For the Quarterly Period Ended June 30, 2026

or

For the Transition Period From To

Commission File Number: 000-30421

(Exact Name of Registrant as Specified in its Charter)

(213) 382-2200

Not Applicable

Part I — Financial Information

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Three Months Ended June 30, 2026 and 2025

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Six Months Ended June 30, 2026 and 2025

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Hanmi Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Accounting Standards Adopted in 2026

Recently Issued Accounting Standards Not Yet Effective

ASU 2024-03, Income Statement Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), as amended by ASU 2025-01, Clarifying the Effective Date: In November 2024, the FASB issued ASU 2024-03 to require additional information about specific expense categories in the financial statement notes at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements. The amendments affect where the information appears in the financial statement notes. ASU 2025-01 amends the changes in ASU 2024-03 to be effective for fiscal years beginning after December 15, 2026. The adoption of ASU 2024-03 is not expected to have a material effect on the Company’s operating results or financial condition.

Note 2 — Securities

Note 3 — Loans

Loans, net of allowance for credit losses

Loans Held for Sale

Note 4 — Servicing Assets

Note 5 — Income Taxes

Included in time deposits more than $250,000 were State of California time deposits of $180.0 million and $150.0 million at June 30, 2026 and December 31, 2025, respectively. Included in other time deposits were brokered deposits of $86.9 million and $88.5 million at June 30, 2026 and December 31, 2025, respectively.

Accrued interest payable on deposits was $27.5 million and $34.8 million at June 30, 2026 and December 31, 2025, respectively. Total deposits reclassified to loans due to overdrafts at June 30, 2026 and December 31, 2025 were $1.8 million and $2.4 million, respectively.

Note 8 — Borrowings and Subordinated Debentures

Note 9 — Earnings Per Share

Note 10 — Regulatory Matters

Note 11 — Fair Value Measurements

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Note 13 — Leases

Cash Dividend

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Critical Accounting Policies

Results of Operations

Net Interest Income

Credit Loss Expense

Noninterest Income

Noninterest Expense

Income Tax Expense

Financial Condition

Securities

Loans

Industry

Loan Quality Indicators

Borrowings and Subordinated Debentures

Capital Resources and Liquidity

Off-Balance Sheet Arrangements

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

Part II — Other Information

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Item 3. Defaults Upon Senior Securities

Item 4. Mine Safety Disclosures

Item 5. Other Information

Item 6. Exhibits

Signatures

Capital Resources

Liquidity

For a discussion of liquidity for the Company, see Note 14 - Liquidity, included in the notes to unaudited consolidated financial statements in this Report, and Note 22 – Liquidity in our 2025 Annual Report on Form 10-K.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

HANMI FINANCIAL CORPORATION


Delaware		95-4788120
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)


900 Wilshire Boulevard, Suite 1250
Los Angeles, California		90017
(Address of Principal Executive Offices)		(Zip Code)

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities Registered Pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, $0.001 par value

     HAFC

     Nasdaq 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 ☒ No ☐

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 during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an 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 filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging Growth Company	☐

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of July 30, 2026, there were 29,649,255 outstanding shares of the Registrant’s Common Stock.

Hanmi Financial Corporation and Subsidiaries Quarterly Report on Form 10-Q

Three Months Ended June 30, 2026

Table of Contents


	Part I – Financial Information

Item 1.	Financial Statements	3

	Consolidated Balance Sheets at June 30, 2026 (unaudited) and December 31, 2025	3

	Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025 (unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025 (unaudited)	7

	Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (unaudited)	8

	Notes to Consolidated Financial Statements (unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64

Item 4.	Controls and Procedures	64

	Part II – Other Information

Item 1.	Legal Proceedings	65

Item 1A.	Risk Factors	65

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	65

Item 3.	Defaults Upon Senior Securities	65

Item 4.	Mine Safety Disclosures	65

Item 5.	Other Information	65

Item 6.	Exhibits	66

Signatures		67

Item 1. Financial Statements

Hanmi Financial Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)


	June 30,			December 31,
	2026			2025
	(Unaudited)
Assets
Cash and due from banks	$	331,206		$	212,841
Securities available for sale, at fair value (amortized cost of $962,255 and $941,760 as of June 30, 2026 and December 31, 2025, respectively)		896,610			880,624
Loans held for sale, at the lower of cost or fair value		16,969			7,403
Loans, net of allowance for credit losses of $70,475 and $69,903 as of June 30, 2026 and December 31, 2025, respectively		6,464,837			6,493,465
Accrued interest receivable		24,613			24,466
Premises and equipment, net		20,251			20,378
Customers’ liability on acceptances		116			125
Servicing assets		6,419			6,459
Goodwill		11,031			11,031
Federal Home Loan Bank (“FHLB”) stock, at cost		16,385			16,385
Income tax assets		53,555			40,467
Bank-owned life insurance		56,048			56,697
Prepaid expenses and other assets		103,433			98,844
Total assets	$	8,001,473		$	7,869,185

Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	2,135,418		$	2,015,212
Interest-bearing		4,819,924			4,662,438
Total deposits		6,955,342			6,677,650
Accrued interest payable		27,530			34,783
Bank’s liability on acceptances		116			125
Borrowings		—			150,000
Subordinated debentures		130,773			130,463
Accrued expenses and other liabilities		75,032			79,778
Total liabilities		7,188,793			7,072,799
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 10,000,000 shares; no shares issued as of June 30, 2026 and December 31, 2025		—			—
Common stock, $0.001 par value; authorized 62,500,000 shares; issued 34,445,437 shares (29,650,306 shares outstanding) and 34,287,779 shares (29,894,757 shares outstanding) as of June 30, 2026 and December 31, 2025, respectively		34			34
Additional paid-in capital		596,303			594,667
Accumulated other comprehensive loss, net of tax benefit of $19,093 and $17,822 as of June 30, 2026 and December 31, 2025, respectively		(46,552	)		(43,175	)
Retained earnings		423,499			394,335
Less treasury stock; 4,795,131 shares and 4,393,022 shares as of June 30, 2026 and December 31, 2025, respectively		(160,604	)		(149,475	)
Total stockholders’ equity		812,680			796,386
Total liabilities and stockholders’ equity	$	8,001,473		$	7,869,185

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(in thousands, except share and per share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Interest and dividend income:
Interest and fees on loans	$	94,808	$	92,589	$	188,674	$	183,476
Interest on securities		6,337		6,261		12,296		12,430
Dividends on FHLB stock		219		354		1,050		714
Interest on deposits in other banks		1,958		2,129		3,454		3,969
Total interest and dividend income		103,322		101,333		205,474		200,589
Interest expense:
Interest on deposits		37,774		41,924		74,512		82,483
Interest on borrowings		154		684		830		2,708
Interest on subordinated debentures		1,537		1,586		3,072		3,167
Total interest expense		39,465		44,194		78,414		88,358
Net interest income before credit loss expense		63,857		57,139		127,060		112,231
Credit loss expense		1,186		7,631		4,078		10,352
Net interest income after credit loss expense		62,671		49,508		122,982		101,879
Noninterest income:
Service charges on deposit accounts		2,102		2,169		4,229		4,387
Trade finance and other service charges and fees		1,902		1,461		3,403		2,858
Gain on sale of Small Business Administration (“SBA”) loans		1,318		2,160		3,421		4,161
Gain on sale of residential mortgage loans		357		—		842		175
Other operating income		2,669		2,281		4,992		4,215
Total noninterest income		8,348		8,071		16,887		15,796
Noninterest expense:
Salaries and employee benefits		22,784		22,069		44,740		43,041
Occupancy and equipment		4,383		4,344		8,797		8,794
Data processing		4,555		3,727		8,941		7,514
Professional fees		1,997		1,725		4,777		3,194
Supplies and communications		491		515		1,047		1,031
Advertising and promotion		679		798		1,368		1,382
Other operating expenses		4,150		3,169		7,737		6,374
Total noninterest expense		39,039		36,347		77,407		71,330
Income before tax		31,980		21,232		62,462		46,345
Income tax expense		8,475		6,115		16,400		13,556
Net income	$	23,505	$	15,117	$	46,062	$	32,789
Basic earnings per share	$	0.79	$	0.50	$	1.54	$	1.09
Diluted earnings per share	$	0.79	$	0.50	$	1.54	$	1.08
Weighted-average shares outstanding:
Basic		29,514,712		29,948,836		29,593,872		29,943,279
Diluted		29,689,113		30,054,456		29,770,045		30,048,704

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

(in thousands)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025

Net income	$	23,505		$	15,117		$	46,062		$	32,789
Other comprehensive income (loss), net of tax:
Unrealized gain (loss):
Unrealized holding gain (loss) on available for sale securities		(1,352	)		7,706			(4,509	)		22,248
Unrealized loss on cash flow hedges		—			(235	)		(57	)		(45	)
Unrealized gain (loss)		(1,352	)		7,471			(4,566	)		22,203
Income tax benefit (expense) related to other comprehensive income items		370			(2,155	)		1,249			(6,339	)
Other comprehensive income (loss)		(982	)		5,316			(3,317	)		15,864

Reclassification adjustment for (gains) losses included in net income		(22	)		248			(82	)		493
Income tax benefit (expense) related to reclassification adjustment		5			(73	)		22			(145	)
Reclassification adjustment for (gains) losses included in net income, net of tax		(17	)		175			(60	)		348
Other comprehensive income (loss), net of tax		(999	)		5,491			(3,377	)		16,212
Total comprehensive income	$	22,506		$	20,608		$	42,685		$	49,001

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

(in thousands, except share data)


	Common Stock - Number of Shares								Stockholders' Equity
													Accumulated
											Additional		Other						Treasury			Total
	Shares		Treasury			Shares			Common		Paid-in		Comprehensive			Retained			Stock,			Stockholders’
	Issued		Shares			Outstanding			Stock		Capital		Loss			Earnings			at Cost			Equity

Balance at April 1, 2026		34,426,691		(4,619,997	)		29,806,694		$	34	$	595,374	$	(45,553	)	$	408,327		$	(155,363	)	$	802,819
Net income		—		—			—			—		—		—			23,505			—			23,505
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		(982	)		—			—			(982	)
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		(17	)		—			—			(17	)
Cash dividends paid (common stock, $0.28/share)		—		—			—			—		—		—			(8,333	)		—			(8,333	)
Repurchase of common stock		—		(160,000	)		(160,000	)		—		—		—			—			(4,838	)		(4,838	)
Issuance of awards pursuant to equity incentive plans, net of forfeitures		18,746		—			18,746			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		929		—			—			—			929
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(15,134	)		(15,134	)		—		—		—			—			(403	)		(403	)
Balance at June 30, 2026		34,445,437		(4,795,131	)		29,650,306		$	34	$	596,303	$	(46,552	)	$	423,499		$	(160,604	)	$	812,680

Balance at April 1, 2025		34,265,030		(4,031,516	)		30,233,514		$	34	$	591,942	$	(60,002	)	$	360,289		$	(140,778	)	$	751,485
Net income		—		—			—			—		—		—			15,117			—			15,117
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		5,482			—			—			5,482
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		9			—			—			9
Cash dividends paid (common stock, $0.27/share)		—		—			—			—		—		—			(8,155	)		—			(8,155	)
Repurchase of common stock		—		(70,000	)		(70,000	)		—		—		—			—			(1,628	)		(1,628	)
Issuance of awards pursuant to equity incentive plans, net of forfeitures		29,007		—			29,007			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		883		—			—			—			883
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(15,953	)		(15,953	)		—		—		—			—			(359	)		(359	)
Balance at June 30, 2025		34,294,037		(4,117,469	)		30,176,568		$	34	$	592,825	$	(54,511	)	$	367,251		$	(142,765	)	$	762,834

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

(in thousands, except share data)


	Common Stock - Number of Shares								Stockholders' Equity
													Accumulated
											Additional		Other						Treasury			Total
	Shares		Treasury			Shares			Common		Paid-in		Comprehensive			Retained			Stock,			Stockholders’
	Issued		Shares			Outstanding			Stock		Capital		Loss			Earnings			at Cost			Equity

Balance at January 1, 2026		34,287,779		(4,393,022	)		29,894,757		$	34	$	594,667	$	(43,175	)	$	394,335		$	(149,475	)	$	796,386
Net income		—		—			—			—		—		—			46,062			—			46,062
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		(3,276	)		—			—			(3,276	)
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		(101	)		—			—			(101	)
Cash dividends paid (common stock, $0.56/share)		—		—			—			—		—		—			(16,898	)		—			(16,898	)
Repurchase of common stock		—		(345,707	)		(345,707	)		—		—		—			—			(9,646	)		(9,646	)
Stock options exercised		—		—			—			—		—		—			—			—			—
Issuance of awards pursuant to equity incentive plans, net of forfeitures		157,658		—			157,658			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		1,636		—			—			—			1,636
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(56,402	)		(56,402	)		—		—		—			—			(1,483	)		(1,483	)
Balance at June 30, 2026		34,445,437		(4,795,131	)		29,650,306		$	34	$	596,303	$	(46,552	)	$	423,499		$	(160,604	)	$	812,680

Balance at January 1, 2025		34,151,464		(3,955,465	)		30,195,999		$	34	$	591,069	$	(70,723	)	$	350,869		$	(139,075	)	$	732,174
Net income		—		—			—			—		—		—			32,789			—			32,789
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		15,892			—			—			15,892
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		320			—			—			320
Cash dividends paid (common stock, $0.54/share)		—		—			—			—		—		—			(16,407	)		—			(16,407	)
Repurchase of common stock		—		(120,000	)		(120,000	)		—		—		—			—			(2,752	)		(2,752	)
Issuance of awards pursuant to equity incentive plans, net of forfeitures		142,573		—			142,573			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		1,756		—			—			—			1,756
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(42,004	)		(42,004	)		—		—		—			—			(938	)		(938	)
Balance at June 30, 2025		34,294,037		(4,117,469	)		30,176,568		$	34	$	592,825	$	(54,511	)	$	367,251		$	(142,765	)	$	762,834

See Accompanying Notes to Consolidated Financial Statements (Unaudited)


	Six Months Ended June 30,
	2026			2025
Cash flows from operating activities:
Net income	$	46,062		$	32,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,720			1,629
Amortization of servicing assets - net		1,153			1,335
Share-based compensation expense		1,636			1,756
Credit loss expense		4,078			10,352
Gain on sales of other real estate owned		(850	)		—
Gain on sales of SBA loans		(3,421	)		(4,161	)
Gain on sales of residential mortgage loans		(842	)		(175	)
Origination of loans held for sale		(128,320	)		(108,610	)
Proceeds from sales of loans		123,263			83,090
Change in bank-owned life insurance		649			183
Change in prepaid expenses and other assets		(6,624	)		(4,686	)
Change in income tax assets		(11,839	)		(988	)
Change in accrued interest payable and other liabilities		(11,613	)		(4,636	)
Net cash provided by operating activities		15,052			7,878
Cash flows from investing activities:
Purchases of securities available for sale		(181,101	)		(101,004	)
Proceeds from matured, called and repayment of securities		159,276			109,626
Purchases of loans		(12,569	)		(44,631	)
Purchases of premises and equipment		(1,592	)		(832	)
Proceeds from disposition of premises and equipment		16			14
Proceeds from sales of other real estate owned ("OREO")		2,830			713
Change in loans, excluding purchases and sales		36,788			(34,761	)
Net cash provided by (used in) investing activities		3,648			(70,875	)
Cash flows from financing activities:
Change in deposits		277,692			293,346
Change in open FHLB advances		—			(135,000	)
Repayments of FHLB term advances		(150,000	)		—
Cash paid for surrendered employee vested shares due to tax liability		(1,483	)		(938	)
Repurchase of common stock		(9,646	)		(2,754	)
Cash dividends paid		(16,898	)		(16,407	)
Net cash provided by financing activities		99,665			138,247
Net increase in cash and due from banks		118,365			75,250
Cash and due from banks at beginning of year		212,841			304,800
Cash and due from banks at end of period	$	331,206		$	380,050
Supplemental disclosures of cash flow information:
Interest paid	$	85,667		$	92,615
Income taxes paid	$	26,884		$	13,590
Non-cash activities:
Transfer of loans to loans held for sale	$	1,433		$	—
Income tax benefit (expense) related to other comprehensive income items	$	1,271		$	(6,484	)
Right-of-use asset obtained in exchange for lease liability	$	3,591		$	3,814

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

Note 1 — Organization and Basis of Presentation

Hanmi Financial Corporation (“Hanmi Financial,” the “Company,” “we,” “us” or “our”) is a bank holding company whose primary subsidiary is Hanmi Bank (the “Bank”). Our primary operations are related to traditional banking activities, including the acceptance of deposits and the lending and investing of money by the Bank.

In management’s opinion, the accompanying unaudited consolidated financial statements of Hanmi Financial and its subsidiaries reflect all adjustments of a normal and recurring nature that are necessary for a fair presentation of the results for the period ended June 30, 2026. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. The unaudited consolidated financial statements are prepared in conformity with GAAP and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Operating results for the three-month and six-month periods ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ended December 31, 2026 or for any other period. The interim information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).

The preparation of interim unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. These estimates and assumptions affect the amounts reported in the unaudited financial statements and disclosures provided, and actual results could differ.

Descriptions of our significant accounting policies are included in Note 1 - Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in the 2025 Annual Report on Form 10-K.

The Company has not adopted any accounting standards in 2026.

ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software: In September 2025, the FASB issued ASU 2025-06 to simplify the accounting for internal-use software by replacing the existing project-stage-based model with a principles-based approach to determine capitalizable versus non-capitalizable costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The adoption of ASU 2025-06 is not expected to have a material effect on the Company’s operating results or financial condition.

ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans: In November 2025, the FASB issued ASU 2025-08 to improve the accounting for acquired financial assets by expanding the gross-up approach to all purchased loans and eliminating the previous duplication inherent in Day 1 credit loss measurement. ASU 2025-08 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The adoption of ASU 2025-08 is not expected to have a material effect on the Company's operating results or financial condition.

ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements: In November 2025, the FASB issued ASU 2025-09 to more closely align hedge accounting with the economics of an entity's risk management activities by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions. ASU 2025-09 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The adoption of ASU 2025-09 is not expected to have a material effect on the Company's operating results or financial condition.

The following is a summary of securities available for sale as of the dates indicated:


			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gain		Loss			Value
	(in thousands)
June 30, 2026
U.S. Treasury securities	$	211,878	$	24	$	(485	)	$	211,417
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		394,720		538		(40,430	)		354,828
Mortgage-backed securities - commercial		73,852		17		(11,669	)		62,200
Collateralized mortgage obligations		164,731		486		(6,265	)		158,952
Debt securities		42,565		—		(539	)		42,026
Total U.S. government agency and sponsored agency obligations		675,868		1,041		(58,903	)		618,006
Municipal bonds-tax exempt		74,509		—		(7,322	)		67,187
Total securities available for sale	$	962,255	$	1,065	$	(66,710	)	$	896,610

December 31, 2025
U.S. Treasury securities	$	128,569	$	298	$	(157	)	$	128,710
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		411,223		926		(38,741	)		373,408
Mortgage-backed securities - commercial		71,751		116		(11,295	)		60,572
Collateralized mortgage obligations		188,120		1,768		(5,933	)		183,955
Debt securities		67,059		—		(1,105	)		65,954
Total U.S. government agency and sponsored agency obligations		738,153		2,810		(57,074	)		683,889
Municipal bonds-tax exempt		75,038		—		(7,013	)		68,025
Total securities available for sale	$	941,760	$	3,108	$	(64,244	)	$	880,624

The amortized cost and estimated fair value of securities as of June 30, 2026 and December 31, 2025, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. All other securities are included based on their contractual maturities. Mortgage-backed securities included in the table below may be repaid before their contractual maturities.


	June 30, 2026				December 31, 2025
	Available for Sale				Available for Sale
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
	(in thousands)
Within one year	$	182,678	$	181,944	$	159,050	$	158,399
Over one year through five years		96,493		95,365		65,994		64,919
Over five years through ten years		286,927		258,160		234,306		213,596
Over ten years		396,157		361,141		482,410		443,710
Total	$	962,255	$	896,610	$	941,760	$	880,624

The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded at June 30, 2026 or December 31, 2025, aggregated by major security type and length of time in a continuous unrealized loss position:


	Holding Period
	Less than 12 Months							12 Months or More							Total
	Gross			Estimated		Number		Gross			Estimated		Number		Gross			Estimated		Number
	Unrealized			Fair		of		Unrealized			Fair		of		Unrealized			Fair		of
	Loss			Value		Securities		Loss			Value		Securities		Loss			Value		Securities
	(in thousands, except number of securities)
June 30, 2026
U.S. Treasury securities	$	(423	)	$	174,452		39	$	(62	)	$	10,440		3	$	(485	)	$	184,892		42
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(291	)		24,434		6		(40,139	)		297,345		115		(40,430	)		321,779		121
Mortgage-backed securities - commercial		(166	)		12,221		4		(11,503	)		48,288		14		(11,669	)		60,509		18
Collateralized mortgage obligations		(212	)		52,053		13		(6,053	)		41,783		21		(6,265	)		93,836		34
Debt securities		(36	)		9,963		2		(503	)		32,062		7		(539	)		42,025		9
Total U.S. government agency and sponsored agency obligations		(705	)		98,671		25		(58,198	)		419,478		157		(58,903	)		518,149		182
Municipal bonds-tax exempt		—			—		—		(7,322	)		67,186		19		(7,322	)		67,186		19
Total	$	(1,128	)	$	273,123		64	$	(65,582	)	$	497,104		179	$	(66,710	)	$	770,227		243

December 31, 2025
U.S. Treasury securities	$	—		$	4,999		1	$	(157	)	$	10,351		3	$	(157	)	$	15,350		4
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(46	)		4,629		2		(38,695	)		322,912		114		(38,741	)		327,541		116
Mortgage-backed securities - commercial		—			—		—		(11,295	)		54,316		16		(11,295	)		54,316		16
Collateralized mortgage obligations		—			—		—		(5,933	)		50,264		24		(5,933	)		50,264		24
Debt securities		—			—		—		(1,105	)		65,954		13		(1,105	)		65,954		13
Total U.S. government agency and sponsored agency obligations		(46	)		4,629		2		(57,028	)		493,446		167		(57,074	)		498,075		169
Municipal bonds-tax exempt		—			—		—		(7,013	)		68,025		19		(7,013	)		68,025		19
Total	$	(46	)	$	9,628		3	$	(64,198	)	$	571,822		189	$	(64,244	)	$	581,450		192

The Company evaluates its available for sale securities portfolio for impairment on a quarterly basis. The Company did not recognize unrealized losses in income because it has the ability and the intent to hold and does not expect to be required to sell these securities until the recovery of their cost basis. The quarterly impairment assessment takes into account the changes in the credit quality of these debt securities since acquisition and the likelihood of a credit loss occurring over the life of the securities. If a credit loss is expected to occur, an allowance is established and a corresponding credit loss is recognized. Based on this analysis, the Company determined that no credit losses are expected to be realized on the tax-exempt municipal bond portfolio. The remainder of the securities portfolio consists of U.S. Treasury obligations, U.S. government agency securities, and U.S. government sponsored agency securities, all of which have the backing of the U.S. government and are therefore not expected to incur credit losses.

There were no sales of securities during the six months ended June 30, 2026 or June 30, 2025.

As of June 30, 2026 and December 31, 2025, there were no securities available for sale that were pledged to secure advances or other borrowings.

At June 30, 2026, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

Loans, net of allowance for credit losses, consisted of the following as of the dates indicated:


	June 30, 2026			December 31, 2025
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,193,177		$	1,132,439
Hospitality		858,617			847,989
Office		479,110			503,268
Other (1)		1,477,659			1,532,667
Total commercial property loans		4,008,563			4,016,363
Construction		13,757			13,742
Residential (2)		978,881			1,049,872
Total real estate loans		5,001,201			5,079,977
Commercial and industrial loans		1,171,272			1,074,908
Equipment financing agreements		362,839			408,483
Total loans		6,535,312			6,563,368
Allowance for credit losses		(70,475	)		(69,903	)
Total loans, net of allowance for credit losses	$	6,464,837		$	6,493,465

(1)

Includes, among other property types, mixed-use, gas station, multifamily, industrial, and faith-based facilities; the remaining real estate categories represent less than 1% of the Bank's total loans.

(2)

Includes $0.9 million and $1.0 million of home equity loans and lines and $4.9 million and $3.8 million of personal loans at June 30, 2026 and December 31, 2025, respectively.

Accrued interest receivable on loans was $20.2 million and $20.7 million at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026 and December 31, 2025, loans with carrying values of $2.20 billion and $2.40 billion, respectively, were pledged to secure advances from the FHLB, and loans with carrying values of $1.22 billion and $528.1 million, respectively, were pledged to the Federal Reserve Bank of San Francisco Discount Window.

Activity in loans held for sale is presented below for the following periods:


	Real Estate			Commercial and Industrial			Total
	(in thousands)
Three months ended June 30, 2026
Balance at beginning of period	$	2,714		$	2,218		$	4,932
Originations and transfers		53,118			14,093			67,211
Sales		(42,541	)		(12,216	)		(54,757	)
Principal paydowns and amortization		(1	)		(416	)		(417	)
Balance at end of period	$	13,290		$	3,679		$	16,969

Three months ended June 30, 2025
Balance at beginning of period	$	5,015		$	6,816		$	11,831
Originations and transfers		56,000			17,190			73,190
Sales		(15,601	)		(19,787	)		(35,388	)
Principal paydowns and amortization		(2	)		(20	)		(22	)
Balance at end of period	$	45,412		$	4,199		$	49,611


	Real Estate			Commercial and Industrial			Total
	(in thousands)
Six months ended June 30, 2026
Balance at beginning of period	$	4,985		$	2,418		$	7,403
Originations and transfers		104,742			25,011			129,753
Sales		(95,668	)		(23,332	)		(119,000	)
Principal payoffs and amortization		(769	)		(418	)		(1,187	)
Balance at end of period	$	13,290		$	3,679		$	16,969

Six months ended June 30, 2025
Balance at beginning of period	$	3,994		$	4,585		$	8,579
Originations and transfers		74,615			33,995			108,610
Sales		(33,195	)		(34,358	)		(67,553	)
Principal payoffs and amortization		(2	)		(23	)		(25	)
Balance at end of period	$	45,412		$	4,199		$	49,611

All loans sold during the six months ended June 30, 2026 were sold from the held for sale portfolio. During 2025, we sold residential mortgage loans from the held for investment portfolio when the decision to sell the loans and the sale of the loans occurred within the same quarter. During the six months ended June 30, 2025, we sold $10.0 million of residential mortgage loans from the held for investment portfolio, and none from the held for sale portfolio. During the three months ended June 30, 2025, we sold no residential mortgage loans.

Loan Purchases

The following table presents loans purchased by portfolio segment for the following periods:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
	(in thousands)
Commercial real estate	$	—	$	—	$	—	$	15,113
Commercial and industrial		268		—		268		9,203
Residential real estate		12,301		10,330		12,301		20,315
Total	$	12,569	$	10,330	$	12,569	$	44,631

Allowance for Credit Losses

The following table details the information on the allowance for credit losses by portfolio segment for the following periods:


	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
Three months ended June 30, 2026
Balance at beginning of period	$	50,108		$	8,811		$	11,549		$	70,468
Charge-offs		(28	)		(275	)		(1,590	)		(1,893	)
Recoveries		39			37			553			629
Credit loss expense (recovery)		(992	)		107			2,156			1,271
Ending balance	$	49,127		$	8,680		$	12,668		$	70,475

Three months ended June 30, 2025
Balance at beginning of period	$	51,302		$	6,242		$	13,053		$	70,597
Charge-offs		(8,615	)		(811	)		(2,951	)		(12,377	)
Recoveries		194			198			621			1,013
Credit loss expense		5,140			1,306			1,077			7,523
Ending balance	$	48,021		$	6,935		$	11,800		$	66,756


	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
Six months ended June 30, 2026
Balance at beginning of period	$	51,670		$	7,792		$	10,441		$	69,903
Charge-offs		(160	)		(402	)		(4,502	)		(5,064	)
Recoveries		84			76			1,042			1,202
Credit loss expense (recovery)		(2,467	)		1,214			5,687			4,434
Ending balance	$	49,127		$	8,680		$	12,668		$	70,475

Six months ended June 30, 2025
Balance at beginning of period	$	45,099		$	10,006		$	15,042		$	70,147
Charge-offs		(8,785	)		(1,033	)		(5,749	)		(15,567	)
Recoveries		618			234			1,404			2,256
Credit loss expense (recovery)		11,089			(2,272	)		1,103			9,920
Ending balance	$	48,021		$	6,935		$	11,800		$	66,756

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the total investment in loans as of:


	June 30, 2026										December 31, 2025
	Allowance					Loans					Allowance					Loans
	Amount		%			Amount		%			Amount		%			Amount		%
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	11,022		15.6	%	$	1,193,177		18.3	%	$	9,999		14.3	%	$	1,132,439		17.3	%
Hospitality		7,475		10.6			858,617		13.1			8,737		12.5			847,989		12.9
Office		4,968		7.1			479,110		7.3			5,700		8.2			503,268		7.7
Other		13,828		19.6			1,477,659		22.6			14,078		20.1			1,532,667		23.4
Total commercial property loans		37,293		52.9			4,008,563		61.3			38,514		55.1			4,016,363		61.3
Construction		174		0.3			13,757		0.2			208		0.3			13,742		0.2
Residential		11,659		16.5			978,881		15.0			12,948		18.5			1,049,872		16.0
Total real estate loans		49,126		69.7			5,001,201		76.5			51,670		73.9			5,079,977		77.5
Commercial and industrial loans		8,681		12.3			1,171,272		17.9			7,792		11.1			1,074,908		16.4
Equipment financing agreements		12,668		18.0			362,839		5.6			10,441		15.0			408,483		6.1
Total	$	70,475		100.0	%	$	6,535,312		100.0	%	$	69,903		100.0	%	$	6,563,368		100.0	%

The following table represents the amortized cost basis of collateral-dependent loans by class, for which repayment is expected to be obtained through the sale or operation of the underlying collateral, as of:


	June 30, 2026		December 31, 2025
	(in thousands)
Real estate loans:
Commercial property
Retail	$	429	$	596
Hospitality		—		—
Office		337		10,159
Other		1,143		671
Total commercial property loans		1,909		11,426
Residential		3,251		1,113
Total real estate loans		5,160		12,539
Total	$	5,160	$	12,539

Loan Quality Indicators

As part of the on-going monitoring of the quality of our loans portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade (from 1 to 8) for each loan in our portfolio. Third-party loan reviews are conducted annually on a sample basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows:

Pass and Pass-Watch: Pass loans, grades (1-4), are in compliance with the Bank’s credit policy and regulatory requirements and do not exhibit any potential or defined weaknesses as defined under “Special Mention,” “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It consists of all performing loans with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans. Pass-Watch loans, grade (4), require enhanced attention due to financial or other circumstances facing the borrowers, which may adversely affect future financial performance.

Special Mention: A Special Mention loan, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified.

Substandard: A Substandard loan, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.

Doubtful: A Doubtful loan, grade (7), is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the loan, and therefore the amount or timing of a possible loss cannot be determined at the current time.

Loss: A loan classified as Loss, grade (8), is considered uncollectible and of such little value that their continuance as active bank assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as Loss will be charged off in a timely manner.

Under regulatory guidance, loans graded special mention or worse are considered criticized loans, and loans graded substandard or worse are considered classified loans.

Loans by Vintage Year and Risk Rating


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2026		2025			2024		2023		2022		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
June 30, 2026
Real estate loans:
Commercial property
Risk Rating
Pass / Pass-Watch	$	738,201	$	811,834		$	374,320	$	352,443	$	788,844	$	816,289		$	39,836		$	3,921,767
Special Mention		816		54,500			—		521		594		293			—			56,724
Classified		—		596			—		21,186		1,336		6,954			—			30,072
Total commercial property		739,017		866,930			374,320		374,150		790,774		823,536			39,836			4,008,563
YTD gross charge-offs		—		—			—		—		41		91			—			132
YTD net charge-offs (recoveries)		—		(5	)		—		—		41		14			—			50

Construction
Risk Rating
Pass / Pass-Watch		2,562		7,196			3,999		—		—		—			—			13,757
Special Mention		—		—			—		—		—		—			—			—
Classified		—		—			—		—		—		—			—			—
Total construction		2,562		7,196			3,999		—		—		—			—			13,757
YTD gross charge-offs		—		—			—		—		—		—			—			—
YTD net charge-offs (recoveries)		—		—			—		—		—		—			—			—

Residential
Risk Rating
Pass / Pass-Watch		69,820		203,412			61,386		115,578		309,122		208,702			5,197			973,217
Special Mention		—		—			—		—				—			—			—
Classified		—		—			663		878		3,502		621			—			5,664
Total residential		69,820		203,412			62,049		116,456		312,624		209,323			5,197			978,881
YTD gross charge-offs		—		—			—		—		28		—			—			28
YTD net charge-offs (recoveries)		—		—			—		—		28		(2	)		—			26

Total real estate loans
Risk Rating
Pass / Pass-Watch		810,583		1,022,442			439,705		468,021		1,097,966		1,024,991			45,033			4,908,741
Special Mention		816		54,500			—		521		594		293			—			56,724
Classified		—		596			663		22,064		4,838		7,575			—			35,736
Total real estate loans		811,399		1,077,538			440,368		490,606		1,103,398		1,032,859			45,033			5,001,201
YTD gross charge-offs		—		—			—		—		69		91			—			160
YTD net charge-offs (recoveries)		—		(5	)		—		—		69		12			—			76

Commercial and industrial loans:
Risk Rating
Pass / Pass-Watch		264,494		281,204			142,939		35,570		20,474		22,771			386,545			1,153,997
Special Mention		242		—			35		—		11,197		—			—			11,474
Classified		4,998		151			85		—		124		43			400			5,801
Total commercial and industrial loans		269,734		281,355			143,059		35,570		31,795		22,814			386,945			1,171,272
YTD gross charge-offs		—		37			91		51		155		68			—			402
YTD net charge-offs (recoveries)		—		37			91		51		120		28			(1	)		326

Equipment financing agreements:
Risk Rating
Pass / Pass-Watch		62,615		116,418			67,967		61,519		41,488		8,621			—			358,628
Special Mention		—		—			—		—		—		—			—			—
Classified		—		811			929		940		1,126		405			—			4,211
Total equipment financing agreements		62,615		117,229			68,896		62,459		42,614		9,026			—			362,839
YTD gross charge-offs		—		1,551			525		802		1,260		364			—			4,502
YTD net charge-offs (recoveries)		—		1,549			471		671		989		(220	)		—			3,460

Total loans:
Risk Rating
Pass / Pass-Watch		1,137,692		1,420,064			650,611		565,110		1,159,928		1,056,383			431,578			6,421,366
Special Mention		1,058		54,500			35		521		11,791		293			—			68,198
Classified		4,998		1,558			1,677		23,004		6,088		8,023			400			45,748
Total loans	$	1,143,748	$	1,476,122		$	652,323	$	588,635	$	1,177,807	$	1,064,699		$	431,978		$	6,535,312
YTD gross charge-offs		—		1,588			616		853		1,484		523			—			5,064
YTD net charge-offs (recoveries)		—		1,581			562		722		1,178		(180	)		(1	)		3,862

(1)

Origination year includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2025			2024		2023		2022		2021		Prior			Revolving Loans Amortized Cost Basis			Total

December 31, 2025
Real estate loans:
Commercial property
Risk Rating
Pass / Pass-Watch	$	1,181,833		$	402,354	$	472,027	$	808,330	$	735,411	$	285,598		$	54,824		$	3,940,377
Special Mention		55,029			—		—		148		1,371		298			—			56,846
Classified		3,846			—		—		11,225		—		4,069			—			19,140
Total commercial property		1,240,708			402,354		472,027		819,703		736,782		289,965			54,824			4,016,363
YTD gross charge-offs		—			—		—		8,820		—		392			—			9,212
YTD net charge-offs (recoveries)		(8	)		—		—		8,547		—		(24	)		—			8,515

Construction
Risk Rating
Pass / Pass-Watch		9,745			3,997		—		—		—		—			—			13,742
Special Mention		—			—		—		—		—		—			—			—
Classified		—			—		—		—		—		—			—			—
Total construction		9,745			3,997		—		—		—		—			—			13,742
YTD gross charge-offs		—			—		—		—		—		—			—			—
YTD net charge-offs (recoveries)		—			—		—		—		—		—			—			—

Residential
Risk Rating
Pass / Pass-Watch		258,847			84,457		142,926		326,126		132,510		97,076			4,154			1,046,096
Special Mention		—			—		—		2,417		—		—			250			2,667
Classified		—			—		—		1,113		—		(4	)		—			1,109
Total residential		258,847			84,457		142,926		329,656		132,510		97,072			4,404			1,049,872
YTD gross charge-offs		—			—		—		—		—		—			—			—
YTD net charge-offs (recoveries)		—			—		—		—		—		(4	)		—			(4	)

Total real estate loans
Risk Rating
Pass / Pass-Watch		1,450,425			490,808		614,953		1,134,456		867,921		382,674			58,978			5,000,215
Special Mention		55,029			—		—		2,565		1,371		298			250			59,513
Classified		3,846			—		—		12,338		—		4,065			—			20,249
Total real estate loans		1,509,300			490,808		614,953		1,149,359		869,292		387,037			59,228			5,079,977
YTD gross charge-offs		—			—		—		8,820		—		392			—			9,212
YTD net charge-offs (recoveries)		(8	)		—		—		8,547		—		(28	)		—			8,511

Commercial and industrial loans:
Risk Rating
Pass / Pass-Watch		426,520			168,307		40,485		44,797		19,772		16,931			345,975			1,062,787
Special Mention		—			—		—		11,600		—		—			—			11,600
Classified		—			—		—		148		—		21			352			521
Total commercial and industrial loans		426,520			168,307		40,485		56,545		19,772		16,952			346,327			1,074,908
YTD gross charge-offs		19			373		59		853		82		322			—			1,708
YTD net charge-offs (recoveries)		19			366		54		750		82		46			(2,723	)		(1,406	)

Equipment financing agreements:
Risk Rating
Pass / Pass-Watch		144,142			87,819		85,652		65,042		19,188		1,529			—			403,372
Special Mention		—			—		—		—		—		—			—			—
Classified		506			726		1,202		1,962		583		132			—			5,111
Total equipment financing agreements		144,648			88,545		86,854		67,004		19,771		1,661			—			408,483
YTD gross charge-offs		—			875		2,728		4,658		1,706		159			—			10,126
YTD net charge-offs (recoveries)		—			831		2,297		3,579		831		(234	)		(2	)		7,302

Total loans:
Risk Rating
Pass / Pass-Watch		2,021,087			746,934		741,090		1,244,295		906,881		401,134			404,953			6,466,374
Special Mention		55,029			—		—		14,165		1,371		298			250			71,113
Classified		4,352			726		1,202		14,448		583		4,218			352			25,881
Total loans	$	2,080,468		$	747,660	$	742,292	$	1,272,908	$	908,835	$	405,650		$	405,555		$	6,563,368
YTD gross charge-offs		19			1,248		2,787		14,331		1,788		873			—			21,046
YTD net charge-offs (recoveries)		11			1,197		2,351		12,876		913		(216	)		(2,725	)		14,407

(1)

Origination year includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

Loans by Vintage Year and Payment Performance


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2026		2025			2024		2023		2022		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
June 30, 2026
Real estate loans:
Commercial property
Payment performance
Performing	$	739,017	$	866,334		$	374,320	$	374,150	$	790,337	$	822,201		$	39,836		$	4,006,195
Nonperforming		—		596			—		—		437		1,335			—			2,368
Total commercial property		739,017		866,930			374,320		374,150		790,774		823,536			39,836			4,008,563
YTD gross charge-offs		—		—			—		—		41		91			—			132
YTD net charge-offs (recoveries)		—		(5	)		—		—		41		14			—			50

Construction
Payment performance
Performing		2,562		7,196			3,999		—		—		—			—			13,757
Nonperforming		—		—			—		—		—		—			—			—
Total construction		2,562		7,196			3,999		—		—		—			—			13,757
YTD gross charge-offs		—		—			—		—		—		—			—			—
YTD net charge-offs (recoveries)		—		—			—		—		—		—			—			—

Residential
Payment performance
Performing		69,820		203,412			61,386		115,578		311,538		208,702			5,197			975,633
Nonperforming							663		878		1,086		621			—			3,248
Total residential		69,820		203,412			62,049		116,456		312,624		209,323			5,197			978,881
YTD gross charge-offs		—		—			—		—		28		—			—			28
YTD net charge-offs (recoveries)		—		—			—		—		28		(2	)		—			26

Total real estate loans
Payment performance
Performing		811,399		1,076,942			439,705		489,728		1,101,875		1,030,903			45,033			4,995,585
Nonperforming		—		596			663		878		1,523		1,956			—			5,616
Total real estate loans		811,399		1,077,538			440,368		490,606		1,103,398		1,032,859			45,033			5,001,201
YTD gross charge-offs		—		—			—		—		69		91			—			160
YTD net charge-offs (recoveries)		—		(5	)		—		—		69		12			—			76

Commercial and industrial loans:
Payment performance
Performing		269,734		281,336			142,974		35,570		31,795		22,814			386,945			1,171,168
Nonperforming		—		19			85		—		—		—			—			104
Total commercial and industrial loans		269,734		281,355			143,059		35,570		31,795		22,814			386,945			1,171,272
YTD gross charge-offs		—		37			91		51		155		68			—			402
YTD net charge-offs (recoveries)		—		37			91		51		120		28			(1	)		326

Equipment financing agreements:
Payment performance
Performing		62,615		116,418			67,967		61,519		41,488		8,621			—			358,628
Nonperforming		—		811			929		940		1,126		405			—			4,211
Total equipment financing agreements		62,615		117,229			68,896		62,459		42,614		9,026			—			362,839
YTD gross charge-offs		—		1,551			525		802		1,260		364			—			4,502
YTD net charge-offs (recoveries)		—		1,549			471		671		989		(220	)		—			3,460

Total loans:
Payment performance
Performing		1,143,748		1,474,696			650,646		586,817		1,175,158		1,062,338			431,978			6,525,381
Nonperforming		—		1,426			1,677		1,818		2,649		2,361			—			9,931
Total loans	$	1,143,748	$	1,476,122		$	652,323	$	588,635	$	1,177,807	$	1,064,699		$	431,978		$	6,535,312
YTD gross charge-offs		—		1,588			616		853		1,484		523			—			5,064
YTD net charge-offs (recoveries)		—		1,581			562		722		1,178		(180	)		(1	)		3,862

(1)

Origination year includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2025			2024		2023		2022		2021		Prior			Revolving Loans Amortized Cost Basis			Total

December 31, 2025
Real estate loans:
Commercial property
Payment performance
Performing	$	1,240,037		$	402,354	$	472,027	$	809,391	$	736,782	$	289,102		$	54,824		$	4,004,517
Nonperforming		671			—		—		10,312		—		863			—			11,846
Total commercial property		1,240,708			402,354		472,027		819,703		736,782		289,965			54,824			4,016,363
YTD gross charge-offs		—			—		—		8,820		—		392			—			9,212
YTD net charge-offs (recoveries)		(8	)		—		—		8,547		—		(24	)		—			8,515

Construction
Payment performance
Performing		9,745			3,997		—		—		—		—			—			13,742
Nonperforming		—			—		—		—		—		—			—			—
Total construction		9,745			3,997		—		—		—		—			—			13,742
YTD gross charge-offs		—			—		—		—		—		—			—			—
YTD net charge-offs (recoveries)		—			—		—		—		—		—			—			—

Residential
Payment performance
Performing		258,847			84,457		142,926		328,543		132,510		97,076			4,404			1,048,763
Nonperforming		—			—		—		1,113		—		(4	)		—			1,109
Total residential		258,847			84,457		142,926		329,656		132,510		97,072			4,404			1,049,872
YTD gross charge-offs		—			—		—		—		—		—			—			—
YTD net charge-offs (recoveries)		—			—		—		—		—		(4	)		—			(4	)

Total real estate loans
Payment performance
Performing		1,508,629			490,808		614,953		1,137,934		869,292		386,178			59,228			5,067,022
Nonperforming		671			—		—		11,425		—		859			—			12,955
Total real estate loans		1,509,300			490,808		614,953		1,149,359		869,292		387,037			59,228			5,079,977
YTD gross charge-offs		—			—		—		8,820		—		392			—			9,212
YTD net charge-offs (recoveries)		(8	)		—		—		8,547		—		(28	)		—			8,511

Commercial and industrial loans:
Payment performance
Performing		426,520			168,307		40,485		56,499		19,772		16,952			346,327			1,074,862
Nonperforming		—			—		—		46		—		—			—			46
Total commercial and industrial loans		426,520			168,307		40,485		56,545		19,772		16,952			346,327			1,074,908
YTD gross charge-offs		19			373		59		853		82		322			—			1,708
YTD net charge-offs (recoveries)		19			366		54		750		82		46			(2,723	)		(1,406	)

Equipment financing agreements:
Payment performance
Performing		144,142			87,819		85,652		65,042		19,188		1,529			—			403,372
Nonperforming		506			726		1,202		1,962		583		132			—			5,111
Total equipment financing agreements		144,648			88,545		86,854		67,004		19,771		1,661			—			408,483
YTD gross charge-offs		—			875		2,728		4,658		1,706		159			—			10,126
YTD net charge-offs (recoveries)		—			831		2,297		3,579		831		(234	)		(2	)		7,302

Total loans:
Payment performance
Performing		2,079,291			746,934		741,090		1,259,475		908,252		404,659			405,555			6,545,256
Nonperforming		1,177			726		1,202		13,433		583		991			—			18,112
Total loans	$	2,080,468		$	747,660	$	742,292	$	1,272,908	$	908,835	$	405,650		$	405,555		$	6,563,368
YTD gross charge-offs		19			1,248		2,787		14,331		1,788		873			—			21,046
YTD net charge-offs (recoveries)		11			1,197		2,351		12,876		913		(216	)		(2,725	)		14,407

(1)

Origination year includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

The following is an aging analysis of loans, including loans on nonaccrual status, disaggregated by loan class, as of:


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
	(in thousands)
June 30, 2026
Real estate loans:
Commercial property
Retail	$	21,510	$	712	$	429	$	22,651	$	1,170,526	$	1,193,177
Hospitality		186		—		—		186		858,431		858,617
Office		—		—		337		337		478,773		479,110
Other		318		596		527		1,441		1,476,218		1,477,659
Total commercial property loans		22,014		1,308		1,293		24,615		3,983,948		4,008,563
Construction		—		—		—		—		13,757		13,757
Residential		4,486		1,785		1,825		8,096		970,785		978,881
Total real estate loans		26,500		3,093		3,118		32,711		4,968,490		5,001,201
Commercial and industrial loans		433		10		—		443		1,170,829		1,171,272
Equipment financing agreements		3,208		1,480		2,347		7,035		355,804		362,839
Total loans	$	30,141	$	4,583	$	5,465	$	40,189	$	6,495,123	$	6,535,312

December 31, 2025
Real estate loans:
Commercial property
Retail	$	2,002	$	590	$	154	$	2,746	$	1,129,693	$	1,132,439
Hospitality		3,135		—		—		3,135		844,854		847,989
Office		—		—		10,159		10,159		493,109		503,268
Other		325		657		—		982		1,531,685		1,532,667
Total commercial property loans		5,462		1,247		10,313		17,022		3,999,341		4,016,363
Construction		—		—		—		—		13,742		13,742
Residential		4,311		1,259		1,109		6,679		1,043,193		1,049,872
Total real estate loans		9,773		2,506		11,422		23,701		5,056,276		5,079,977
Commercial and industrial loans		788		—		—		788		1,074,120		1,074,908
Equipment financing agreements		4,604		1,788		2,956		9,348		399,135		408,483
Total loans	$	15,165	$	4,294	$	14,378	$	33,837	$	6,529,531	$	6,563,368

Nonaccrual Loans and Nonperforming Assets

The following tables represent the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of:


	June 30, 2026
	Nonaccrual Loans With No Allowance for Credit Losses			Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	429		$	473	$	—	$	902
Hospitality		(46	)		52		—		6
Office		337			—		—		337
Other		1,123			—		—		1,123
Total commercial property loans		1,843			525		—		2,368
Construction		—			—		—		—
Residential		3,248			—		—		3,248
Total real estate loans		5,091			525		—		5,616
Commercial and industrial loans		—			104		—		104
Equipment financing agreements		—			4,211		—		4,211
Total	$	5,091		$	4,840	$	—	$	9,931

	December 31, 2025
	Nonaccrual Loans With No Allowance for Credit Losses			Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	589		$	376	$	—	$	965
Hospitality		(39	)		83		—		44
Office		10,159			—		—		10,159
Other		671			7		—		678
Total commercial property loans		11,380			466		—		11,846
Residential		1,109			—		—		1,109
Total real estate loans		12,489			466		—		12,955
Commercial and industrial loans		—			46		—		46
Equipment financing agreements		(6	)		5,117		—		5,111
Total	$	12,483		$	5,629	$	—	$	18,112

The Company recognized $4,000 and $15,000 of interest income on nonaccrual loans for the three months ended June 30, 2026 and 2025, respectively. The Company recognized $5,000 and $361,000 of interest income on nonaccrual loans for the six months ended June 30, 2026 and 2025, respectively.

The following table details nonperforming assets as of the dates indicated:


	June 30, 2026		December 31, 2025
	(in thousands)
Nonaccrual loans	$	9,931	$	18,112
Loans 90 days or more past due and still accruing		—		—
Total nonperforming loans		9,931		18,112
Other real estate owned (“OREO”)		—		1,980
Total nonperforming assets*	$	9,931	$	20,092

* Excludes repossessed personal property of $0.3 million and $0.6 million as of June 30, 2026 and December 31, 2025, respectively.

There was no OREO as of June 30, 2026. As of December 31, 2025, OREO consisted of two properties with combined carrying values of $2.0 million. OREO is included in prepaid expenses and other assets in the accompanying consolidated balance sheets.

Loan Modifications

The following table presents the amortized cost of loans that were modified to borrowers experiencing financial difficulty during the period indicated:


	Interest Only/Principal Deferment
	Amortized Cost Basis		% of Total Class of Loans			Financial Effect
	(in thousands)
Six months ended June 30, 2026
Commercial and industrial loans	$	4,998		0.4	%	One loan with 12-month
						interest-only modification

The modified loan above was current at June 30, 2026. The Company has not committed to lend any additional amounts to the borrower included in the table above as of June 30, 2026. During the six months ended June 30, 2026 and 2025, there were no payment defaults on loans that were modified within the preceding 12 months.

No loans were modified to borrowers experiencing financial difficulty during the three months ended June 30, 2026 or during the six months ended June 30, 2025.

The activity in servicing assets was as follows for the periods indicated:


	Three Months Ended June 30,
	2026			2025
	(in thousands)
Balance at beginning of period	$	6,535		$	6,422
Addition related to sale of loans		425			678
Amortization		(541	)		(680	)
Balance at end of period	$	6,419		$	6,420


	Six Months Ended June 30,
	2026			2025
	(in thousands)

Balance at beginning of period	$	6,459		$	6,457
Addition related to sale of loans		1,111			1,335
Amortization		(1,151	)		(1,372	)
Balance at end of period	$	6,419		$	6,420

At June 30, 2026 and December 31, 2025, we serviced loans sold by the Bank to unaffiliated parties of $619.6 million and $615.9 million, respectively. These loans are maintained off-balance sheet and are not included in loans, net of allowance for credit losses, on the consolidated balance sheets. At June 30, 2026 and December 31, 2025, all loans serviced were SBA loans, except for $55.7 million and $62.5 million, respectively, of residential mortgage loans.

The Company recorded servicing fee income of $1.4 million and $1.3 million for the three months ended June 30, 2026 and 2025, respectively and $2.8 million and $2.6 million for the six months ended June 30, 2026 and 2025, respectively. Servicing fee income, net of amortization of servicing assets, is included in other operating income in the consolidated statements of income. Amortization expense was $0.5 million and $0.7 million for the three months ended June 30, 2026 and 2025, respectively and $1.2 million and $1.4 million for the six months ended June 30, 2026 and 2025, respectively.

The fair value of servicing rights was $9.1 million at June 30, 2026, which was determined using discount rates ranging from 6.8% to 20.4% and prepayment speeds ranging from 13.8% to 30.1%, depending on the stratification of the specific right. The fair value of servicing rights was $8.5 million at December 31, 2025, which was determined using discount rates ranging from 9.7% to 18.9% and prepayment speeds ranging from 20.2% to 28.0%, depending on the stratification of the specific right.

The Company’s income tax expense was $8.5 million and $6.1 million, representing effective tax rates of 26.5% and 28.8% for the three months ended June 30, 2026 and 2025, respectively. The Company’s income tax expense was $16.4 million and $13.6 million, representing effective tax rates of 26.3% and 29.3% for the six months ended June 30, 2026 and 2025, respectively.

Management concluded that as of both June 30, 2026 and December 31, 2025, a valuation allowance of $1.5 million was appropriate against certain state net operating loss carry forwards. For all other deferred tax assets, management believed it was more likely than not that these deferred tax assets will be realized principally through future taxable income and reversal of existing taxable temporary differences. Net deferred tax assets were $37.5 million and $37.4 million as of June 30, 2026 and December 31, 2025, respectively.

As of June 30, 2026, the Company was subject to examination by federal and various state tax authorities for the years ended December 31, 2021 through 2024. During the six months ended June 30, 2026, there were no material changes to the Company’s uncertain tax positions. The Company does not expect its unrecognized tax positions to change significantly over the next twelve months.

Note 6 — Goodwill

The Company had goodwill with a carrying amount of $11.0 million at June 30, 2026 and December 31, 2025. The Company performed an impairment analysis in the second quarter of 2026 and determined there was no impairment as of June 30, 2026. No triggering event occurred as of, or subsequent to June 30, 2026, that would require a reassessment of goodwill.

Note 7 — Deposits

The scheduled maturities of time deposits are as follows for the periods indicated:


	Time Deposits More Than $250,000		Other Time Deposits		Total
	(in thousands)
At June 30, 2026
2026	$	921,607	$	902,778	$	1,824,385
2027		331,207		480,659		811,866
2028		—		17,156		17,156
2029		—		425		425
2030 and thereafter		269		468		737
Total	$	1,253,083	$	1,401,486	$	2,654,569

At December 31, 2025
2026	$	1,136,877	$	1,285,988	$	2,422,865
2027		390		62,900		63,290
2028		—		16,473		16,473
2029		—		183		183
2030 and thereafter		269		341		610
Total	$	1,137,536	$	1,365,885	$	2,503,421

Borrowings consisted of FHLB advances, which represent collateralized obligations with the FHLB. The following is a summary of contractual maturities of FHLB advances:


	June 30, 2026					December 31, 2025
	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Open advances	$	—		—	%	$	—		—	%
Advances due within 12 months		—		—			150,000		4.02
Advances due over 12 months through 24 months		—		—			—		—
Outstanding advances	$	—		—	%	$	150,000		4.02	%

The following is financial data pertaining to FHLB advances:


	June 30, 2026			December 31, 2025
	(dollars in thousands)
Weighted-average interest rate at end of period		0.00	%		4.02	%
Weighted-average interest rate during the period		3.96	%		4.52	%
Average balance of FHLB advances	$	41,851		$	82,390
Maximum amount outstanding at any month-end	$	—		$	150,000

We had loans pledged to the FHLB as collateral with carrying values of $2.20 billion and $2.40 billion as of June 30, 2026 and December 31, 2025, respectively. The total borrowing capacity available from pledged collateral was $1.62 billion and $1.76 billion at June 30, 2026 and December 31, 2025, respectively. The remaining available borrowing capacity from pledged collateral was $1.44 billion and $1.46 billion at June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, borrowing capacity was reduced by $180.0 million in FHLB letters of credit, which were collateral for public fund deposits from the State of California. As of December 31, 2025, the borrowing capacity reduction was $150.0 million for the same purpose.

We also had loans pledged as collateral to the Federal Reserve Bank of San Francisco Discount Window with carrying values of $1.22 billion and $528.1 million as of June 30, 2026 and December 31, 2025, respectively. The borrowing capacity available through the Discount Window based on pledged loans was $858.0 million and $424.5 million as of June 30, 2026 and December 31, 2025, respectively. There was no balance outstanding as of June 30, 2026 or December 31, 2025.

Interest expense on FHLB advances for the three months ended June 30, 2026 and 2025 was $0.1 million and $0.7 million, respectively. Interest expense on FHLB advances for the six months ended June 30, 2026 and 2025 was $0.8 million and $2.7 million, respectively.

On August 20, 2021, the Company issued $110.0 million of Fixed-to-Floating Subordinated Notes (“2031 Notes”) with a maturity date of September 1, 2031. The 2031 Notes have an initial fixed interest rate of 3.75% per annum, payable semiannually in arrears on March 1 and September 1 of each year, up to but excluding September 1, 2026. From and including September 1, 2026 and thereafter, the 2031 Notes will bear interest at a floating rate per annum equal to the Three-Month Term SOFR plus 310 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year. If the then-current three-month term SOFR rate is less than zero, the three-month SOFR will be deemed to be zero. Debt issuance cost was $2.1 million, which is being amortized through the 2031 Notes’ maturity date. At June 30, 2026 and December 31, 2025, the balance of the 2031 Notes included in the Company’s consolidated balance sheet, net of issuance cost, was $108.8 million and $108.7 million, respectively.

The Company assumed Junior Subordinated Deferrable Interest Debentures (“Subordinated Debentures”) as a result of an acquisition in 2014 with an unpaid principal balance of $26.8 million and an estimated fair value of $18.5 million. The $8.3 million discount is being amortized to interest expense through the debentures’ maturity date of March 15, 2036. A trust was formed in 2005, which issued $26.0 million of Trust Preferred Securities (“TPS”) at a 6.26% fixed rate for the first five years and a variable rate of three-month LIBOR plus 140 basis points thereafter and invested the proceeds in the Subordinated Debentures. Beginning September 15, 2023, the variable rate on the TPS changed to three-month SOFR plus 166 basis points, representing the credit spread of 140 basis points and a 26 basis point adjustment to convert three-month LIBOR to three-month SOFR.

The rate on the TPS at June 30, 2026 was 5.33%. The Company may redeem the Subordinated Debentures at an earlier date if certain conditions are met. The TPS will be subject to mandatory redemption if the Subordinated Debentures are repaid by the Company. Interest is payable quarterly, and the Company has the option to defer interest payments on the Subordinated Debentures from time to time for a period not to exceed five consecutive years. At June 30, 2026 and December 31, 2025, the balance of Subordinated Debentures, net of discount of $4.1 million and $4.3 million, was $22.7 million and $22.5 million, respectively. These amounts do not reflect the consolidation of Hanmi Financial Corporation’s $0.8 million investment in the trust that issued the TPS. On a consolidated basis, the balance of Subordinated Debentures, net of discount, was $21.9 million and $21.7 million at June 30, 2026 and December 31, 2025, respectively. Amortization of the discount was $104,000 and $112,000 for the three months ended June 30, 2026 and 2025, respectively, and $208,000 and $224,000 for the six months ended June 30, 2026 and 2025, respectively.

On July 30, 2026, the Company issued $55.0 million of 6.50% Fixed-to-Floating Subordinated Notes with a maturity date of July 31, 2036 and provided notice to the trustee for the 2031 Notes of its intent to redeem all of such notes. See Note 17 - Subsequent Events.

Earnings per share (“EPS”) is calculated on both a basic and a diluted basis. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that then shared in earnings. Both basic and diluted EPS exclude common shares in treasury. For diluted EPS, the weighted-average number of common shares outstanding was diluted only by unvested performance stock units (“PSUs”) under the treasury method.

Unvested restricted stock awards contain rights to non-forfeitable dividends and are therefore considered participating securities prior to vesting. As a result, they have been included in the earnings allocation in computing basic and diluted EPS under the two-class method.

The following table is a reconciliation of the components used to derive basic and diluted EPS for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(dollars in thousands, except per share and unit amounts)
Basic EPS
Net income	$	23,505	$	15,117	$	46,062	$	32,789
Less: income allocated to unvested restricted stock		167		122		355		272
Income allocated to common shares	$	23,338	$	14,995	$	45,707	$	32,517
Weighted-average shares for basic EPS		29,514,712		29,948,836		29,593,872		29,943,279
Basic EPS (1)	$	0.79	$	0.50	$	1.54	$	1.09

Effect of dilutive PSUs		174,401		105,620		176,173		105,425

Diluted EPS
Income allocated to common shares	$	23,338	$	14,995	$	45,707	$	32,517
Weighted-average shares for diluted EPS		29,689,113		30,054,456		29,770,045		30,048,704
Diluted EPS (1)	$	0.79	$	0.50	$	1.54	$	1.08

(1)

Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

There were no options outstanding during the six months ended June 30, 2026. On a weighted-average basis, options to purchase 3,000 shares of common stock were excluded from the calculation of diluted earnings per share for the six months ended June 30, 2025 because their effect would have been anti-dilutive. Options with an exercise price greater than the average market price of the common shares are considered anti-dilutive. There were no anti-dilutive unvested PSUs outstanding for the six months ended June 30, 2026 or 2025.

During the six months ended June 30, 2026, 57,754 PSUs were awarded to executive officers from the 2021 Equity Compensation Plan, with a fair value of $1.5 million on the grant date of March 13, 2026. These units have a three-year cliff vesting period and include dividend equivalent rights. During the six months ended June 30, 2025, 53,509 PSUs were awarded to executive officers from the 2021 Equity Compensation Plan, with a fair value of $1.2 million on the grant date of March 26, 2025. These units also have a three-year cliff vesting period and include dividend equivalent rights. Total PSUs outstanding as of June 30, 2026 were 197,417 with an aggregate grant fair value of $3.8 million. Total PSUs outstanding as of June 30, 2025 were 191,804 with an aggregate grant fair value of $3.5 million.

Federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.0% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%. In addition to the risk-based guidelines, federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of Tier 1 capital to average assets, referred to as the leverage ratio, of 4.0%.

In order for banks to be considered “well capitalized,” federal bank regulatory agencies require a minimum ratio of qualifying total capital to risk-weighted assets of 10.0% and a minimum ratio of Tier 1 capital to risk-weighted assets of 8.0%. In addition to the risk-based guidelines, federal bank regulatory agencies require depository institutions to maintain a minimum ratio of Tier 1 capital to average assets, referred to as the leverage ratio, of 5.0%.

At June 30, 2026, the Bank’s capital ratios exceeded the minimum requirements for the Bank to be considered “well capitalized” and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.5% must be met to avoid limitations on the ability of the Bank and the Company to pay dividends, repurchase shares or pay discretionary bonuses. The Bank’s capital conservation buffer was 6.48% and 6.25% and the Company’s capital conservation buffer was 6.61% and 6.37% as of June 30, 2026 and December 31, 2025, respectively.

The capital ratios of Hanmi Financial and the Bank as of June 30, 2026 and December 31, 2025 were as follows:


						Minimum					Minimum to Be
						Regulatory					Categorized as
	Actual					Requirement					“Well Capitalized”
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
June 30, 2026
Total capital (to risk-weighted assets):
Hanmi Financial	$	1,041,195		15.29	%	$	544,652		8.00	%	N/A		N/A
Hanmi Bank	$	958,599		14.48	%	$	544,687		8.00	%	$	680,858		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	858,231		12.61	%	$	408,489		6.00	%	N/A		N/A
Hanmi Bank	$	912,635		13.40	%	$	408,515		6.00	%	$	544,687		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	836,297		12.28	%	$	306,367		4.50	%	N/A		N/A
Hanmi Bank	$	912,635		13.40	%	$	306,386		4.50	%	$	442,558		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	858,231		10.94	%	$	313,741		4.00	%	N/A		N/A
Hanmi Bank	$	912,635		11.71	%	$	311,803		4.00	%	$	389,754		5.00	%

December 31, 2025
Total capital (to risk-weighted assets):
Hanmi Financial	$	1,020,898		15.06	%	$	542,150		8.00	%	N/A		N/A
Hanmi Bank	$	965,543		14.25	%	$	542,197		8.00	%	$	677,747		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	838,150		12.37	%	$	406,612		6.00	%	N/A		N/A
Hanmi Bank	$	892,795		13.17	%	$	406,648		6.00	%	$	542,197		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	816,424		12.05	%	$	304,959		4.50	%	N/A		N/A
Hanmi Bank	$	892,795		13.17	%	$	304,986		4.50	%	$	440,535		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	838,150		10.70	%	$	313,270		4.00	%	N/A		N/A
Hanmi Bank	$	892,795		11.47	%	$	311,425		4.00	%	$	389,281		5.00	%

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are defined as follows:

•

Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•

Level 2 - Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

•

Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes.

We record securities available for sale at fair value on a recurring basis. Certain other assets, such as loans held for sale, impaired loans, and OREO are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments below:

Securities available for sale - The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges. If quoted prices are not available, fair values are measured using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curve, prepayment speeds, and default rates. Level 1 securities include U.S. Treasury securities that are traded on an active exchange or by dealers or brokers in active over-the-counter markets. The fair value of these securities is determined by quoted prices on an active exchange or over-the-counter market. Level 2 securities primarily include U.S. government agency and sponsored agency mortgage-backed securities, collateralized mortgage obligations and debt securities as well as municipal bonds in markets that are active. In determining the fair value of the securities categorized as Level 2, we obtain reports from nationally recognized broker-dealers detailing the fair value of each investment security held as of each reporting date. The broker-dealers use prices obtained from nationally recognized pricing services to value our fixed income securities. The fair value of the municipal securities is determined based on pricing data provided by nationally recognized pricing services. We review the prices obtained for reasonableness based on our understanding of the marketplace and consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. Level 3 securities are instruments that are not traded in the market. As such, no observable market data for the instrument is available, which necessitates the use of significant unobservable inputs.

Derivatives – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Loans held for sale - Loans held for sale includes the guaranteed portion of SBA 7(a) loans carried at the lower of cost or fair value. Management obtains quotes, bids or pricing indication sheets on all or part of the loans directly from the purchasing financial institutions. Premiums received or to be received on the quotes, bids or pricing indication sheets are indicative of the fact that cost is lower than fair value. At June 30, 2026 and December 31, 2025, the SBA 7(a) loans held for sale were recorded at its cost. We record SBA 7(a) loans held for sale at fair value on a nonrecurring basis with Level 2 inputs.

Nonperforming loans – Nonaccrual loans and loans 90 days past due and still accruing interest are considered nonperforming for reporting purposes. All nonperforming loans with a carrying balance over $250,000 are individually evaluated for the amount of impairment, if any. Nonperforming loans with a carrying balance of $250,000 or less are evaluated collectively. However, from time to time, nonrecurring fair value adjustments to collateral dependent nonperforming loans, for which repayment is expected to be obtained through the sale of the underlying collateral, are recorded based on either the current appraised value of the collateral, or management’s judgment, that are then adjusted based on recent market trends. When the fair value of the collateral is less than the book value, a valuation allowance is established to carry the loan at the fair value of the collateral, and results in a Level 3 measurement.

OREO - Fair value of OREO is based primarily on third party appraisals, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Appraisals are required annually and may be updated more frequently as circumstances require and the fair value adjustments are made to OREO based on the updated appraised value of the property.

Servicing assets - On a quarterly basis, the Company utilizes a third party service to evaluate servicing assets related to loans sold to unaffiliated parties with servicing retained, and result in a Level 3 classification. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date.

Other repossessed assets – Fair value of equipment from equipment financing agreements is based primarily on a third party valuation service, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Valuations are required at the time the asset is repossessed and may be subsequently updated periodically due to the Company’s short-term possession of the asset prior to sale or as circumstances require and the fair value adjustments are made to the asset based on its value prior to sale.

As of June 30, 2026 and December 31, 2025, assets and liabilities measured at fair value on a recurring basis are as follows:


	Level 1		Level 2		Level 3
			Significant
			Observable
	Quoted Prices in		Inputs with No
	Active Markets		Active Market		Significant
	for Identical		with Identical		Unobservable
	Assets		Characteristics		Inputs		Total Fair Value
	(in thousands)
June 30, 2026
Assets:
Securities available for sale:
U.S. Treasury securities	$	211,417	$	—	$	—	$	211,417
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		354,828		—		354,828
Mortgage-backed securities - commercial		—		62,200		—		62,200
Collateralized mortgage obligations		—		158,952		—		158,952
Debt securities		—		42,026		—		42,026
Total U.S. government agency and sponsored agency obligations		—		618,006		—		618,006
Municipal bonds-tax exempt		—		67,187		—		67,187
Total securities available for sale	$	211,417	$	685,193	$	—	$	896,610
Derivative financial instruments	$	—	$	2,410	$	—	$	2,410

Liabilities:
Derivative financial instruments	$	—	$	2,392	$	—	$	2,392

December 31, 2025
Assets:
Securities available for sale:
U.S. Treasury securities	$	128,710	$	—	$	—	$	128,710
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		373,408		—		373,408
Mortgage-backed securities - commercial		—		60,572		—		60,572
Collateralized mortgage obligations		—		183,955		—		183,955
Debt securities		—		65,954		—		65,954
Total U.S. government agency and sponsored agency obligations		—		683,889		—		683,889
Municipal bonds-tax exempt		—		68,025		—		68,025
Total securities available for sale	$	128,710	$	751,914	$	—	$	880,624
Derivative financial instruments	$	—	$	2,719	$	—	$	2,719

Liabilities:
Derivative financial instruments	$	—	$	2,568	$	—	$	2,568

As of June 30, 2026 and December 31, 2025, assets and liabilities measured at fair value on a non-recurring basis are as follows:


			Level 1		Level 2		Level 3
					Significant
					Observable
			Quoted Prices in		Inputs With No
			Active Markets		Active Market		Significant
			for Identical		With Identical		Unobservable
	Total		Assets		Characteristics		Inputs
	(in thousands)
June 30, 2026
Assets:
Repossessed personal property	$	284	$	—	$	—	$	284

December 31, 2025
Assets:
Collateral dependent loans (1)	$	12,539	$	—	$	—	$	12,539
Other real estate owned		1,980		—		—		1,980
Repossessed personal property		588		—		—		588

(1)

Consisted entirely of real estate loans.

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at June 30, 2026 and December 31, 2025:


	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
June 30, 2026
Repossessed personal property	$	284	Market approach	Adjustments to market data	N/A	(1)

December 31, 2025
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	596	Market approach	Adjustments to market data	(26)% to 20% / (8)%	(2)
Office		10,159	Market approach	Adjustments to market data	(26)% to (4)% / (14)%	(2)
Other		671	Market approach	Adjustments to market data	(6)% to 1% / (3)%	(2)
Residential		1,113	Market approach	Adjustments to market data	(13)% to 1% / (5)%	(2)
Total loans	$	12,539

Other real estate owned	$	1,980	Market approach	Adjustments to market data	(10)% to 5% / 0%	(2)

Repossessed personal property		588	Market approach	Adjustments to market data	N/A	(1)

(1)

The dollar amount of equipment collateral is typically too low in value to use a professional appraisal service. The values are determined internally using a combination of auction values, vendor recommendations and sales comparisons, depending on the equipment type. Some highly commoditized equipment, such as commercial trucks have services that provide industry values.

(2)

Appraisal reports utilize a combination of valuation techniques including a market approach, where prices and other relevant information generated by market transactions involving similar or comparable properties are used to determine the appraised value. Appraisals may include an ‘as is’ and ‘upon completion’ valuation scenarios. Adjustments are routinely made in the appraisal process by third-party appraisers to adjust for differences between the comparable sales and income data. Adjustments also result from the consideration of relevant economic and demographic factors with the potential to affect property values. Also, prospective values are based on the market conditions which exist

at the date of inspection combined with informed forecasts based on current trends in supply and demand for the property types under appraisal. Positive adjustments disclosed in this table represent increases to the sales comparison and negative adjustments represent decreases.

ASC 825, Financial Instruments, requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured on a recurring basis or non-recurring basis are discussed above.

The estimated fair value of financial instruments has been determined by using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825), among other provisions, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Other than certain financial instruments for which we had concluded that the carrying amounts approximate fair value, the fair value estimates shown below were based on an exit price notion as of June 30, 2026, as required by Topic 825. The financial instruments for which we had concluded that the carrying amounts approximate fair value include cash and due from banks, accrued interest receivable and payable, and noninterest-bearing deposits.

The estimated fair values of financial instruments were as follows:


	June 30, 2026
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	331,206	$	331,206	$	—	$	—
Securities available for sale		896,610		211,417		685,193		—
Loans held for sale		16,969		—		17,544		—
Loans, net of allowance for credit losses		6,464,837		—		—		6,506,036
Accrued interest receivable		24,613		24,613		—		—
Derivative financial instruments		2,410		—		2,410		—

Financial liabilities:
Interest-bearing deposits		4,819,924		—		—		4,816,852
Borrowings and subordinated debentures		130,773		—		—		132,249
Accrued interest payable		27,530		27,530		—		—
Derivative financial instruments		2,392		—		2,392		—


	December 31, 2025
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	212,841	$	212,841	$	—	$	—
Securities available for sale		880,624		128,710		751,914		—
Loans held for sale		7,403		—		7,715		—
Loans, net of allowance for credit losses		6,493,465		—		—		6,532,980
Accrued interest receivable		24,466		24,466		—		—
Derivative financial instruments		2,719		—		2,719		—

Financial liabilities:
Interest-bearing deposits		4,662,438		—		—		4,664,018
Borrowings and subordinated debentures		280,463		—		149,761		137,296
Accrued interest payable		34,783		34,783		—		—
Derivative financial instruments		2,568		—		2,568		—

The methods and assumptions used to estimate the fair value of each class of financial instruments for which it was practicable to estimate that value are explained below:

Cash and due from banks – The carrying amounts of cash and due from banks approximate fair value due to the short-term nature of these instruments (Level 1).

Securities – The fair value of securities, consisting of securities available for sale, is generally obtained from market bids for similar or identical securities, from independent securities brokers or dealers, or from other model-based valuation techniques described above (Level 1 and 2).

Loans held for sale – Loans held for sale are carried at the lower of aggregate cost or fair market value, as determined based upon quotes, bids or sales contract prices (Levels 1 and 2).

Loans, net of allowance for credit losses – The fair value of loans is estimated based on the discounted cash flow approach. To estimate the fair value of the loans, certain loan characteristics such as account types, remaining terms, annual interest rates or coupons, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan-to-value ratios, loss exposures, and remaining balances are considered. Additionally, the Company’s prior charge-off rates and loss ratios as well as various other assumptions relating to credit, interest, and prepayment risks are used as part of valuing the loan portfolio. Subsequently, the loans were individually evaluated by sorting and pooling them based on loan types, credit risk grades, and payment types. Consistent with the requirements of ASU 2016-01, the fair value of the Company’s loans is considered to be an exit price notion as of June 30, 2026 (Level 3).

The fair value of collateral dependent loans is estimated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company does not record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent loans are recorded based on the current appraised value of the collateral (Level 3).

Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value (Level 1).

Interest-bearing deposits – The fair value of interest-bearing deposits, such as savings accounts, money market checking, and certificates of deposit, is estimated based on discounted cash flows. The cash flows for non-maturity deposits, including savings accounts and money market checking, are estimated based on their historical decaying experiences. The discount rate used for fair valuation is based on interest rates currently being offered by the Bank on comparable deposits as to amount and term (Level 3).

Borrowings and subordinated debentures – Borrowings consist of FHLB advances, subordinated debentures and other borrowings. Discounted cash flows based on current market rates for borrowings with similar remaining maturities are used to estimate the fair value of borrowings (Level 2 and 3).

Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value (Level 1).

Note 12 — Off-Balance Sheet Commitments

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved with on-balance sheet items.

The Bank’s exposure to losses in the event of non-performance by the other party to commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for extending loan facilities to customers. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon an extension of credit, was based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, premises and equipment, and income-producing or borrower-occupied properties.

Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. As of June 30, 2026, the Bank was obligated on $180.0 million of letters of credit to the FHLB of San Francisco, which were being used as collateral for $180.0 million in public fund deposits from the State of California.

The following table shows the distribution of total loan commitments as of the dates indicated:


	June 30,		December 31,
	2026		2025
	(in thousands)
Unused commitments to extend credit	$	946,544	$	930,122
Standby letters of credit		205,160		163,071
Commercial letters of credit		17,706		5,761
Total commitments	$	1,169,410	$	1,098,954

The allowance for credit losses related to off-balance sheet items was maintained at a level believed to be sufficient to absorb current expected lifetime losses related to these unfunded credit facilities. The determination of the allowance adequacy was based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities.

Activity in the allowance for credit losses related to off-balance sheet items was as follows for the periods indicated:


	Three Months Ended June 30,					Six Months Ended June 30,
	2026			2025		2026			2025
	(in thousands)
Balance at beginning of period	$	2,078		$	2,399	$	2,349		$	2,074
Credit loss expense (recovery)		(85	)		107		(356	)		432
Balance at end of period	$	1,993		$	2,506	$	1,993		$	2,506

The Company enters into leases in the normal course of business primarily for bank branch offices, back-office operations locations, business development offices, information technology data centers and information technology equipment. At June 30, 2026, the Company’s leases had remaining terms ranging from one month to eight years, some of which include renewal or termination options to extend the lease for up to ten years.

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the consolidated balance sheets.

Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the term of the lease. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term.

As of June 30, 2026, the outstanding balances for our right-of-use asset and lease liability were $32.1 million and $36.1 million, respectively. As of December 31, 2025, the outstanding balances of the right-of-use asset and lease liability were $32.0 million and $36.0 million, respectively. The right-of-use asset is reported in prepaid expenses and other assets, and the lease liability is reported in accrued expenses and other liabilities on the consolidated balance sheets.

In determining the discount rates, since most of our leases do not provide an implicit rate, we used our incremental borrowing rate provided by the FHLB of San Francisco based on the information available at the commencement date to calculate the present value of lease payments.

At June 30, 2026, future minimum rental commitments under these non-cancelable operating leases, with initial or remaining terms of one year or more, were as follows:


	Amount
	(in thousands)
2026	$	4,175
2027		8,500
2028		7,993
2029		7,225
2030		5,473
Thereafter		6,573
Remaining lease commitments		39,939
Interest		(3,798	)
Present value of lease liability	$	36,141

Net lease expense recognized for the three months ended June 30, 2026 and 2025 was $2.4 million. Net lease expense recognized for the six months ended June 30, 2026 and 2025 was $4.7 million and $4.8 million, respectively. Sublease income was immaterial for both periods.

Weighted average remaining lease terms for the Company’s operating leases were 5.13 years and 5.59 years as of June 30, 2026 and December 31, 2025, respectively. Weighted average discount rates used for the Company’s operating leases were 3.88% and 3.85% as of June 30, 2026 and December 31, 2025, respectively.

Cash paid and included in cash flows from operating activities for amounts used in the measurement of the lease liability of the Company’s operating leases was $2.1 million and $2.2 million for the three months ended June 30, 2026 and 2025, respectively, and $4.2 million and $4.4 million for the six months ended June 30, 2026 and 2025, respectively.

Note 14 — Liquidity

Hanmi Financial

As of June 30, 2026, Hanmi Financial had $8.5 million in cash on deposit with its bank subsidiary and $46.4 million of U.S. Treasury securities at fair value. As of December 31, 2025, the Company had $8.8 million in cash on deposit with its bank subsidiary and $46.2 million of U.S. Treasury securities at fair value. Management believes that Hanmi Financial, on a stand-alone basis, had adequate liquid assets to meet its current debt obligations.

Hanmi Bank

The principal objective of our liquidity management program is to maintain the Bank’s ability to meet the day-to-day cash flow requirements of its customers who wish either to withdraw funds or to draw upon credit facilities to meet their cash needs. Management believes that the Bank, on a stand-alone basis, has adequate liquid assets to meet its current obligations. The Bank’s primary funding source are deposits originating from its branch platform. The Bank’s wholesale funds historically consisted of FHLB advances, brokered deposits, and State of California time deposits. As of June 30, 2026, the Bank had no outstanding FHLB advances. As of December 31, 2025, the Bank had $150.0 million of outstanding FHLB advances. The Bank had $86.9 million and $88.5 million of brokered deposits at June 30, 2026 and December 31, 2025, respectively, and $180.0 million and $150.0 million of State of California time deposits at June 30, 2026 and December 31, 2025, respectively.

We monitor the sources and uses of funds on a regular basis to maintain an acceptable liquidity position. The Bank’s primary source of borrowings is the FHLB, from which the Bank is eligible to borrow up to 30% of its assets. As of June 30, 2026 and December 31, 2025, the total borrowing capacity, based on pledged collateral was $1.62 billion and $1.76 billion, respectively, while the remaining available borrowing capacity was $1.44 billion and $1.46 billion, respectively.

The amount that the FHLB is willing to advance differs based on the quality and character of qualifying collateral pledged by the Bank, and the FHLB may adjust the advance rates for qualifying collateral upwards or downwards from time to time. To the extent deposit renewals and deposit growth are not sufficient to fund maturing and withdrawable deposits, repay maturing borrowings, fund existing and future loans, equipment financing agreements and securities, and otherwise fund working capital needs and capital expenditures, the Bank may utilize the remaining borrowing capacity from its FHLB borrowing arrangement.

As a means of augmenting its liquidity, the Bank also had an available borrowing source of $858.0 million from the Federal Reserve Bank of San Francisco Discount Window, to which the Bank pledged loans with a carrying value of $1.22 billion, with no borrowings outstanding as of June 30, 2026. At December 31, 2025, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window was $424.5 million on pledged loans with carrying values of $528.1 million, with no borrowings outstanding. The Bank maintains other sources of liquidity, including a line of credit for repurchase agreements up to $100.0 million and four unsecured federal funds lines of credit totaling $140.0 million. These sources had no outstanding balances as of June 30, 2026 or December 31, 2025.

Note 15 — Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Derivatives Designated as Hedging Instruments - Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets. During the fourth quarter of 2023, the Company entered into a $100.0 million notional interest rate swap designated as a cash flow hedge, with an effective date of May 1, 2024 and a maturity date of May 1, 2026, to hedge a pool of Prime rate-indexed loans against falling rates. During the first quarter of 2024, the Company entered into a $75.0 million notional interest rate swap designated as a cash flow hedge, with an effective date of May 1, 2024 and a maturity date of May 1, 2026, to hedge a pool of one-month SOFR-indexed loans against falling rates. Both interest rate swaps have matured, and there were no cash flow hedges of interest rate risk outstanding as of June 30, 2026.

For derivatives designated and that qualified as cash flow hedges of interest rate risk, the gain or loss on the derivative was recorded in accumulated other comprehensive income and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affected earnings. Management evaluated the effectiveness of the Company’s derivatives designated as cash flow hedges at inception and at the balance sheet dates during which they were outstanding and determined they were effective. Amounts reported in accumulated other comprehensive income related to derivatives were reclassified to interest income as interest payments were received on the Company’s variable-rate asset.

Derivatives Not Designated as Hedging Instruments

The Company also enters into interest rate swap agreements between the Company and its customers and other third-party counterparties. The Company enters into “back to back swap” arrangements whereby the Company executes interest rate swap agreements with its customers and acquires an offsetting swap position from a third-party counterparty. These derivative financial instruments are accounted for at fair value, with changes in fair value recognized in the Company’s consolidated statements of income.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of June 30, 2026 and December 31, 2025.


As of June 30, 2026	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	59,859	Other Assets	$	2,410	$	59,859	Other Liabilities	$	2,392
Total derivatives not designated as hedging instruments				$	2,410				$	2,392

As of December 31, 2025	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	61,350	Other Assets	$	2,579	$	61,350	Other Liabilities	$	2,568
Total derivatives not designated as hedging instruments				$	2,579				$	2,568

Derivatives designated as hedging instruments
Interest rate products	$	175,000	Other Assets	$	140	$	—	Other Liabilities	$	—
Total derivatives designated as hedging instruments				$	140				$	—

The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income for the three and six months ended June 30, 2026 and 2025.


Three Months Ended June 30, 2026
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest rate products (matured)	$	—		$	—		$	—	Interest Income	$	22		$	22		$	—
Total	$	—		$	—		$	—		$	22		$	22		$	—

Three Months Ended June 30, 2025
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest rate products	$	(234	)	$	(234	)	$	—	Interest Income	$	(248	)	$	(248	)	$	—
Total	$	(234	)	$	(234	)	$	—		$	(248	)	$	(248	)	$	—


Six Months Ended June 30, 2026
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest rate products (matured)	$	(57	)	$	(57	)	$	—	Interest Income	$	82		$	82		$	—
Total	$	(57	)	$	(57	)	$	—		$	82		$	82		$	—

Six Months Ended June 30, 2025
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest rate products	$	44		$	44		$	—	Interest Income	$	(493	)	$	(493	)	$	—
Total	$	44		$	44		$	—		$	(493	)	$	(493	)	$	—

The table below presents the effect of cash flow hedge accounting on the consolidated statements of income for the three and six months ended June 30, 2026 and 2025.


	Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationship
	Three Months Ended									Six Months Ended
	June 30,									June 30,
	2026				2025					2026				2025
	Interest Income		Interest Expense		Interest Income			Interest Expense		Interest Income		Interest Expense		Interest Income			Interest Expense
	(in thousands)
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income	$	22	$	—	$	(248	)	$	—	$	82	$	—	$	(493	)	$	—
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income - included component		22		—		(248	)		—		82		—		(493	)		—

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the three and six months ended June 30, 2026 and 2025.


Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended June 30,					Six Months Ended June 30,
		2026		2025			2026		2025
		(in thousands)
Interest rate products	Other income	$	3	$	(16	)	$	8	$	(31	)
Total		$	3	$	(16	)	$	8	$	(31	)

No fee income was recognized from the Company’s derivative financial instruments for the six months ended June 30, 2026 or 2025.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2026 and December 31, 2025. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The derivative assets are located within the prepaid and other assets line item on the consolidated balance sheets and the derivative liabilities are located within the accrued expenses and other liabilities line item on the consolidated balance sheets.


Offsetting of Derivative Assets
As of June 30, 2026
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	2,410	$	—	$	2,410	$	—	$	2,410	$	—


Offsetting of Derivative Liabilities
As of June 30, 2026
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	2,392	$	—	$	2,392	$	—	$	—	$	2,392


Offsetting of Derivative Assets
As of December 31, 2025
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	2,719	$	—	$	2,719	$	397	$	1,938	$	384


Offsetting of Derivative Liabilities
As of December 31, 2025
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	2,568	$	—	$	2,568	$	397	$	—	$	2,171

The Company has agreements with each of its derivative counterparties that contain a provision stating if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in

default on its derivative obligations. In addition, these agreements may also require the Company to post additional collateral should it fail to maintain its status as a well- or adequately- capitalized institution.

As of June 30, 2026 and December 31, 2025, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0. As of June 30, 2026 and December 31, 2025, no collateral was provided related to these agreements.

Note 16 — Segment Reporting

The Company has one reportable segment, Banking, as determined by the Chief Financial Officer, who is designated the chief operating decision maker, based upon information provided about the Company’s products and services offered, which are primarily banking operations. The Banking segment is also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business. The chief operating decision maker uses net interest income, net interest margin, non-interest income, non-interest expense, credit loss expense, and net income to assess performance and in the determination of allocating resources. These metrics, coupled with monitoring of budget to actual results, are used in assessing performance and in establishing compensation. Loans, investments, deposits, and non-interest revenue sources provide the revenues in our banking operations. Interest expense, provisions for credit losses, and salaries and benefits provide the significant expenses in our banking operations.

The following table presents information reported internally for performance assessment by the chief operating decision maker for the following periods:


	Banking Segment
	Three Months Ended June 30,
	2026		2025
	(in thousands)
Net interest income	$	63,857	$	57,139
Noninterest income		8,348		8,071
Segment revenues		72,205		65,210
Other revenues		—		—
Total consolidated revenues		72,205		65,210

Less:
Credit loss expense		1,186		7,631
Noninterest expenses		39,039		36,347
Income tax expense		8,475		6,115
Segment net income		23,505		15,117

Reconciliation of profit:
Adjustments and reconciling items		—		—
Consolidated net income	$	23,505	$	15,117


	Banking Segment
	Six Months Ended June 30,
	2026		2025
	(in thousands)
Net interest income	$	127,060	$	112,231
Noninterest income		16,887		15,796
Segment revenues		143,947		128,027
Other revenues		—		—
Total consolidated revenues		143,947		128,027

Less:
Credit loss expense		4,078		10,352
Noninterest expenses		77,407		71,330
Income tax expense		16,400		13,556
Segment net income		46,062		32,789

Reconciliation of profit:
Adjustments and reconciling items		—		—
Consolidated net income	$	46,062	$	32,789

	June 30,		December 31,
	2026		2025
	(in thousands)
Segment assets	$	8,001,473	$	7,869,185
Other assets		—		—
Consolidated assets	$	8,001,473	$	7,869,185

Note 17 — Subsequent Events

Issuance of Subordinated Notes

On July 30, 2026, the Company issued $55.0 million of Fixed-to-Floating Subordinated Notes that have a maturity date of July 31, 2036 and carry a fixed rate of interest of 6.50% for the first five years. Thereafter, the notes will pay interest at a floating rate, reset quarterly, equal to the then-current three-month Secured Overnight Financing Rate plus 234 basis points. The notes may be redeemed at the option of the Company, without penalty, on or after July 31, 2031, or earlier upon certain specified events. The notes have been structured to qualify as Tier 2 capital for regulatory purposes. On a pro forma basis, the issuance of the notes would have increased the Company’s total risk-based capital ratio at June 30, 2026 by 81 basis points, from 15.29% to 16.10%.

Redemption of Subordinated Notes

On July 30, 2026, the Company provided notice to the trustee to redeem all $110.0 million of its Fixed-to-Floating Subordinated Notes (“2031 Notes”) with a maturity date of September 1, 2031. The 2031 Notes have an initial fixed interest rate of 3.75% per annum, payable semiannually in arrears on March 1 and September 1 of each year, up to, but excluding, September 1, 2026. From and including September 1, 2026 and thereafter, the 2031 Notes will bear interest at a floating rate per annum equal to Three-Month Term SOFR plus 310 basis points, payable quarterly in arrears on March 1, June 1, September 1, and December 1 of each year. The redemption price for the 2031 Notes will equal 100% of the aggregate principal amount of the 2031 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date. The redemption is expected to occur on or about September 1, 2026. On a pro forma basis, the redemption of the 2031 Notes would have decreased the Company’s total risk-based capital ratio at June 30, 2026 by 161 basis points, from 15.29% to 13.68%, and would result in the recognition of the unamortized debt issuance costs associated with the 2031 Notes, which had a balance of $1.2 million at June 30, 2026.

On a pro forma basis, the combined impact of the issuance of the $55.0 million Fixed-to-Floating Subordinated Notes and the redemption of all $110.0 million of the 2031 Notes would have decreased the Company's total risk-based capital ratio at June 30, 2026 by 80 basis points, from 15.29% to 14.49%.

On July 23, 2026, the Company announced that the Board of Directors of the Company declared a quarterly cash dividend of $0.28 per share to be paid on August 19, 2026 to stockholders of record as of the close of business on August 3, 2026.

The following is management’s discussion and analysis of our results of operations and financial condition as of and for the three and six months ended June 30, 2026. This analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”) and with the unaudited consolidated financial statements and notes thereto set forth in this Quarterly Report on Form 10-Q for the period ended June 30, 2026 (this “Report”).

Some of the statements contained in this Report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this Report other than statements of historical fact are “forward–looking statements” for purposes of federal and state securities laws, including, but not limited to, statements about anticipated future operating and financial performance, financial condition and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital and strategic plans and other similar forecasts and statements of expectation and statements of assumptions underlying any of the foregoing. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, financial condition, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statements. These factors include the following:

•

a failure to maintain adequate levels of capital and liquidity to support our operations;

•

general economic and business conditions internationally, nationally and in those areas in which we operate, including any potential recessionary conditions;

•

volatility and deterioration in the credit and equity markets;

•

changes in investor sentiment or consumer spending, borrowing and savings habits;

•

availability of capital from private and government sources;

•

demographic changes;

•

competition for loans and deposits and failure to attract or retain loans and deposits;

•

inflation and fluctuations in interest rates that reduce our margins and yields, the fair value of financial instruments, the level of loan originations or prepayments on loans we have made and make, the level of loan sales and the cost we pay to retain and attract deposits and secure other types of funding;

•

our ability to enter new markets successfully and capitalize on growth opportunities;

•

the current or anticipated impact of military conflict, terrorism or other geopolitical events;

•

the effect of potential future supervisory action against us or Hanmi Bank and our ability to address any issues raised in our regulatory exams;

•

risks of natural disasters;

•

legal proceedings and litigation brought against us;

•

risks associated with cybersecurity threats, data breaches, ransomware attacks, or other failures in our operational or security systems and infrastructure, including the risks arising from our dependence on third-party service providers and vendors;

•

the failure to maintain current technologies;

•

risks associated with Small Business Administration loans;

•

failure to attract, develop, or retain key employees;

•

our ability to access cost-effective funding;

•

the imposition of tariffs or other domestic or international governmental policies, trade restrictions, and any retaliatory measures impacting our borrowers and the broader economy;

•

the impact of a potential federal government shutdown, which may impact on our ability to effect sales of Small Business Administration loans, debt ceiling impasses or fiscal uncertainty;

•

changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;

•

fluctuations in real estate values;

•

changes in accounting policies and practices;

•

changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;

•

the ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial tests;

•

strategic transactions we may enter into, including the costs associated with the evaluation of any strategic opportunities and the overall effects of any acquisitions or dispositions we may make;

•

the adequacy of and changes in the economic assumptions and methodology for computing our allowance for credit losses;

•

our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses;

•

changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements;

•

our ability to control expenses;

•

the inability of third-party service providers to perform their obligations to us; and

•

the ability of the Company to withstand disruptions that may be caused by any failure of the operational systems of third parties.

For additional information concerning risks we face, see “Part II, Item 1A. Risk Factors” in this Report and “Item 1A. Risk Factors” in Part I of the 2025 Annual Report on Form 10-K. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.

We have established various accounting policies that govern the application of GAAP in the preparation of our financial statements. Our significant accounting policies are described in the Notes to the consolidated financial statements in the 2025 Annual Report on Form 10-K. We had no significant changes in what constituted our accounting policies since the filing of the 2025 Annual Report on Form 10-K.

Certain accounting policies require us to make significant estimates and assumptions that have a material impact on the carrying value of certain assets and liabilities, and we consider these to be critical accounting policies. For a description of these critical accounting policies, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in the 2025 Annual Report on Form 10-K. Actual results could differ significantly from these estimates and assumptions, which could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods. Management has discussed the development and selection of these critical accounting policies with the Audit Committee of the Company’s Board of Directors.

Our primary source of revenue is net interest income, which is the difference between interest derived from assets, and interest paid on liabilities obtained to fund those assets. Our net interest income is affected by changes in the level and mix of interest-earning assets and interest-bearing liabilities, referred to as volume changes. Net interest income is also affected by changes in the yields earned on assets and rates paid on liabilities, referred to as rate changes. Interest rates charged on loans are affected principally by changes to market interest rates, the demand for loans, the supply of money available for lending purposes, and other competitive factors. Those factors are, in turn, affected by general economic conditions and other factors beyond our control, such as federal economic policies, the general supply of money in the economy, legislative tax policies, governmental budgetary matters, and the actions of the Federal Reserve.

The following table shows the average balance of assets, liabilities and stockholders’ equity; the amount of interest income, and interest expense; the average yield or rate for each category of interest-earning assets and interest-bearing liabilities; and the net interest spread and the net interest margin on a taxable-equivalent basis for the periods indicated. All average balances are daily average balances.


	Three Months Ended
	June 30, 2026								June 30, 2025
				Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate
Assets	(dollars in thousands)
Interest-earning assets:
Loans:
Commercial real estate (1)	$	3,986,661		$	57,244		5.76	%	$	3,978,350		$	56,385		5.68	%
Residential mortgage		1,001,859			13,511		5.39	%		990,135			13,254		5.37	%
Commercial and industrial (1)		1,065,744			17,467		6.57	%		818,498			15,206		7.45	%
Consumer		5,711			92		6.44	%		7,786			139		7.14	%
Equipment finance		381,878			6,494		6.80	%		462,972			7,605		6.57	%
Loans (1)		6,441,853			94,808		5.90	%		6,257,741			92,589		5.93	%
Securities (2)		950,786			6,337		2.69	%		993,975			6,261		2.55	%
FHLB stock		16,385			219		5.36	%		16,385			354		8.65	%
Interest-bearing deposits in other banks		221,361			1,958		3.55	%		200,266			2,129		4.26	%
Total interest-earning assets		7,630,385			103,322		5.43	%		7,468,367			101,333		5.44	%

Noninterest-earning assets:
Cash and due from banks		48,769								53,977
Allowance for credit losses		(70,249	)							(70,222	)
Other assets		255,426								250,241
Total assets	$	7,864,331							$	7,702,363

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	81,682		$	33		0.16	%	$	81,308		$	29		0.15	%
Money market and savings		2,056,148			13,540		2.64	%		2,109,221			17,342		3.30	%
Time deposits		2,646,480			24,201		3.67	%		2,434,659			24,553		4.05	%
Total interest-bearing deposits		4,784,310			37,774		3.17	%		4,625,188			41,924		3.64	%
Borrowings		15,330			154		4.06	%		60,134			684		4.58	%
Subordinated debentures		130,695			1,537		4.70	%		130,880			1,586		4.84	%
Total interest-bearing liabilities		4,930,335			39,465		3.21	%		4,816,202			44,194		3.68	%

Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,963,242								1,934,985
Other liabilities		120,896								140,053
Stockholders’ equity		849,858								811,123
Total liabilities and stockholders’ equity	$	7,864,331							$	7,702,363

Net interest income				$	63,857							$	57,139

Cost of deposits (3)							2.25	%							2.56	%
Net interest spread (taxable equivalent basis) (4)							2.22	%							1.76	%
Net interest margin (taxable equivalent basis) (5)							3.36	%							3.07	%

(1)

Loans include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans are included in the average loans balance.

(2)

Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

(3)

Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.

(4)

Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.

(5)

Represents net interest income as a percentage of average interest-earning assets.

The average balance of interest-earning assets increased $162.0 million, or 2.2%, to $7.63 billion for the three months ended June 30, 2026, from $7.47 billion for the three months ended June 30, 2025, primarily due to growth in the average balance of commercial and industrial loans. The average balance of interest-bearing liabilities increased $114.1 million, or 2.4%, to $4.93 billion for the three months ended June 30, 2026, compared with $4.82 billion for the three months ended June 30, 2025, primarily due to a higher average balance of time deposits.

Net interest margin, on a taxable equivalent basis, increased 29 basis points to 3.36% for the three months ended June 30, 2026, from 3.07% for the same period in 2025. This increase was primarily due to a decline in the cost of interest-bearing liabilities of 47 basis points to 3.21% for the three months ended June 30, 2026, from 3.68% for the same period in 2025, due to the decline in interest rates.

The table below shows changes in interest income and interest expense and the amounts attributable to variations in interest rates and volumes for the periods indicated. Simultaneous volume and rate effects have been allocated proportionally to the respective volume and rate variances based on their absolute dollar amounts.


	Three Months Ended June 30, 2026 vs. June 30, 2025
	Increases (Decreases) Due to Change In
	Volume			Rate			Total
	(in thousands)
Interest and dividend income:
Loans (1)	$	2,430		$	(211	)	$	2,219
Securities (2)		(275	)		351			76
FHLB stock		—			(135	)		(135	)
Interest-bearing deposits in other banks		224			(395	)		(171	)
Total interest and dividend income		2,379			(390	)		1,989

Interest expense:
Demand: interest-bearing	$	—		$	4		$	4
Money market and savings		(436	)		(3,366	)		(3,802	)
Time deposits		2,136			(2,488	)		(352	)
Borrowings		(510	)		(20	)		(530	)
Subordinated debentures		(2	)		(47	)		(49	)
Total interest expense		1,188			(5,917	)		(4,729	)
Change in net interest income	$	1,191		$	5,527		$	6,718

(1)

Loans include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans are included in the average loans balance.

(2)

Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

Net interest income for the three months ended June 30, 2026 and 2025 was $63.9 million and $57.1 million, respectively, reflecting an increase of $6.8 million, or 11.8%. This increase was primarily due to a $5.9 million effect from a decrease in interest rates on liabilities and a $2.4 million effect from an increase in the average balance of loans, partially offset by a $1.2 million effect from an increase in the average balance of interest-bearing liabilities.

The $5.9 million impact from the decrease in interest rates on liabilities was primarily driven by money market and savings accounts and time deposits, which increased net interest income by $3.4 million and $2.5 million, respectively, for the three months ended June 30, 2026, compared with the same period in 2025. The $2.4 million volume-driven increase in interest income on loans was primarily due to a higher average balance of commercial and industrial loans, partially offset by a decline in the average balance of equipment financing agreements. The $1.2 million offsetting increase in interest expense was primarily due to the $2.1 million impact of a higher average balance of time deposits, partially offset by a lower average balance of money market and savings accounts and borrowings.

The following table shows the average balance of assets, liabilities and stockholders’ equity; the amount of interest income and interest expense; the average yield or rate for each category of interest-earning assets and interest-bearing liabilities; and the net interest spread and the net interest margin on a taxable-equivalent basis for the periods indicated. All average balances are daily average balances.


	Six Months Ended
	June 30, 2026								June 30, 2025
				Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate
Assets	(dollars in thousands)
Interest-earning assets:
Loans:
Commercial real estate (1)	$	3,975,480		$	113,080		5.74	%	$	3,958,335		$	111,248		5.67	%
Residential mortgage		1,018,800			27,547		5.41	%		975,579			26,004		5.38	%
Commercial and industrial (1)		1,045,045			34,437		6.65	%		808,069			30,458		7.60	%
Consumer		5,504			175		6.42	%		7,343			257		7.08	%
Equipment finance		393,276			13,435		6.83	%		474,499			15,509		6.54	%
Loans (1)		6,438,105			188,674		5.90	%		6,223,825			183,476		5.94	%
Securities (2)		936,007			12,296		2.66	%		997,716			12,430		2.52	%
FHLB stock		16,385			1,050		12.92	%		16,385			715		8.79	%
Interest-bearing deposits in other banks		196,794			3,454		3.54	%		188,214			3,968		4.25	%
Total interest-earning assets		7,587,291			205,474		5.45	%		7,426,140			200,589		5.44	%

Noninterest-earning assets:
Cash and due from banks		50,707								53,824
Allowance for credit losses		(69,769	)							(69,936	)
Other assets		251,621								249,697
Total assets	$	7,819,850							$	7,659,725

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	78,341		$	61		0.16	%	$	80,344		$	56		0.14	%
Money market and savings		2,059,647			26,622		2.61	%		2,073,421			33,779		3.29	%
Time deposits		2,584,835			47,829		3.73	%		2,390,249			48,648		4.10	%
Total interest-bearing deposits		4,722,823			74,512		3.18	%		4,544,014			82,483		3.66	%
Borrowings		42,210			830		3.96	%		119,460			2,708		4.57	%
Subordinated debentures		130,619			3,072		4.70	%		130,799			3,167		4.84	%
Total interest-bearing liabilities		4,895,652			78,414		3.23	%		4,794,273			88,358		3.72	%

Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,950,506								1,915,577
Other liabilities		127,488								142,341
Stockholders’ equity		846,204								807,534
Total liabilities and stockholders’ equity	$	7,819,850							$	7,659,725

Net interest income				$	127,060							$	112,231

Cost of deposits (3)							2.25	%							2.58	%
Net interest spread (taxable equivalent basis) (4)							2.22	%							1.73	%
Net interest margin (taxable equivalent basis) (5)							3.37	%							3.05	%

(1)

Loans include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans are included in the average loans balance.

(2)

Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

(3)

Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.

(4)

Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.

(5)

Represents net interest income as a percentage of average interest-earning assets.

The average balance of interest-earning assets increased $161.2 million, or 2.2%, to $7.59 billion for the six months ended June 30, 2026, from $7.43 billion for the six months ended June 30, 2025, primarily due to growth in the average balance of commercial and industrial loans. The average balance of interest-bearing liabilities increased $101.4 million, or 2.1%, to $4.90 billion for the six months ended June 30, 2026, compared with $4.79 billion for the six months ended June 30, 2025, primarily due to a higher average balance of time deposits.

Net interest margin, on a taxable equivalent basis, increased 32 basis points to 3.37% for the six months ended June 30, 2026, from 3.05% for the same period in 2025. This increase was primarily due to a decline in the cost of interest-bearing liabilities of 49 basis points to 3.23% for the six months ended June 30, 2026, from 3.72% for the same period in 2025, due to the decline in interest rates.


	Six Months Ended June 30, 2026 vs. June 30, 2025
	Increases (Decreases) Due to Change In
	Volume			Rate			Total
	(in thousands)
Interest and dividend income:
Loans (1)	$	6,013		$	(815	)	$	5,198
Securities (2)		(777	)		643			(134	)
FHLB stock		—			336			336
Interest-bearing deposits in other banks		181			(696	)		(515	)
Total interest and dividend income		5,417			(532	)		4,885

Interest expense:
Demand: interest-bearing	$	(1	)	$	6		$	5
Money market and savings		(224	)		(6,933	)		(7,157	)
Time deposits		3,960			(4,779	)		(819	)
Borrowings		(1,753	)		(125	)		(1,878	)
Subordinated debentures		(4	)		(91	)		(95	)
Total interest expense		1,978			(11,922	)		(9,944	)
Change in net interest income	$	3,439		$	11,390		$	14,829

(1)

Loans include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans are included in the average loans balance.

(2)

Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

Net interest income for the six months ended June 30, 2026 and 2025 was $127.1 million and $112.2 million, respectively, reflecting an increase of $14.9 million, or 13.2%. This increase was primarily due to an $11.9 million effect from a decrease in interest rates on liabilities and a $5.4 million effect from an increase in the average balance of loans, partially offset by a $2.0 million impact from an increase in the average balance of interest-bearing liabilities.

The $11.9 million effect from the decrease in interest rates on liabilities was primarily driven by money market and savings accounts and time deposits, which increased net interest income by $6.9 million and $4.8 million, respectively, for the six months ended June 30, 2026, compared with the same period in 2025. The $5.4 million volume-driven increase in interest income on loans was primarily due to a higher average balance of commercial and industrial loans, partially offset by a decline in the average balance of equipment financing agreements. The $2.0 million offsetting increase in interest expense was primarily due to a $4.0 million impact of a higher average balance of time deposits, partially offset by a lower average balance of borrowings.

For the second quarter of 2026, the Company recorded $1.2 million of credit loss expense, comprising a $1.3 million provision for loan losses and a $0.1 million recovery for off-balance sheet items. For the same period in 2025, the Company recorded $7.6 million of credit loss expense, comprising a $7.5 million provision for loan losses and a $0.1 million provision for off-balance sheet items. The $6.2 million decrease in the provision for loan losses was primarily due to lower net charge-offs. Net charge-offs for the three months ended June 30, 2026 were $1.3 million, $10.1 million lower than the $11.4 million recognized for the three months ended June 30, 2025. Charge-offs for the three months ended June 30, 2025 included an $8.6 million charge-off of a syndicated commercial real estate office loan.

For the six months ended June 30, 2026, the Company recorded $4.1 million of credit loss expense, comprising a $4.4 million provision for loan losses and a $0.3 million recovery for off-balance sheet items. For the same period in 2025, the Company recorded $10.4 million of credit loss expense, comprising a $9.9 million provision for loan losses and a $0.5 million provision for off-balance sheet items. The $5.5 million decrease in the provision for loan losses was primarily due to lower net charge-offs. Charge-offs for the six months ended June 30, 2025 included the previously mentioned $8.6 million charge-off.

See also “Allowance for Credit Losses and Allowance for Credit Losses Related to Off-Balance Sheet Items” for further details.

The following table sets forth the various components of noninterest income for the periods indicated:


	Three Months Ended June 30,				Increase (Decrease)			Increase (Decrease)
	2026		2025		Amount			Percent
	(dollars in thousands)
Service charges on deposit accounts	$	2,102	$	2,169	$	(67	)		(3.09	)%
Trade finance and other service charges and fees		1,902		1,461		441			30.18
Servicing income		955		754		201			26.66
Bank-owned life insurance income		799		708		91			12.85
All other operating income		915		819		96			11.72
Service charges, fees & other		6,673		5,911		762			12.89
Gain on sale of SBA loans		1,318		2,160		(842	)		(38.98	)
Gain on sale of residential mortgage loans		357		—		357			—
Total noninterest income	$	8,348	$	8,071	$	277			3.43	%

For the three months ended June 30, 2026, noninterest income was $8.3 million, an increase of $0.2 million compared with noninterest income of $8.1 million for the three months ended June 30, 2025. The increase was due to a $0.4 million increase in gain on the sale of residential mortgage loans, a $0.4 million increase in trade finance and other service charges and fees due to a higher balance of outstanding letters of credit, and a $0.2 million increase in loan servicing income because of a decline in prepayments. Partially offsetting these increases to noninterest income was a $0.8 million decline in gain on sales of SBA loans, due to a lower volume of loans sold.

During the three months ended June 30, 2026, the Company sold $20.9 million of SBA loans, recognizing a net gain of $1.3 million and trade premiums of 7.88%, compared with $35.4 million of SBA loans sold for a net gain of $2.2 million and trade premiums of 7.61% for the three months ended June 30, 2025. The Company sold $30.6 million of residential mortgage loans for a net gain of $0.4 million and trade premiums of 2.00% for the three months ended June 30, 2026. There were no residential loan sales for the three months ended June 30, 2025.


	Six Months Ended June 30,				Increase (Decrease)			Increase (Decrease)
	2026		2025		Amount			Percent
	(dollars in thousands)
Service charges on deposit accounts	$	4,229	$	4,387	$	(158	)		(3.60	)%
Trade finance and other service charges and fees		3,403		2,858		545			19.07
Servicing income		1,825		1,486		339			22.81
Bank-owned life insurance income		1,409		1,017		392			38.54
All other operating income		1,758		1,712		46			2.69
Service charges, fees & other		12,624		11,460		1,164			10.16
Gain on sale of SBA loans		3,421		4,161		(740	)		(17.78	)
Gain on sale of residential mortgage loans		842		175		667			381.14
Total noninterest income	$	16,887	$	15,796	$	1,091			6.91	%

For the six months ended June 30, 2026, noninterest income was $16.9 million, an increase of $1.1 million compared with noninterest income of $15.8 million for the six months ended June 30, 2025. The increase was due to a $0.7 million increase in gain on the sale of residential mortgage loans due to a higher volume of loans sold, a $0.5 million increase in trade finance and other service charges and fees, a $0.4 million increase in bank-owned life insurance income due to higher death benefit proceeds, and a $0.3 million increase in loan servicing income because of lower prepayments. Partially offsetting these increases to noninterest income was a $0.7 million decline in gain on sales of SBA loans due to a lower volume of loans sold.

During the six months ended June 30, 2026, the Company sold $53.5 million of SBA loans, recognizing a net gain of $3.4 million and trade premiums of 7.89%, compared with $67.6 million of SBA loans sold for a net gain of $4.2 million and trade premiums of 7.71% for the six months ended June 30, 2025. The Company sold $62.3 million of residential mortgage loans for a net gain of $0.8 million and trade premiums of 2.25% for the six months ended June 30, 2026, compared with $10.0 million of residential mortgage loans sold for a net gain of $0.2 million and trade premiums of 2.50% for the six months ended June 30, 2025.

The following table sets forth the components of noninterest expense for the periods indicated:


	Three Months Ended June 30,					Increase (Decrease)			Increase (Decrease)
	2026		2025			Amount			Percent
	(dollars in thousands)
Salaries and employee benefits	$	22,784	$	22,069		$	715			3.24	%
Occupancy and equipment		4,383		4,344			39			0.90
Data processing		4,555		3,727			828			22.22
Professional fees		1,997		1,725			272			15.77
Supplies and communications		491		515			(24	)		(4.66	)
Advertising and promotion		679		798			(119	)		(14.91	)
All other operating expenses		4,103		3,567			536			15.03
Subtotal		38,992		36,745			2,247			6.12
Other real estate owned expense (income)		6		(461	)		467			(101.30	)
Repossessed personal property expense		41		63			(22	)		(34.92	)
Total noninterest expense	$	39,039	$	36,347		$	2,692			7.41	%

For the three months ended June 30, 2026, noninterest expense was $39.0 million, an increase of $2.7 million, or 7.4%, compared with $36.3 million for the same period in 2025. The increase was mainly attributed to a $0.8 million increase in data processing expense, a $0.7 million increase in salaries and employee benefits, a $0.5 million increase in all other operating expenses, and a $0.5 million increase in other-real-estate-owned expense.

The increase in data processing expense was primarily due to higher license and maintenance costs due to higher transaction volumes and increased vendor pricing. The increase in salaries and employee benefits was primarily due higher wages paid as a result of annual merit increases. The increase in all other operating expenses was primarily due to the resolution of an administrative matter. The increase in OREO expense was due to the absence of the 2025 second-quarter gain on the sale of an OREO property.


	Six Months Ended June 30,						Increase (Decrease)			Increase (Decrease)
	2026			2025			Amount			Percent
	(dollars in thousands)
Salaries and employee benefits	$	44,740		$	43,041		$	1,699			3.95	%
Occupancy and equipment		8,797			8,794			3			0.03
Data processing		8,941			7,514			1,427			18.99
Professional fees		4,777			3,194			1,583			49.56
Supplies and communications		1,047			1,031			16			1.55
Advertising and promotion		1,368			1,382			(14	)		(1.01	)
All other operating expenses		7,951			6,742			1,209			17.93
Subtotal		77,621			71,698			5,923			8.26
Other real estate owned income		(339	)		(420	)		81			(19.29	)
Repossessed personal property expense		125			52			73			140.38
Total noninterest expense	$	77,407		$	71,330		$	6,077			8.52	%

For the six months ended June 30, 2026, noninterest expense was $77.4 million, an increase of $6.1 million, or 8.5%, compared with $71.3 million for the same period in 2025. The increase was mainly attributed to a $1.7 million increase in salaries and employee benefits, a $1.6 million increase in professional fees, a $1.4 million increase in data processing expense, and a $1.2 million increase in all other operating expenses.

The increase in salaries and employee benefits was due primarily to higher employee wages due to annual merit increases, which resulted in higher payroll taxes and higher 401(k) expense. The increase in professional fees was due to higher legal and consulting fees. The increase in data processing expense was due to higher license and maintenance expense, as well as higher transaction volumes. The increase in all other operating expenses was primarily due to the resolution of administrative matters, as well as higher loan-related expense due to the payment of delinquent property taxes on a nonaccrual loan.

Income tax expense was $8.5 million and $6.1 million, representing effective income tax rates of 26.5% and 28.8% for the three months ended June 30, 2026 and 2025, respectively. Income tax expense for the six months ended June 30, 2026 and 2025 was $16.4 million and $13.6 million, respectively, representing effective tax rates of 26.3% and 29.3%, respectively. The lower effective tax rate for the three and six months ended June 30, 2026 reflects the tax benefit arising from the first-quarter vesting of performance stock units, as well as a favorable change in the State of California's apportionment calculation.

As of June 30, 2026, our securities portfolio consisted of U.S. government agency and sponsored agency mortgage-backed securities, collateralized mortgage obligations and debt securities, tax-exempt municipal bonds and U.S. Treasury securities. Most of these securities carry fixed interest rates. Other than holdings of U.S. government agency and sponsored agency obligations, there were no securities of any one issuer exceeding 10% of stockholders’ equity as of June 30, 2026 or December 31, 2025.

Securities increased $16.0 million to $896.6 million at June 30, 2026 from $880.6 million at December 31, 2025, mainly attributed to $169.1 million in purchases (primarily U.S. Treasury securities), partially offset by $147.8 million in maturities and principal paydown.

The following table summarizes the contractual or expected maturity schedule for securities, at amortized cost, and their cost-weighted average yield, as of June 30, 2026:


						After One Year But					After Five Years But
	Within One Year					Within Five Years					Within Ten Years					After Ten Years					Total
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
	(dollars in thousands)
Securities available for sale:
U.S. Treasury securities	$	149,852		3.66	%	$	62,026		3.90	%	$	—		0.00	%	$	—		0.00	%	$	211,878		3.73	%
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		—			1,700		3.27			207,660		1.38			185,360		2.81			394,720		2.06
Mortgage-backed securities - commercial		—		—			2,968		3.40			3,336		4.20			67,548		2.53			73,852		2.64
Collateralized mortgage obligations		261		5.08			19,799		2.91			3,557		1.71			141,114		4.39			164,731		4.15
Debt securities		32,565		1.10			10,000		4.10			—		—			—		—			42,565		1.80
Total U.S. government agency and sponsored agency obligations		32,826		1.13			34,467		3.31			214,553		1.43			394,022		3.33			675,868		2.62
Municipal bonds-tax exempt		—		—			—		—			72,374		1.33			2,135		1.70			74,509		1.34
Total securities available for sale	$	182,678		3.21	%	$	96,493		3.69	%	$	286,927		1.40	%	$	396,157		3.32	%	$	962,255		2.76	%

As of June 30, 2026 and December 31, 2025, loans (excluding loans held for sale), net of deferred loan fees and costs, discounts and the allowance for credit losses, were $6.46 billion and $6.49 billion, respectively. For the six months ended June 30, 2026, there was $749.8 million in new loan production, offset by $474.8 million in loan sales and payoffs, and amortization and other reductions of $303.1 million. Loan production consisted of commercial real estate loans of $301.5 million, residential mortgage loans of $79.1 million, commercial and industrial loans of $223.9 million, equipment financing agreements of $67.5 million and SBA loans of $77.8 million.

The table below shows the maturity distribution of outstanding loans, before the allowance for credit losses as of June 30, 2026. In addition, the table shows the distribution of such loans between those with floating or variable interest rates and those with fixed or predetermined interest rates.


	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	267,688	$	399,694	$	333,039	$	109,060	$	83,696	$	1,193,177
Hospitality		234,760		268,342		311,275		25,414		18,826		858,617
Office		208,718		204,704		43,908		12,245		9,535		479,110
Other		325,343		510,281		530,015		72,935		39,085		1,477,659
Total commercial property loans		1,036,509		1,383,021		1,218,237		219,654		151,142		4,008,563
Construction		13,757		—		—		—		—		13,757
Residential		4,656		70		482		8,963		964,710		978,881
Total real estate loans		1,054,922		1,383,091		1,218,719		228,617		1,115,852		5,001,201
Commercial and industrial loans		426,059		236,414		275,700		232,751		348		1,171,272
Equipment financing agreements		36,071		166,302		145,404		15,062		—		362,839
Total loans	$	1,517,052	$	1,785,807	$	1,639,823	$	476,430	$	1,116,200	$	6,535,312
Loans with predetermined interest rates		974,785		805,319		724,918		38,674		253,651		2,797,347
Loans with variable interest rates		542,267		980,488		914,905		437,756		862,549		3,737,965

The table below shows the maturity distribution of outstanding loans, before the allowance for credit losses, with fixed or predetermined interest rates, as of June 30, 2026.


	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	217,152	$	163,609	$	226,376	$	10	$	429	$	607,576
Hospitality		175,037		94,365		55,016		11,581		—		335,999
Office		168,732		157,371		34,976		—		—		361,079
Other		224,323		216,069		252,051		5,583		3,657		701,683
Total commercial property loans		785,244		631,414		568,419		17,174		4,086		2,006,337
Construction		—		—		—		—		—		—
Residential		1,351		—		345		5,312		249,565		256,573
Total real estate loans		786,595		631,414		568,764		22,486		253,651		2,262,910
Commercial and industrial loans		152,119		7,603		10,750		1,126		—		171,598
Equipment financing agreements		36,071		166,302		145,404		15,062		—		362,839
Total loans	$	974,785	$	805,319	$	724,918	$	38,674	$	253,651	$	2,797,347

The table below shows the maturity distribution of outstanding loans, before the allowance for credit losses, with floating or variable interest rates (including floating, adjustable and hybrids), as of June 30, 2026.


	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	50,536	$	236,085	$	106,663	$	109,050	$	83,267	$	585,601
Hospitality		59,723		173,977		256,259		13,833		18,826		522,618
Office		39,986		47,333		8,932		12,245		9,535		118,031
Other		101,020		294,212		277,964		67,352		35,428		775,976
Total commercial property loans		251,265		751,607		649,818		202,480		147,056		2,002,226
Construction		13,757		—		—		—		—		13,757
Residential		3,305		70		137		3,651		715,145		722,308
Total real estate loans		268,327		751,677		649,955		206,131		862,201		2,738,291
Commercial and industrial loans		273,940		228,811		264,950		231,625		348		999,674
Total loans	$	542,267	$	980,488	$	914,905	$	437,756	$	862,549	$	3,737,965

As of June 30, 2026, the loan portfolio included the following concentrations of loan types to borrowers in industries that represented greater than 10.0% of loans outstanding:


			Percentage of
	Balance as of		Loans Receivable
	June 30, 2026		Outstanding
	(in millions)
Lessor of nonresidential buildings	$	1,594,100		24.4	%
Hospitality		854,370		13.1	%

Criticized Loans

Activity in criticized loans was as follows for the periods indicated:


	Three Months Ended June 30,
	2026			2025
	(in thousands)
Special Mention
Downgrades from pass loans	$	—		$	300
Reductions:
Upgrades to pass loans		(1,355	)		(105,779	)
Downgrades to classified loans		(23,656	)		—
Payoffs and paydowns		(473	)		(201	)
Increase (decrease)		(25,484	)		(105,680	)
Balance at beginning of period		93,682			118,380
Balance at end of period	$	68,198		$	12,700

Classified
Downgrades	$	28,604		$	4,769
Reductions:
Upgrades		(29	)		(4,069	)
Payoffs and paydowns		(837	)		(1,759	)
Charge-offs		(1,551	)		(11,603	)
Note sale		(3,175	)		—
Increase (decrease)		23,012			(12,662	)
Balance at beginning of period		22,736			46,519
Balance at end of period	$	45,748		$	33,857


	Six Months Ended June 30,
	2026			2025
	(in thousands)
Special Mention
Downgrades from pass loans	$	23,206		$	448
Reductions:
Upgrades to pass loans		(1,355	)		(126,281	)
Downgrades to classified loans		(23,759	)		—
Payoffs and paydowns		(966	)		(1,080	)
Charge-offs		(41	)		—
Increase (decrease)		(2,915	)		(126,913	)
Balance at beginning of period		71,113			139,613
Balance at end of period	$	68,198		$	12,700

Classified
Downgrades	$	38,220		$	30,938
Reductions:
Upgrades		(29	)		(4,257	)
Payoffs and paydowns		(11,728	)		(3,865	)
Charge-offs		(3,431	)		(14,642	)
Note Sale		(3,175	)		—
Increase (decrease)		19,857			8,174
Balance at beginning of period		25,891			25,683
Balance at end of period	$	45,748		$	33,857

Special mention loans were $68.2 million and $71.1 million at June 30, 2026 and December 31, 2025, respectively. The $2.9 million decrease in the six months ended June 30, 2026 included the upgrade of $1.4 million of loans to the pass category and $1.0 million of paydowns and payoffs.

Classified loans were $45.7 million and $25.9 million at June 30, 2026 and December 31, 2025, respectively. The $19.8 million increase for the six months ended June 30, 2026 resulted from additions of $38.2 million and reductions of $18.4 million. Additions included the downgrade of a $21.2 million commercial real estate loan in the retail industry, which had been downgraded from the pass category to special mention during the 2026 first quarter, and further downgraded to classified during the 2026 second quarter. Additions also included the downgrade of a $5.0 million commercial real estate loan in the hospitality industry, which was modified during the first quarter of 2026 to allow for temporary interest-only payments, as well as the downgrade of a $3.1 million commercial real estate loan secured by an industrial property and $3.8 million of equipment finance agreements.

Reductions of $18.4 million included a $9.7 million payment on a commercial real estate office loan that had a balance of $10.2 million at December 31, 2025, as well as the sale of a $3.2 million commercial real estate loan and $3.4 million of charge-offs.

Nonperforming Assets

Loans 30 to 89 days past due and still accruing were $32.8 million at June 30, 2026, compared with $19.9 million at December 31, 2025. The increase of $12.9 million includes a $21.1 million commercial real estate loan that became delinquent during the three months ended June 30, 2026, partially offset by $9.9 million of loans that became current during the six months ended June 30, 2026. There were no loans 90 or more days past due and still accruing at June 30, 2026 or December 31, 2025.

Nonperforming loans consist of nonaccrual loans and loans 90 days or more past due and still accruing interest. Nonperforming assets consist of nonperforming loans and OREO. Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless we believe the loan is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s delinquency. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest become current and full repayment is expected, which generally occurs after sustained payment of six months. Interest income is recognized on the accrual basis for loans not meeting the criteria for nonaccrual. OREO consists of properties acquired by foreclosure or similar means.

Except for nonaccrual loans, management is not aware of any other loans as of June 30, 2026 for which known credit problems of the borrower would cause serious doubts as to the ability of such borrowers to comply with their present loan repayment terms, or any known events that would result in a loan being designated as nonperforming at some future date.

Activity in nonperforming loans was as follows for the periods indicated:


	Three Months Ended June 30,
	2026			2025
	(in thousands)
Nonperforming Loans
Additions:
Downgrades	$	2,938		$	4,564
Reductions:
Upgrades		(66	)		(1,011	)
Charge-offs		(1,477	)		(11,580	)
Payoffs and paydowns		(709	)		(1,577	)
Note sale		(3,175	)		—
Increase (decrease)		(2,489	)		(9,604	)
Balance at beginning of period		12,420			35,571
Balance at end of period	$	9,931		$	25,967


	Six Months Ended June 30,
	2026			2025
	(in thousands)
Nonperforming Loans
Additions:
Downgrades	$	9,944		$	30,759
Reductions:
Upgrades		(66	)		(1,180	)
Charge-offs		(3,357	)		(14,541	)
Payoffs and paydowns		(11,527	)		(3,343	)
Note sale		(3,175	)		—
Increase (decrease)		(8,181	)		11,695
Balance at beginning of period		18,112			14,272
Balance at end of period	$	9,931		$	25,967

Nonperforming loans were $9.9 million and $18.1 million as of June 30, 2026 and December 31, 2025, respectively, representing a decrease of $8.2 million, or 45.2%. The decrease was primarily due to a $9.7 million payment received during the three months ended March 31, 2026 on a commercial real estate office loan that was designated as nonaccrual during the first quarter of 2025. As of June 30, 2026 and December 31, 2025, 1.2% and 1.3% of equipment financing agreements were on nonaccrual status, respectively. At June 30, 2026 and December 31, 2025, there were no loans 90 days or more past due and still accruing interest.

The $9.9 million of nonperforming loans as of June 30, 2026 had specific allowances of $2.6 million, compared with $18.1 million of nonperforming loans with specific allowances of $3.4 million as of December 31, 2025.

Nonperforming assets were $9.9 million at June 30, 2026, or 0.12% of total assets, compared to $20.1 million, or 0.26% of total assets, at December 31, 2025. Excluded from nonperforming assets is repossessed personal property associated with equipment finance agreements of $0.3 million and $0.6 million at June 30, 2026 and December 31, 2025, respectively.

Individually Evaluated Loans

The Company reviews loans on an individual basis when the loan does not share similar risk characteristics with loan pools. Individually evaluated loans are measured for expected credit losses based on the present value of expected cash flows discounted at the effective interest rate, the observable market price, or the fair value of collateral.

Individually evaluated loans were $9.9 million and $18.1 million as of June 30, 2026 and December 31, 2025, respectively, representing a decrease of $8.2 million, or 45.3%. Specific allowances associated with individually evaluated loans decreased $0.8 million to $2.6 million as of June 30, 2026, compared with $3.4 million as of December 31, 2025.

Loan Modifications to Borrowers Experiencing Financial Difficulty

A borrower is experiencing financial difficulties when there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. The Company may modify loans to borrowers experiencing financial difficulties by providing principal forgiveness, a term extension, an other-than-insignificant payment delay, or an interest rate reduction.

The following table presents loan modifications made to borrowers experiencing financial difficulty by type of modification, with related amortized cost balances, respective percentage shares of the total class of loans, and the related financial effect, as of the period indicated:


	Interest Only/Principal Deferment
	Amortized Cost Basis		% of Total Class of Loans			Financial Effect
	(in thousands)
Six months ended June 30, 2026
Commercial and industrial loans	$	4,998		0.4	%	One loan with 12-month
						interest-only modification

No loans were modified to borrowers experiencing financial difficulty during the three months ended June 30, 2026 or during the six months ended June 30, 2025.

Allowance for Credit Losses and Allowance for Credit Losses Related to Off-Balance Sheet Items

The Company’s estimate of the allowance for credit losses at June 30, 2026 and December 31, 2025 reflected losses expected over the remaining contractual life of assets based on historical, current, and forward-looking information. The contractual life does not consider extensions, renewals or modifications.

Our allowance for credit losses incorporate a variety of risk considerations, both quantitative and qualitative, that management believes is appropriate to absorb lifetime credit losses at each reporting date. Quantitative factors include the general economic forecast in our markets, risk ratings, delinquency trends, collateral values, changes in nonperforming, criticized and classified loans, and other factors.

We use qualitative factors to adjust the allowance calculation for risks not considered by the quantitative calculations. Qualitative factors considered in our methodologies include concentrations of credit, changes in lending management and staff, and quality of the loan review system.

The Company reviews baseline and alternative economic scenarios from Moody’s (previously known as Moody’s Analytics, a subsidiary of Moody’s Corporation) for consideration in the quantitative portion of our analysis of the allowance for credit losses. Moody’s publishes a baseline forecast that represents the estimate of the most likely path for the United States economy through the current business cycle (50% probability that economic conditions will be worse and 50% probability that economic conditions will be better) as well as alternative scenarios to examine how different types of shocks will affect the future performance of the United States economy.

The Company utilizes a midpoint approach of multiple forward-looking scenarios to incorporate losses from a baseline, upside (stronger near-term growth) and downside (slower near-term growth) economy. As a result, the upside and downside scenarios each receive a weight of 30%, and the baseline receives a weight of 40%.

Certain quantitative and qualitative factors used to estimate credit losses and establish an allowance for credit losses are subject to uncertainty. The adequacy of our allowance for credit losses is sensitive to changes in current and forecasted economic conditions that may affect the ability of borrowers to make contractual payments as well as the value of the collateral securing such payments.

Although management believes it uses the best information available to establish the allowance for credit losses, future adjustments to the allowance for credit losses may be necessary and the Company’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.

In addition, because future events affecting borrowers and collateral cannot be predicted without uncertainty, the existing allowance for credit losses may not be adequate or increases may be necessary should the quality of any loans deteriorate as a result of the factors discussed. Any material increase in the allowance for credit losses would adversely impact the Company’s financial condition and results of operations.

The following table reflects our allocation of the allowance for credit losses by loan category as well as the amount of loans in each loan category, including related percentages, as of the dates indicated:


	June 30, 2026										December 31, 2025
	Allowance					Loans					Allowance					Loans
	Amount		%			Amount		%			Amount		%			Amount		%
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	11,022		15.6	%	$	1,193,177		18.3	%	$	9,999		14.3	%	$	1,132,439		17.3	%
Hospitality		7,475		10.6			858,617		13.1			8,737		12.5			847,989		12.9
Office		4,968		7.1			479,110		7.3			5,700		8.2			503,268		7.7
Other		13,828		19.6			1,477,659		22.6			14,078		20.1			1,532,667		23.4
Total commercial property loans		37,293		52.9			4,008,563		61.3			38,514		55.1			4,016,363		61.3
Construction		174		0.3			13,757		0.2			208		0.3			13,742		0.2
Residential		11,659		16.5			978,881		15.0			12,948		18.5			1,049,872		16.0
Total real estate loans		49,126		69.7			5,001,201		76.5			51,670		73.9			5,079,977		77.5
Commercial and industrial loans		8,681		12.3			1,171,272		17.9			7,792		11.1			1,074,908		16.4
Equipment financing agreements		12,668		18.0			362,839		5.6			10,441		15.0			408,483		6.1
Total	$	70,475		100.0	%	$	6,535,312		100.0	%	$	69,903		100.0	%	$	6,563,368		100.0	%

The following table sets forth certain ratios related to our allowance for credit losses at the dates presented:


	As of
	June 30, 2026			December 31, 2025
	(dollars in thousands)
Ratios:
Allowance for credit losses to loans		1.08	%		1.07	%
Nonaccrual loans to loans		0.15	%		0.28	%
Allowance for credit losses to nonaccrual loans		709.65	%		385.95	%

Balance:
Nonaccrual loans at end of period	$	9,931		$	18,112
Nonperforming loans at end of period	$	9,931		$	18,112

The allowance for credit losses was $70.5 million and $69.9 million at June 30, 2026 and December 31, 2025, respectively. The allowance attributed to individually evaluated loans was $2.6 million and $3.4 million as of June 30, 2026 and December 31, 2025, respectively. The allowance attributed to collectively evaluated loans was $67.9 million and $66.5 million as of June 30, 2026 and December 31, 2025, respectively.

As of June 30, 2026 and December 31, 2025, the allowance for credit losses related to off-balance sheet items, primarily unfunded loan commitments, was $2.0 million and $2.3 million, respectively. The Bank closely monitors each borrower’s repayment capabilities while funding existing commitments to ensure losses are minimized. Based on management’s evaluation and analysis of portfolio credit quality, prevailing economic conditions and economic forecasts, we believe these allowances were adequate for current expected lifetime losses in the loan portfolio and off-balance sheet exposure as of June 30, 2026.

The following table presents a summary of gross charge-offs and recoveries for the loan portfolio:


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
	(in thousands)

Gross charge-offs	$	(1,893	)	$	(12,377	)	$	(5,064	)	$	(15,567	)
Gross recoveries		629			1,013			1,202			2,256
Net (charge-offs) recoveries	$	(1,264	)	$	(11,364	)	$	(3,862	)	$	(13,311	)

For the three months ended June 30, 2026, gross charge-offs decreased $10.5 million from the same period in 2025. Gross recoveries for the three months ended June 30, 2026 decreased $0.4 million from the same period in 2025. Gross charge-offs for the three months ended June 30, 2026 and 2025 included $1.6 million and $2.9 million of equipment finance agreement charge-offs, respectively. Gross charge-offs for the three months ended June 30, 2025 also included an $8.6 million charge-off of a commercial real estate loan designated as nonaccrual in the first quarter of 2025. Gross recoveries for the three months ended June 30, 2026 and 2025 included $0.6 million of recoveries on equipment finance agreements for both periods.

For the six months ended June 30, 2026, gross charge-offs decreased $10.5 million from the same period in 2025. Gross recoveries for the six months ended June 30, 2026 decreased $1.1 million from the same period in 2025. Gross charge-offs for the six months ended June 30, 2026 and 2025 included $4.5 million and $5.7 million of equipment finance agreement charge-offs, respectively. Gross charge-offs for the six months ended June 30, 2025 also included the previously mentioned $8.6 million charge-off of a commercial real estate loan. Gross recoveries for the six months ended June 30, 2026 and 2025 included $1.0 million and $1.4 million of recoveries on equipment financing agreements, respectively.

The following table presents a summary of net (charge-offs) recoveries by loan category:


	Commercial Real Estate Loans			Residential Mortgage Loans			Commercial and Industrial Loans			Equipment Finance Agreements			Total
	(dollars in thousands)
Three Months Ended June 30, 2026
Average Loans	$	3,986,661		$	1,007,570		$	1,065,744		$	381,878		$	6,441,853
Net (Charge-Offs) Recoveries	$	38		$	(28	)	$	(237	)	$	(1,037	)	$	(1,264	)
Net (Charge-Offs) Recoveries to Average Loans (1)		—	%		(0.01	)%		(0.09	)%		(1.09	)%		(0.08	)%

Three Months Ended June 30, 2025
Average Loans	$	3,978,350		$	997,921		$	818,498		$	462,972		$	6,257,741
Net (Charge-Offs) Recoveries	$	(8,422	)	$	1		$	(613	)	$	(2,330	)	$	(11,364	)
Net (Charge-Offs) Recoveries to Average Loans (1)		(0.42	)%		—	%		(0.15	)%		(1.01	)%		(0.36	)%

Six Months Ended June 30, 2026
Average Loans	$	3,975,480		$	1,024,304		$	1,045,045		$	393,276		$	6,438,105
Net Charge-Offs	$	(51.4	)	$	(26	)	$	(325	)	$	(3,460	)	$	(3,862	)
Net Charge-Offs to Average Loans (1)		—	%		(0.01	)%		(0.06	)%		(1.76	)%		(0.12	)%

Six Months Ended June 30, 2025
Average Loans	$	3,958,335		$	982,922		$	808,069		$	474,499		$	6,223,825
Net (Charge-Offs) Recoveries	$	(8,169	)	$	2		$	(799	)	$	(4,345	)	$	(13,311	)
Net (Charge-Offs) Recoveries to Average Loans (1)		(0.41	)%		—	%		(0.20	)%		(1.83	)%		(0.43	)%

(1)

Annualized

Net loan charge-offs were $1.3 million, or 0.08% of average loans, and $11.4 million, or 0.36% of average loans, for the three months ended June 30, 2026 and 2025, respectively. Net loan charge-offs were $3.9 million, or 0.12% of average loans, and $13.3 million, or 0.43% of average loans, for the six months ended June 30, 2026 and 2025, respectively.

Deposits

The following table shows the composition of deposits by type as of the dates indicated:


	June 30, 2026					December 31, 2025
	Balance		Percent			Balance		Percent
	(dollars in thousands)
Demand – noninterest-bearing	$	2,135,418		30.7	%	$	2,015,212		30.2	%
Interest-bearing:
Demand		80,783		1.1			74,799		1.1
Money market and savings		2,084,572		30.0			2,084,218		31.2
Uninsured amount of time deposits more than $250,000:
Three months or less (1)		409,643		5.9			317,086		4.7
Over three months through six months (2)		288,202		4.1			276,791		4.1
Over six months through twelve months		202,218		2.9			156,750		2.3
Over twelve months		19,074		0.3			159		—
All other insured time deposits (3)		1,735,432		25.0			1,752,635		26.4
Total deposits	$	6,955,342		100.0	%	$	6,677,650		100.0	%

(1)

Includes State of California time deposits of $90.0 million at June 30, 2026 and December 31, 2025.

(2)

Includes State of California time deposits of $90.0 million and $60.0 million at June 30, 2026 and December 31, 2025, respectively.

(3)

Includes brokered deposits of $86.9 million and $88.5 million at June 30, 2026 and December 31, 2025, respectively.

Total deposits were $6.96 billion and $6.68 billion as of June 30, 2026 and December 31, 2025, respectively, representing an increase of $277.7 million, or 4.2%. While all deposit types increased, deposit growth was primarily driven by a $151.1 million

increase in time deposits and a $120.2 million increase in noninterest-bearing demand deposits. At June 30, 2026, the loan-to-deposit ratio was 94.0% compared to 98.3% at December 31, 2025.

As of June 30, 2026 and December 31, 2025, the aggregate amount of uninsured deposit accounts (deposits in amounts greater than $250,000, which is the maximum amount for federal deposit insurance) was $3.12 billion and $2.92 billion, respectively. For time deposits, the aggregate amount exceeding the insurance limit was $919.1 million and $750.8 million, respectively. Other uninsured deposits, such as demand and money market and savings deposits, were $2.20 billion and $2.17 billion, respectively. At June 30, 2026 and December 31, 2025, $1.47 billion and $1.34 billion of total uninsured deposits, respectively, were in accounts with balances of $5.0 million or more.

The Bank’s wholesale funds historically consisted of FHLB advances, brokered deposits, and State of California time deposits. As of June 30, 2026, the Bank had no outstanding FHLB advances, compared with $150.0 million of FHLB advances as of December 31, 2025.

Borrowings mostly take the form of FHLB advances. At June 30, 2026, there were no outstanding FHLB advances. At December 31, 2025, FHLB advances were $150.0 million, all of which were term advances. Funds from deposit growth not used to fund loan production were used to pay off borrowings. The weighted-average interest rate of all FHLB advances at December 31, 2025 was 4.02%. There were no FHLB advances outstanding at any month-end date during the six months ended June 30, 2026. The maximum amount of FHLB advances outstanding at any month-end date during the six months ended June 30, 2025 was $150.0 million. There were no contractual maturities of FHLB advances greater than twelve months at December 31, 2025.

Subordinated debentures were $130.8 million and $130.5 million as of June 30, 2026 and December 31, 2025, respectively. Subordinated debentures included fixed-to-floating subordinated notes of $108.8 million and $108.7 million as of June 30, 2026 and December 31, 2025, respectively, and junior subordinated deferrable interest debentures of $21.9 million and $21.7 million as of June 30, 2026 and December 31, 2025, respectively. On July 30, 2026, the Company issued $55.0 million of 6.50% Fixed-to-Floating Subordinated Notes with a maturity date of July 31, 2036 and provided notice to the trustee of its intent to redeem all of $110.0 million of existing subordinated debentures. See “Note 8 – Borrowings and Subordinated Debentures” and “Note 17 - Subsequent Events” for more details.

Stockholders’ Equity

Stockholders’ equity was $812.7 million and $796.4 million as of June 30, 2026 and December 31, 2025, respectively. The $16.3 million increase included net income of $46.1 million and share-based compensation of $1.6 million, partially offset by $16.9 million of dividends paid, $9.6 million in share repurchases, a $3.3 million increase in unrealized after-tax losses on securities available for sale, and $1.5 million in shares purchased to satisfy employees’ tax liabilities for the vesting of stock compensation. The Company repurchased 345,707 shares of common stock during the six months ended June 30, 2026, at an average share price of $27.90. At June 30, 2026, 1,991,495 shares remain under the Company’s share repurchase program.

Interest Rate Risk Management

The spread between interest income on interest-earning assets and interest expense on interest-bearing liabilities is the principal component of net interest income, and interest rate changes substantially affect our financial performance. We emphasize capital protection through stable earnings. In order to achieve stable earnings, we prudently manage our assets and liabilities and closely monitor the percentage changes in net interest income and equity value in relation to limits established within our guidelines.

The Company performs simulation modeling to estimate the potential effects of interest rate changes. The following table summarizes one of the stress simulations performed to forecast the impact of changing interest rates on net interest income and the value of interest-earning assets and interest-bearing liabilities reflected on our balance sheet (i.e., an instantaneous parallel shift in the yield curve of the magnitude indicated below) as of June 30, 2026. The Company compares this stress simulation to policy limits,

which specify the maximum tolerance level for net interest income exposure over 1- to 12-month and 13- to 24- month horizons, given the basis point adjustment in interest rates reflected below.


	Net Interest Income Simulation
	1- to 12-Month Horizon						13- to 24-Month Horizon
Change in Interest	Dollar			Percentage			Dollar			Percentage
Rates (Basis Points)	Change			Change			Change			Change
	(dollars in thousands)
300	$	39,405			13.32	%	$	56,236			17.95	%
200	$	27,236			9.21	%	$	39,058			12.47	%
100	$	14,011			4.74	%	$	20,502			6.54	%
(100)	$	(14,168	)		(4.79	%)	$	(23,157	)		(7.39	%)
(200)	$	(26,021	)		(8.80	%)	$	(46,803	)		(14.94	%)
(300)	$	(34,394	)		(11.63	%)	$	(69,017	)		(22.03	%)


	Economic Value of Equity (EVE)
Change in Interest	Dollar			Percentage
Rates (Basis Points)	Change			Change
	(dollars in thousands)
300	$	98,564			9.29	%
200	$	81,748			7.70	%
100	$	50,306			4.74	%
(100)	$	(70,480	)		(6.64	%)
(200)	$	(155,792	)		(14.68	%)
(300)	$	(250,588	)		(23.62	%)

The estimated sensitivity does not necessarily represent our forecast, and the results may not be indicative of actual changes to our net interest income. These estimates are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans and securities, pricing strategies on loans and deposits, and replacement of asset and liability cash flows.

The key assumptions, based upon loans, securities and deposits, are as follows:


Conditional prepayment rates*:
Loans receivable	18	%
Securities	6	%
Deposit rate betas*:
NOW, savings, money market demand	49	%
Time deposits, retail and wholesale	76	%

* Balance-weighted average

While the assumptions used are based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.

Historically, our primary source of capital has been the retention of operating earnings. In order to ensure adequate capital levels, the Board regularly assesses projected sources and uses of capital, expected loan growth, anticipated strategic actions (such as stock repurchases and dividends), and projected capital thresholds under adverse and severely adverse economic conditions. In addition, the Board considers the Company’s access to capital from financial markets through the issuance of additional debt and securities, including common stock or notes, to meet its capital needs.

The Company’s ability to pay dividends to stockholders depends in part upon dividends it receives from the Bank. California law restricts the amount available for cash dividends to the lesser of a bank’s retained earnings or net income for its last three fiscal

years (less any distributions to stockholders made during such period). Where the above test is not met, cash dividends may still be paid, with the prior approval of the Department of Financial Protection and Innovation (“DFPI”), in an amount not exceeding the greater of: (1) retained earnings of the Bank; (2) net income of the Bank for its last fiscal year; or (3) the net income of the Bank for its current fiscal year. The Company paid dividends of $16.9 million ($0.56 per share) for the six months ended June 30, 2026 and $32.6 million ($1.08 per share) for the year 2025. As of July 1, 2026, the Bank had the ability to pay dividends of approximately $44.4 million, after giving effect to the $0.28 dividend declared on July 23, 2026, for the third quarter of 2026, without the prior approval of the Commissioner of the DFPI.

At June 30, 2026, the Bank’s total risk-based capital ratio of 14.48%, Tier 1 risk-based capital ratio of 13.40%, common equity Tier 1 capital ratio of 13.40% and Tier 1 leverage capital ratio of 11.71% placed the Bank in the “well capitalized” category pursuant to capital rules, which is defined as institutions with a total risk-based capital ratio equal to or greater than 10.00%, Tier 1 risk-based capital ratio equal to or greater than 8.00%, common equity Tier 1 capital ratios equal to or greater than 6.50%, and Tier 1 leverage capital ratio equal to or greater than 5.00%.

At June 30, 2026, the Company’s total risk-based capital ratio was 15.29%, Tier 1 risk-based capital ratio was 12.61%, common equity Tier 1 capital ratio was 12.28% and Tier 1 leverage capital ratio was 10.94%.

For a discussion of the applicable capital adequacy framework, see "Regulation and Supervision - Capital Adequacy Requirements" in our 2025 Annual Report on Form 10-K.

For a discussion of off-balance sheet arrangements, see Note 12 - Off-Balance Sheet Commitments included in the notes to unaudited consolidated financial statements in this Report and “Item 1. Business - Off-Balance Sheet Commitments” in our 2025 Annual Report on Form 10-K.

For quantitative and qualitative disclosures regarding market risks, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk Management” in this Report.

Evaluation of Disclosure Controls and Procedures

Management is responsible for the disclosure controls and procedures of the Company. Disclosure controls and procedures are controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods required by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of June 30, 2026.

Changes in Internal Control over Financial Reporting

There were no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f)) during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 1. Legal Proceedings

From time to time, Hanmi Financial and its subsidiaries are parties to litigation that arises in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the business of Hanmi Financial and its subsidiaries. In the opinion of management, the resolution of any such issues would not have a material adverse impact on the financial condition, results of operations, or liquidity of Hanmi Financial or its subsidiaries.

There have been no material changes in risk factors applicable to the Company from those described in “Risk Factors” in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

On April 25, 2024, the Company announced that the Board of Directors has adopted a stock repurchase program under which the Company may repurchase up to 5% of its outstanding shares, or approximately 1.5 million shares of its common stock. On January 29, 2026, the Board of Directors authorized an expansion of the stock repurchase program, adding 1.5 million shares that may be repurchased under the current program. As of June 30, 2026, 1,991,495 shares remained available for future purchases under that stock repurchase program. The program has no scheduled expiration date and the Board of Directors has the right to suspend or discontinue the program at any time.

The following table represents information with respect to repurchases of common stock made by the Company during the three months ended June 30, 2026:


Purchase Date:	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Maximum Shares That May Yet Be Purchased Under the Program
April 1, 2026 - April 30, 2026		24,000	$	30.27		24,000		2,127,495
May 1, 2026 - May 31, 2026		80,000	$	29.90		80,000		2,047,495
June 1, 2026 - June 30, 2026		56,000	$	30.70		56,000		1,991,495
Total		160,000	$	30.24		160,000		1,991,495

The Company acquired 15,134 shares from employees in connection with the satisfaction of employee tax withholding obligations incurred through the vesting of Company stock awards for the three months ended June 30, 2026. Shares withheld to satisfy income taxes upon the vesting of stock awards are repurchased pursuant to the terms of the applicable plan and not under the Company’s repurchase program.

None.

Not applicable.

Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2026, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Hanmi securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”


Exhibit Number		Document

31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document *

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents *

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL

* Attached as Exhibit 101 to this report are documents formatted in Inline XBRL (Extensible Business Reporting Language).

Hanmi Financial Corporation

August 7, 2026

/s/ Bonita I. Lee

Bonita I. Lee

President and Chief Executive Officer (Principal Executive Officer)

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.