Debt securities have been classified as either held-to-maturity or available-for-sale in the consolidated balance sheets according to management’s intent. The amortized cost of held-to-maturity debt securities and their approximate fair values at June 30, 2026 and December 31, 2025 were as follows:


(dollars in thousands)	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Estimated Fair Value
June 30, 2026

Taxable municipals	$	555	$	—	$	(73)	$	482
Tax exempt municipals	52,206		—		(3,634)		48,572
	$	52,761	$	—	$	(3,707)	$	49,054

December 31, 2025
Taxable municipals	$	555	$	—	$	(63)	$	492
Tax exempt municipals	52,381		—		(3,565)		48,816
	$	52,936	$	—	$	(3,628)	$	49,308


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2026
U.S. government and agency and government sponsored enterprise securities:
Mortgage-backed securities	$	234,327	$	891	$	(5,315)	$	229,903
SBA securities	3,134		7		(53)		3,088
U.S. Treasury	2,628		—		(186)		2,442
U.S. Agency	2,000		—		(224)		1,776
Collateralized mortgage obligations	73,194		119		(2,664)		70,649
Taxable municipals	1,006		1		(73)		934


	$	316,289	$	1,018	$	(8,515)	$	308,792


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2025
U.S. government and agency and government sponsored enterprise securities:
Mortgage-backed securities	$	161,376	$	2,041	$	(2,401)	$	161,016
SBA securities	3,862		8		(54)		3,816
U.S. Treasury	2,654		—		(182)		2,472
U.S. Agency	2,000		—		(207)		1,793
Collateralized mortgage obligations	66,293		457		(1,895)		64,855
Taxable municipals	1,006		—		(68)		938


	$	237,191	$	2,506	$	(4,807)	$	234,890

Accrued interest receivable on held-to-maturity and available-for-sale debt securities totaled $1.3 million and $1.1 million at June 30, 2026 and December 31, 2025, respectively, and is included within accrued interest receivable and other assets in the consolidated balance sheets. Accrued interest receivable is excluded from the ACL.

At June 30, 2026, available-for-sale debt securities with an amortized cost of $85.7 million were pledged to the Federal Reserve Bank (“Federal Reserve”) as collateral for secured public deposits and for other purposes as required by law or contract provisions, in addition to held-to-maturity debt securities with an amortized cost of $52.8 million that were pledged as collateral for a secured line of credit with the Federal Reserve. See Note 6 – Borrowing Arrangements for additional information regarding the FHLB and Federal Reserve secured lines of credit. The Company also pledged $14.3 million available-for-sale debt securities to another financial institution to support the collateralization requirement against certain customers’ standby lines of credit.

The amortized cost and estimated fair value of all held-to-maturity and available-for-sale debt securities as of June 30, 2026 by contractual maturities are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Held-to-Maturity				Available-for-Sale
(dollars in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
June 30, 2026
Due in one year or less	$	—	$	—	$	116	$	117
Due after one year through five years	—		—		10,917		10,287
Due after five years through ten years	44,597		41,600		13,568		12,511
Due after ten years	8,164		7,454		291,688		285,877
	$	52,761	$	49,054	$	316,289	$	308,792

The gross unrealized losses and related estimated fair values of all available-for-sale debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2026 and December 31, 2025 are summarized as follows:


	Less than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value
June 30, 2026:
Available-for-sale debt securities:
U.S. government and agency and government sponsored enterprise securities:
Mortgage-backed securities	$	(3,159)	$	151,782	$	(2,156)	$	20,848	$	(5,315)	$	172,630
SBA securities	—		—		(53)		2,282		(53)		2,282
U.S. Treasury	—		—		(186)		2,442		(186)		2,442
U.S. Agency	—		—		(224)		1,776		(224)		1,776
Collateralized mortgage obligations	(472)		34,079		(2,192)		25,163		(2,664)		59,242
Taxable municipals	—		—		(73)		432		(73)		432


	$	(3,631)	$	185,861	$	(4,884)	$	52,943	$	(8,515)	$	238,804







December 31, 2025:
U.S. government and agency and government sponsored enterprise securities:
Mortgage-backed securities	$	(329)	$	47,667	$	(2,072)	$	28,726	$	(2,401)	$	76,393
SBA securities	—		—		(54)		2,813		(54)		2,813
U.S. Treasury	—		—		(182)		2,472		(182)		2,472
U.S. Agency	—		—		(207)		1,793		(207)		1,793
Collateralized mortgage obligations	(35)		7,971		(1,860)		25,234		(1,895)		33,205
Taxable municipals	—		—		(68)		438		(68)		438


	$	(364)	$	55,638	$	(4,443)	$	61,476	$	(4,807)	$	117,114

As of June 30, 2026, the Company had a total of 112 available-for-sale debt securities in a gross unrealized loss position totaling $8.5 million, including 61 securities with total gross unrealized losses of $4.9 million that had been in a continual loss position for twelve months and longer. As of December 31, 2025, the Company had a total of 78 available-for-sale debt securities in a gross unrealized loss position totaling $4.8 million, including 63 securities with total gross unrealized losses of $4.4 million that had been in a continual loss position for twelve months and longer. Such unrealized losses on these investment securities have not been recognized into income.

Unrealized losses on available-for-sale debt securities are recognized in shareholders’ equity as accumulated other comprehensive loss, net of taxes. At June 30, 2026, the Company had a net unrealized loss on available-for-sale debt securities of $7.5 million, or $5.3 million net of tax in accumulated other comprehensive loss, compared to a net unrealized loss of $2.3 million, or $1.6 million net of tax in accumulated other comprehensive loss, at December 31, 2025.

For available-for-sale debt securities with unrealized losses, management considered the financial condition of the issuer and the Company’s intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The Company’s available-for-sale debt securities consisted of U.S. Treasury, U.S. government and agency and government sponsored enterprise securities, and municipals, which historically have had limited credit loss experience. In addition, the Company reviewed the credit rating of the municipal securities. At June 30, 2026, the total fair value of taxable municipal securities was $934 thousand, and all of these securities were rated AA and above. At December 31, 2025, the total fair value of taxable municipal securities was $938 thousand, and all of these securities were rated AA and above.

At June 30, 2026, 61 held-to-maturity debt securities with fair values totaling $49.1 million had gross unrecognized losses totaling $3.7 million, compared to 61 held-to-maturity debt securities with fair values totaling $49.3 million had gross unrecognized losses totaling $3.6 million at December 31, 2025. The Company has the intent and ability to hold the securities classified as held-to-maturity until they mature, at which time the Company will receive full value for the securities. At June 30, 2026 and December 31, 2025, fair values of held-to-maturity debt securities rated AA and above totaled $45.8 million and $46.0 million, respectively and those rated AA- totaled $3.3 million and $3.3 million, respectively.

Management evaluates securities in an unrealized loss position at least on a quarterly basis, and determined that the unrealized losses at June 30, 2026 and 2025 related to each investment were primarily attributable to factors other than credit related, including changes in interest rates driven by the Federal Reserve’s policy to fight against inflation and general volatility in market conditions. As such, the Company applied a zero credit loss assumption for these securities and no provision for credit losses was recorded for held-to-maturity or available-for-sale debt securities during the three and six months ended June 30, 2026 and 2025.

As a member of the Federal Reserve System, the Company must hold stock of the Federal Reserve in an amount equal to 3% of the Company’s common stock and additional paid-in capital. In addition, as a member of the Federal Home Loan Bank (“FHLB”) of San Francisco, the Company is required to own stock of the FHLB based on the Company’s outstanding mortgage assets and outstanding advances from the FHLB.

The Company also has equity securities in the form of capital stock invested in two different banker’s bank stocks which totaled $819 thousand at both June 30, 2026 and December 31, 2025. These equity securities are reported in accrued interest receivable and other assets in the consolidated balance sheets. At June 30, 2026 and December 31, 2025, the Company evaluated the carrying value of these equity securities and determined that they were not impaired. During the three and six months ended June 30, 2026 and 2025, there were no losses related to changes in the fair value of these equity securities.

The Company has other equity investments and investments in a technology venture capital fund focused on the intersection of fintech and community banking. These equity investments represent variable interest entities (“VIEs”), however the Company is not the primary beneficiary. The Company’s maximum exposure to loss related to its investments in these unconsolidated VIEs is limited to the carrying value of each of the investments plus any unfunded capital commitments. At June 30, 2026 and December 31, 2025, the balance of these investments, which is included in accrued interest receivable and other assets in the consolidated balance sheets, was $8.3 million and $9.1 million, respectively. Total unfunded capital commitments for these investments were $6.7 million at June 30, 2026. These equity securities are measured using the equity method of accounting when the Company’s ownership interest in such investments exceeds 5%, or carried at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments of the same issuer. Cash distributions that are considered a return of capital are recorded as a reduction of the Company’s investment. During the three and six months ended June 30, 2026, the Company received $882 thousand and $792 thousand, respectively, of net capital distributions related to these

equity investments and recognized losses of $251 thousand and $70 thousand, respectively, which is included in other losses, charges and fees in the consolidated statements of income. During the three and six months ended June 30, 2025, the Company made $398 thousand and $330 thousand, respectively, of net capital contributions to these equity investments. At June 30, 2026 and December 31, 2025, the Company evaluated the carrying value of these equity investments and determined they were not impaired. During the three and six months ended June 30, 2026 and 2025, there were no losses recognized related to changes in fair value.

The Company has also invested in and acquired interest in limited partnerships that operate affordable housing projects that qualify for and have received an allocation of federal and/or state low-income housing tax credits. These investments represent VIEs, however the Company is not the primary beneficiary. The Company’s maximum exposure to loss related to its investments in these unconsolidated VIEs is limited to the carrying amount of the investment and previously recorded tax credits which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level. At June 30, 2026 and December 31, 2025, the net amortized balance of these investments was $4.3 million and $4.8 million, respectively, and is included in accrued interest and other assets in the consolidated balance sheets. The unfunded portion of these investments totaled $295 thousand and $382 thousand at June 30, 2026 and December 31, 2025, respectively, and is included in accrued interest payable and other liabilities in the consolidated balance sheets.

At June 30, 2026 and December 31, 2025, the Company evaluated the carrying value of these tax credit equity investments and determined they were not impaired. During the three and six months ended June 30, 2026 and 2025, there were no losses recognized related to changes in fair value.