Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Substantially all of these commitments are at variable interest rates, based on an index, and have fixed expiration dates.

Off-balance sheet risk to loan loss exists up to the face amount of these instruments, although material losses are not anticipated. The Company uses the same credit policies in making commitments to originate loans and lines of credit as it does for on-balance sheet instruments, including obtaining collateral at exercise of the commitment. The contractual amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets at the dates indicated are presented in Table 8.1.


Table 8.1: Unfunded Loan Commitments and Standby Letters of Credit
(in thousands)	June 30, 2026		December 31, 2025
Commercial lines of credit	$	338,497	$	287,988
Agricultural lines of credit	143,875		94,559
Undisbursed commercial real estate loans	131,867		82,420
Undisbursed construction loans	99,370		26,236
Undisbursed residential real estate loans	7,138		5,965
Undisbursed agricultural real estate loans	4,320		4,470
Other	1,607		1,627
Total commitments and standby letters of credit	$	726,674	$	503,265

The Company records an allowance for credit losses on unfunded loan commitments at the consolidated balance sheet date based on estimates of the probability that these commitments will be drawn upon according to historical utilization experience of the different types of commitments and historical loss rates determined for pooled funded loans. The allowance for credit losses on unfunded commitments totaled $1.1 million as of June 30, 2026 and $0.7 million as of December 31, 2025, which is recorded in “Interest payable and other liabilities” in the unaudited consolidated balance sheets.

Concentrations of credit risk: The Company grants real estate mortgage, real estate construction, commercial, and consumer loans to customers primarily in Northern California. Although the Company has a diversified loan portfolio, a substantial portion is secured by commercial and residential real estate.

In management’s judgment, a concentration of loans exists in real estate related loans, which represented approximately 85.08% of the Company’s loan portfolio at June 30, 2026 and 86.07% of the Company’s loan portfolio at December 31, 2025. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, or a decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on the collectability of these loans. Personal and business incomes represent the primary source of repayment for the majority of these loans.

Deposit concentrations: At June 30, 2026, the Company had 157 deposit relationships that exceeded $5.0 million each, totaling $3.1 billion, or approximately 63.88% of total deposits. The Company’s largest single deposit relationship at June 30, 2026 totaled $340.1 million, or approximately 7.09% of total deposits. Management maintains the Company’s liquidity position and lines of credit with correspondent banks to mitigate the risk of large withdrawals by this group of large depositors.

Contingencies: The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially adversely affect the consolidated financial position or results of operations of the Company.

Correspondent banking agreements: The Company maintains funds on deposit with other FDIC-insured financial institutions under correspondent banking agreements. Uninsured deposits through these agreements totaled approximately $40.0 million and $27.4 million at June 30, 2026 and December 31, 2025, respectively.

Equity investments: The Company is a limited partner and has committed to and is invested in a limited number of venture-backed capital funds. As of June 30, 2026 and December 31, 2025, the balance of these investments totaled approximately $15.2 million and $12.1 million, respectively. As of June 30, 2026 and December 31, 2025, the estimated remaining commitment for these funds totaled $10.3 million and $13.7 million, respectively.

The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially adversely affect the consolidated financial position or results of operations of the Company.