - Investment Securities
(in thousands)	June 30, 2026								December 31, 2025
	Held-to-Maturity				Available-for-Sale				Held-to-Maturity				Available-for-Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	165	$	149	$	—	$	—	$	170	$	155	$	—	$	—
After one but within five years	840		758		2,525		2,392		865		788		1,256		1,196
After five years through ten years	1,130		1,020		16,089		14,609		1,155		1,052		13,471		12,385
After ten years	—		—		21,857		19,616		—		—		26,007		23,383

Investment securities not due at a single maturity date:
U.S. government agency securities	—		—		6,447		6,551		—		—		7,276		7,361
Mortgage-backed securities	—		—		54,171		45,231		—		—		56,941		48,186
Collateralized mortgage obligations	—		—		219		203		—		—		246		231
Corporate bonds	—		—		2,000		1,982		—		—		2,000		1,957
Total	$	2,135	$	1,927	$	103,308	$	90,584	$	2,190	$	1,995	$	107,197	$	94,699


Table 3.4: Pledged Investment Securities
(in thousands)	June 30, 2026		December 31, 2025
Pledged to:
The State of California, securing deposits of public funds and borrowings	$	44,151	$	47,091
The Federal Reserve Discount Window, increasing borrowing capacity	41,534		42,578
Total pledged investment securities	$	85,685	$	89,669

Table 3.5 details the gross unrealized losses and fair values aggregated by investment category and length of time that individual available-for-sale securities have been in a continuous unrealized loss position at June 30, 2026 and December 31, 2025.


Table 3.5: Securities Available-for-Sale in Continuous Unrealized Loss Positions
(in thousands)	Less than 12 months				12 months or more				Total securities in a loss position
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
June 30, 2026
U.S. government agency securities	$	1,137	$	(5)	$	1,858	$	(45)	$	2,995	$	(50)
Mortgage-backed securities	—		—		44,150		(8,968)		44,150		(8,968)
Obligations of states and political subdivisions	—		—		36,617		(3,854)		36,617		(3,854)
Collateralized mortgage obligations	—		—		203		(16)		203		(16)
Corporate bonds	—		—		1,982		(18)		1,982		(18)
Total temporarily impaired securities	$	1,137	$	(5)	$	84,810	$	(12,901)	$	85,947	$	(12,906)

December 31, 2025
U.S. government agency securities	$	1,683	$	(6)	$	2,393	$	(47)	$	4,076	$	(53)
Mortgage-backed securities	—		—		47,090		(8,786)		47,090		(8,786)
Obligations of states and political subdivisions	360		(20)		36,603		(3,750)		36,963		(3,770)
Collateralized mortgage obligations	—		—		231		(15)		231		(15)
Corporate bonds	—		—		1,957		(43)		1,957		(43)
Total temporarily impaired securities	$	2,043	$	(26)	$	88,274	$	(12,641)	$	90,317	$	(12,667)

There were 145 and 147 available-for-sale securities in unrealized loss positions at June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, the investment portfolio included 143 investment securities that had been in a continuous loss position for twelve months or more and two investment securities that had been in a loss position for less than twelve months.

Obligations issued or guaranteed by government agencies such as the Government National Mortgage Association (the “GNMA”) and the SBA, or GSEs under conservatorship such as the FNMA and the FHLMC, are guaranteed or sponsored by agencies of the U.S. government and have strong credit profiles. The Company therefore expects to receive all contractual interest payments on time and believes the risk of credit losses on these securities is remote.

The Company’s investment in obligations of states and political subdivisions is deemed credit worthy after management’s comprehensive analysis of the issuers’ latest financial information, credit ratings by major credit agencies, and/or credit enhancements.

FHLB capital stock: As a member of the FHLB, the Company is required to maintain a minimum investment in FHLB capital stock determined by the board of directors of the FHLB. The minimum investment requirements can increase in the event the Company increases its total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. The Company held $15.0 million of FHLB stock at both June 30, 2026 and December 31, 2025. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value. Based on management’s analysis of the FHLB’s financial condition and certain qualitative factors, management determined that the FHLB stock was not impaired at June 30, 2026 or December 31, 2025.

Equity investments: The Company is a limited partner and has committed to and is invested in a limited number of venture-backed capital funds and accounts for these investments under the equity method of accounting, as its ownership is greater than 3% of each fund. The Company held $15.2 million and $12.1 million of equity investments at June 30, 2026 and December 31, 2025, respectively, included in “Interest receivable and other assets” in the unaudited consolidated balance sheets. The Company’s share of earnings and losses from these investments is included in “Other non-interest income” in the consolidated statements of income. The Company’s share of net losses from these investments was $0.3 million for the six months ended June 30, 2026. The Company’s share of net earnings from these investments was $0.4 million for the six months ended June 30, 2025. No individual investment is material to the Company’s consolidated financial statements. Based on management’s analysis of each fund’s financial condition and certain qualitative factors, management determined that the equity investments were not impaired at June 30, 2026 and 2025.