The Company is a participant in the Certificate of Deposit Account Registry Service (“CDARS”) and IntraFi Network Insured Cash Sweep (“ICS”). The Company receives an equal dollar amount of deposits (“reciprocal deposits”) from other participating banks in exchange for the deposits we place into the networks to fully qualify large customer deposits for FDIC insurance. These reciprocal deposits are not required to be treated as brokered deposits up to the lesser of 20% of the Bank’s total liabilities or $5 billion.

As of June 30, 2026, reciprocal deposits decreased to $705.2 million, representing 21.0% of total deposits and 20.7% of Bank’s total liabilities, compared to $743.6 million, or 22.1% of total deposits at December 31, 2025. The excess over 20% increased the Bank’s wholesale funding to total assets ratio and net non-core funding dependence ratio. These two ratios were still within the Bank's internal policy limit.

Time deposits that exceeded the FDIC insurance limit of $250,000 amounted to $53.4 million and $65.1 million as of June 30, 2026 and December 31, 2025, respectively. There were no brokered time deposits as of June 30, 2026 and $3.8 million brokered time deposits as of December 31, 2025.

The Company participates in a state public deposits program that allows it to receive deposits from the state or from political subdivisions within the state in amounts that would not be covered by the FDIC. This program provides a stable source of funding to the Company. As of June 30, 2026 and December 31, 2025, total collateralized deposits, including the deposits of State of California and their public agencies, were $46.0 million and $45.8 million, respectively, and were collateralized by letters of credit issued by the FHLB under the Company’s secured line of credit with the FHLB. See Note 6 – Borrowing Arrangements for additional information regarding the FHLB secured line of credit.