As of September 30, 2026, 77.3% of the Company’s total loan portfolio consisted of real estate loans, with commercial real estate loans representing 74.5% of total loans. The Company’s real estate loans and construction loans are secured by real properties primarily located in California. As of September 30, 2026, $430.5 million, or 4.8% of the total commercial real estate loans were secured by farmland, compared to $424.5 million, or 6.5%, at December 31, 2025. The loans secured by farmland included $123.0 million for loans secured by dairy & livestock land and $307.5 million for loans secured by agricultural land at September 30, 2026, compared to $119.0 million and $305.5 million, respectively, at December 31, 2025. As of September 30, 2026, dairy & livestock and agribusiness loans totaled $341.8 million, consisting of $300.9 million of dairy & livestock loans and $40.9 million of agribusiness loans, compared to $431.6 million, consisting of $386.1 million of dairy & livestock loans and $45.5 million of agribusiness loans at December 31, 2025.

In connection with the acquisition of Heritage, the Company acquired BVF, a subsidiary of the Bank that operates a factoring business primarily engaged in purchasing and collecting factored receivables on a nationwide basis. Factored receivables are receivables that have been transferred by the originating organization and typically have not been subject to previous collection efforts. These receivables are acquired from a variety of companies, including but not limited to service providers, transportation companies, manufacturers, distributors, wholesalers, apparel companies, advertisers, and temporary staffing companies. As of September 30, 2026, factored receivables totaled $108.8 million and were included in the Company’s commercial and industrial loan portfolio.

At September 30, 2026 and December 31, 2025, loans totaling $7.60 billion and $6.47 billion, respectively, were pledged to secure available lines of credit from the FHLB and the Federal Reserve Bank.

There were no outstanding loans held-for-sale as of September 30, 2026 and December 31, 2025.

We monitor credit quality by evaluating various risk attributes and utilize such information in our evaluation of the appropriateness of the allowance for credit losses. Internal credit risk ratings, within our loan risk rating system, are the credit quality indicators that we most closely monitor.

An important element of our approach to credit risk management is our loan risk rating system. The originating officer assigns each loan an initial risk rating, which is reviewed and confirmed or changed, as appropriate, by credit management. Approvals are made based upon the amount of inherent credit risk specific to the transaction and are reviewed for appropriateness by senior line and credit management personnel. Credits are monitored by line and credit management personnel for deterioration or improvement in a borrower’s financial condition, which would impact the ability of the borrower to perform under the contract. Risk ratings are adjusted as necessary.

Loans are risk rated into the following categories: Pass, Special Mention, Substandard, Doubtful and Loss. Each of these groups is assessed for the proper amount to be used in determining the adequacy of our allowance for losses. These categories can be described as follows:

Pass — These loans, including loans on the Bank’s internal watch list, range from minimal credit risk to lower than average, but still acceptable, credit risk. Watch list loans usually require more than normal management attention. Loans on the watch list may involve borrowers with adverse financial trends, higher debt/equity ratios, or weaker liquidity positions, but not to the degree of being considered a defined weakness or problem loan where risk of loss may be apparent.

Special Mention — Loans assigned to this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard — Loans classified as substandard are inadequately protected by the current financial strength and paying capacity of the obligor or by the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected.

Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or the liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loss — Loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset with insignificant value even though partial recovery may be affected in the future.

The following tables summarize loans by type and origination year, according to our internal risk ratings as of the dates presented.


	Origination Year												Revolving loans amortized		Revolving loans converted to
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior		cost basis		term loans		Total
September 30, 2026
Commercial real estate loans:
Risk Rating:
Pass	$	897,801	$	872,558	$	408,291	$	583,482	$	1,328,932	$	4,227,787	$	299,943	$	37,665	$	8,656,459
Special Mention		1,883		3,377		18,272		24,881		59,957		190,721		13,669		7,452		320,212
Substandard		1,694		393		8,761		6,524		22,626		14,530		1,293		249		56,070
Total Commercial real estate loans:	$	901,378	$	876,328	$	435,324	$	614,887	$	1,411,515	$	4,433,038	$	314,905	$	45,366	$	9,032,741

Construction loans:
Risk Rating:
Pass	$	49,970	$	123,804	$	43,080	$	100	$	11,387	$	—	$	—	$	20	$	228,361
Substandard		—		—		—		—		—		685		—		—		685
Total Construction loans:	$	49,970	$	123,804	$	43,080	$	100	$	11,387	$	685	$	—	$	20	$	229,046

SBA loans:
Risk Rating:
Pass	$	77,870	$	75,121	$	42,128	$	19,886	$	57,241	$	174,937	$	2,504	$	752	$	450,439
Special Mention		—		—		—		611		—		8,623		—		—		9,234
Substandard		—		—		754		296		1,503		7,954		113		—		10,620
Total SBA loans:	$	77,870	$	75,121	$	42,882	$	20,793	$	58,744	$	191,514	$	2,617	$	752	$	470,293
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	26	$	—	$	—	$	26

Commercial and industrial loans:
Risk Rating:
Pass	$	151,475	$	127,667	$	77,881	$	69,600	$	59,804	$	182,019	$	680,603	$	15,750	$	1,364,799
Special Mention		1,601		361		704		1,740		5,185		2,723		19,683		6,885		38,882
Substandard		—		2,836		1,748		1,608		1,037		8,090		10,843		9,991		36,153
Total Commercial and industrial loans:	$	153,076	$	130,864	$	80,333	$	72,948	$	66,026	$	192,832	$	711,129	$	32,626	$	1,439,834
Current YTD Period: Gross charge-offs	$	—	$	—	$	112	$	115	$	21	$	10	$	—	$	—	$	258


	Origination Year												Revolving loans amortized		Revolving loans converted to
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior		cost basis		term loans		Total
September 30, 2026
Dairy & livestock and agribusiness loans:
Risk Rating:
Pass	$	127	$	54	$	185	$	—	$	—	$	525	$	306,791	$	—	$	307,682
Special Mention		—		—		311		—		—		56		26,852		—		27,219
Substandard		—		—		—		—		—		—		6,900		—		6,900
Total Dairy & livestock and agribusiness loans:	$	127	$	54	$	496	$	—	$	—	$	581	$	340,543	$	—	$	341,801

Municipal lease finance receivables loans:
Risk Rating:
Pass	$	65	$	514	$	2,547	$	—	$	4,108	$	46,566	$	—	$	—	$	53,800
Total Municipal lease finance receivables loans:	$	65	$	514	$	2,547	$	—	$	4,108	$	46,566	$	—	$	—	$	53,800

SFR mortgage loans:
Risk Rating:
Pass	$	34,324	$	34,988	$	17,390	$	17,345	$	59,362	$	168,740	$	—	$	152	$	332,301
Special Mention		—		—		—		—		—		5,076		—		—		5,076
Substandard		—		—		—		—		—		1,017		—		—		1,017
Total SFR mortgage loans:	$	34,324	$	34,988	$	17,390	$	17,345	$	59,362	$	174,833	$	—	$	152	$	338,394

Consumer and other loans:
Risk Rating:
Pass	$	6,434	$	6,604	$	4,259	$	840	$	316	$	4,789	$	184,264	$	4,261	$	211,767
Special Mention		—		—		—		—		—		—		1,807		65		1,872
Substandard		—		—		—		—		—		259		1,910		298		2,467
Total Consumer and other loans:	$	6,434	$	6,604	$	4,259	$	840	$	316	$	5,048	$	187,981	$	4,624	$	216,106

Total Loans, at amortized cost:
Risk Rating:
Pass	$	1,218,066	$	1,241,310	$	595,761	$	691,253	$	1,521,150	$	4,805,363	$	1,474,105	$	58,600	$	11,605,608
Special Mention		3,484		3,738		19,287		27,232		65,142		207,199		62,011		14,402		402,495
Substandard		1,694		3,229		11,263		8,428		25,166		32,535		21,059		10,538		113,912
Total Loans at amortized cost:	$	1,223,244	$	1,248,277	$	626,311	$	726,913	$	1,611,458	$	5,045,097	$	1,557,175	$	83,540	$	12,122,015
Current YTD Period: Total gross charge-offs	$	—	$	—	$	112	$	115	$	21	$	36	$	—	$	—	$	284


	Origination Year												Revolving loans amortized		Revolving loans converted to
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		cost basis		term loans		Total
December 31, 2025
Commercial real estate loans:
Risk Rating:
Pass	$	595,637	$	304,734	$	378,718	$	1,143,941	$	962,666	$	2,631,270	$	251,597	$	34,757	$	6,303,320
Special Mention		3,604		12,317		8,364		45,946		34,806		121,473		8,548		8,751		243,809
Substandard		1,456		—		3,327		7,266		4,578		10,108		531		—		27,266
Total Commercial real estate loans:	$	600,697	$	317,051	$	390,409	$	1,197,153	$	1,002,050	$	2,762,851	$	260,676	$	43,508	$	6,574,395

Construction loans:
Risk Rating:
Pass	$	15,742	$	11,829	$	—	$	10,241	$	—	$	—	$	—	$	—	$	37,812
Total Construction loans:	$	15,742	$	11,829	$	—	$	10,241	$	—	$	—	$	—	$	—	$	37,812

SBA loans:
Risk Rating:
Pass	$	48,707	$	25,775	$	12,077	$	44,550	$	45,057	$	100,201	$	—	$	—	$	276,367
Special Mention		—		—		—		—		—		391		—		—		391
Substandard		—		—		—		1,537		13		4,093		—		—		5,643
Total SBA loans:	$	48,707	$	25,775	$	12,077	$	46,087	$	45,070	$	104,685	$	—	$	—	$	282,401
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	118	$	—	$	—	$	118

Commercial and industrial loans:
Risk Rating:
Pass	$	133,937	$	73,869	$	85,504	$	73,264	$	50,997	$	143,690	$	358,873	$	9,880	$	930,014
Special Mention		83		62		1,635		4,497		951		359		20,756		2,931		31,274
Substandard		2,900		—		1,399		641		138		2,561		990		3,714		12,343
Total Commercial and industrial loans:	$	136,920	$	73,931	$	88,538	$	78,402	$	52,086	$	146,610	$	380,619	$	16,525	$	973,631
Current YTD Period: Gross charge-offs	$	—	$	—	$	392	$	—	$	—	$	—	$	—	$	127	$	519


	Origination Year												Revolving loans amortized		Revolving loans converted to
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		cost basis		term loans		Total
December 31, 2025
Dairy & livestock and agribusiness loans:
Risk Rating:
Pass	$	3	$	211	$	—	$	—	$	507	$	610	$	411,447	$	56	$	412,834
Special Mention		—		376		—		—		—		82		11,435		—		11,893
Substandard		—		—		—		—		—		—		6,850		—		6,850
Total Dairy & livestock and agribusiness loans:	$	3	$	587	$	—	$	—	$	507	$	692	$	429,732	$	56	$	431,577

Municipal lease finance receivables loans:
Risk Rating:
Pass	$	570	$	2,699	$	—	$	4,479	$	23,701	$	28,093	$	—	$	—	$	59,542
Total Municipal lease finance receivables loans:	$	570	$	2,699	$	—	$	4,479	$	23,701	$	28,093	$	—	$	—	$	59,542

SFR mortgage loans:
Risk Rating:
Pass	$	36,561	$	16,445	$	16,766	$	57,988	$	38,394	$	114,687	$	—	$	—	$	280,841
Special Mention		—		—		—		—		—		370		—		252		622
Substandard		—		—		—		—		—		303		—		—		303
Total SFR mortgage loans:	$	36,561	$	16,445	$	16,766	$	57,988	$	38,394	$	115,360	$	—	$	252	$	281,766

Consumer and other loans:
Risk Rating:
Pass	$	3,037	$	4,497	$	1,792	$	504	$	659	$	426	$	42,860	$	3,588	$	57,363
Special Mention		—		—		—		—		19		—		391		—		410
Substandard		—		—		—		—		—		—		—		296		296
Total Consumer and other loans:	$	3,037	$	4,497	$	1,792	$	504	$	678	$	426	$	43,251	$	3,884	$	58,069
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	5	$	—	$	5

Total Loans, at amortized cost:
Risk Rating:
Pass	$	834,194	$	440,059	$	494,857	$	1,334,967	$	1,121,981	$	3,018,977	$	1,064,777	$	48,281	$	8,358,093
Special Mention		3,687		12,755		9,999		50,443		35,776		122,675		41,130		11,934		288,399
Substandard		4,356		—		4,726		9,444		4,729		17,065		8,371		4,010		52,701
Total Loans at amortized cost:	$	842,237	$	452,814	$	509,582	$	1,394,854	$	1,162,486	$	3,158,717	$	1,114,278	$	64,225	$	8,699,193
Current YTD Period: Gross charge-offs	$	—	$	—	$	392	$	—	$	—	$	118	$	5	$	127	$	642

The Company's allowance models calculate reserves over the average life of the loan, which includes the remaining time to maturity, adjusted for estimated prepayments applied as an adjustment to our commercial real estate and commercial and industrial loans. Our allowance for credit losses is based upon lifetime loss rate models developed from an estimation framework that uses historical lifetime loss experiences to derive loss rates at a collective pool level. We measure the expected credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. We have three collective loan pools: Commercial Real Estate, Commercial and Industrial, and Consumer. A majority of the ACL relates to loans within the Commercial Real Estate and Commercial and Industrial methodologies, each evaluated on a collective basis. Our ACL amounts are largely driven by portfolio characteristics, including loss history, internal risk grading, various risk attributes, and the economic outlook for certain macroeconomic variables. Risk attributes for commercial real estate loans include original loan to value ratios, origination year, loan seasoning, and macroeconomic variables that include Real GDP growth, commercial real estate price index and unemployment rate. Risk attributes for commercial and industrial loans include internal risk ratings, borrower industry sector, loan credit spreads and macroeconomic variables that include unemployment rate and BBB spread. The macroeconomic variables for Consumer include unemployment rate and GDP. The Commercial Real Estate methodology is applied over commercial real estate loans, a portion of construction loans, and a portion of SBA loans. The Commercial and Industrial methodology is applied over a substantial portion of the Company’s commercial and industrial loans, all dairy & livestock and agribusiness loans, municipal lease receivables, as well as the remaining portion of SBA loans. The Consumer methodology is applied to SFR mortgage loans, consumer loans, as well as the remaining construction loans. In addition to determining the quantitative life of loan loss rate to be applied against the amortized cost basis of the portfolio segments, management reviews current conditions and forecasts to determine whether adjustments are needed to ensure that the life of loan loss rates reflect both the current state of the portfolio, and expectations for macroeconomic changes. The Company’s ACL estimate incorporates a reasonable and supportable forecast of various macroeconomic variables over the remaining average life of our loans. This forecast incorporates an assumption that each macroeconomic variable will revert to a long-term expectation, starting in years two through three, of the reasonable and supportable forecast period, with the reversion largely completed within the first five years of the forecast. The economic forecast is based on probability weighted scenarios to address macroeconomic uncertainty. Our methodology for assessing the appropriateness of the allowance is reviewed on a regular basis and considers overall risks in the Bank’s loan portfolio. Refer to Note 3 – Summary of significant Accounting Policies included in the 2025 Form 10-K for a more detailed discussion concerning the allowance for credit losses.

The ACL totaled $125.6 million at September 30, 2026, compared to $77.2 million at December 31, 2025. The $48.4 million increase in the ACL from December 31, 2025 to September 30, 2026 was primarily driven by the ACL recorded for loans acquired in the Heritage acquisition. At September 30, 2026, the ACL as a percentage of total loans and leases, at amortized cost, was 1.04%, compared to 0.89% at December 31, 2025. Our economic forecast continues to be a blend of multiple forecasts produced by Moody’s. These U.S. economic forecasts include a baseline forecast as well as multiple forecasts for both upside and downside risks to the baseline forecast. The baseline forecast continues to represent the largest weighting in our multi-weighted forecast scenario, with upside and downside risks weighted among multiple forecasts. As of September 30, 2026, the resulting weighted forecast reflects Real GDP growth declining throughout 2026 and staying below 2% through the first half of 2028. The unemployment rate is forecasted to increase, with the unemployment rate reaching 5% by the beginning of 2027 and remaining above 5% through 2028. Commercial real estate values are forecasted to decline through the end of 2027, before experiencing growth in 2028.

Management believes that the ACL was appropriate at September 30, 2026 and December 31, 2025. Due to inflationary pressures, changing interest rates, lower commercial real estate values, international tariffs, and geopolitical events, no assurance can be given that economic conditions that adversely affect the Company’s service areas or other circumstances will not be reflected in increased provisions for credit losses in the future.

The following tables present the balance and activity related to the allowance for credit losses for held-for-investment loans by type for the periods presented.


	Three Months Ended September 30, 2026
(Dollars in thousands)	Ending Balance June 30, 2026		Charge-offs			Recoveries		(Recapture of) provision for credit losses			Ending Balance September 30, 2026
Commercial real estate	$	76,065	$	—		$	—	$	(655	)	$	75,410
Construction		3,056		—			—		(519	)		2,537
SBA		4,568		—			—		(13	)		4,555
Commercial and industrial		36,588		(20	)		—		(399	)		36,169
Dairy & livestock and agribusiness		3,082		—			—		556			3,638
Municipal lease finance receivables		222		—			—		(12	)		210
SFR mortgage		515		—			—		11			526
Consumer and other loans		2,565		—			—		31			2,596
Total allowance for credit losses	$	126,661	$	(20	)	$	—	$	(1,000	)	$	125,641


	Three Months Ended September 30, 2025
(Dollars in thousands)	Ending Balance June 30, 2025		Charge-offs			Recoveries		Provision for (recapture of) credit losses			Ending Balance September 30, 2025
Commercial real estate	$	64,542	$	—		$	—	$	852		$	65,394
Construction		240		—			159		123			522
SBA		3,066		(67	)		6		(425	)		2,580
Commercial and industrial		6,357		—			235		64			6,656
Dairy & livestock and agribusiness		2,554		—			—		237			2,791
Municipal lease finance receivables		220		—			—		4			224
SFR mortgage		477		—			—		16			493
Consumer and other loans		547		—			—		129			676
Total allowance for credit losses	$	78,003	$	(67	)	$	400	$	1,000		$	79,336


	Nine Months Ended September 30, 2026
(Dollars in thousands)	Ending Balance December 31, 2025		Charge-offs			Recoveries		Initial ACL on PCD & PSL Loans at Acquisition		Provision for (recapture of) Credit Losses			Ending Balance September 30, 2026
Commercial real estate	$	61,661	$	—		$	—	$	17,401	$	(3,652	)	$	75,410
Construction		593		—			—		1,593		351			2,537
SBA		2,720		(26	)		8		1,830		23			4,555
Commercial and industrial		8,438		(258	)		128		24,065		3,796			36,169
Dairy & livestock and agribusiness		2,486		—			—		1		1,151			3,638
Municipal lease finance receivables		251		—			—		—		(41	)		210
SFR mortgage		442		—			—		35		49			526
Consumer and other loans		570		—			—		1,703		323			2,596
Total allowance for credit losses	$	77,161	$	(284	)	$	136	$	46,628	$	2,000		$	125,641


	Nine Months Ended September 30, 2025
(Dollars in thousands)	Ending Balance December 31, 2024		Charge-offs			Recoveries		(Recapture of) Provision for Credit Losses			Ending Balance September 30, 2025
Commercial real estate	$	66,237	$	—		$	—	$	(843	)	$	65,394
Construction		312		—			171		39			522
SBA		2,629		(118	)		47		22			2,580
Commercial and industrial		6,093		(413	)		532		444			6,656
Dairy & livestock and agribusiness		3,610		—			—		(819	)		2,791
Municipal lease finance receivables		205		—			—		19			224
SFR mortgage		424		—			—		69			493
Consumer and other loans		612		(5	)		—		69			676
Total allowance for credit losses	$	80,122	$	(536	)	$	750	$	(1,000	)	$	79,336

We seek to manage asset quality and control credit risk through diversification of the loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Management Division is responsible for monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of nonperforming, past due loans and larger credits, are conducted on a regular and ongoing basis to identify potential credit deterioration and losses. These reviews consider such factors as the financial strength of borrowers and any guarantors, the value of the applicable collateral, historical credit loss experience, estimated credit losses, growth in the loan portfolio, prevailing economic conditions and other factors. Refer to Note 3 – Summary of Significant Accounting Policies, included in the 2025 Form 10-K, for additional discussion of the Bank’s accounting policies related to past due and nonperforming loans.

The following table presents the recorded investment in, and the aging of, past due loans (including nonaccrual loans), by type of loans as of the dates presented.


	September 30, 2026
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Current		Total Loans and Financing Receivables
Commercial real estate
Owner occupied	$	2,532	$	2,049	$	4,050	$	8,631	$	2,837,372	$	2,846,003
Non-owner occupied		—		—		—		—		6,186,738		6,186,738
Construction
Speculative (1)		—		—		685		685		121,422		122,107
Non-speculative		—		—		—		—		106,939		106,939
SBA		—		11		2,652		2,663		467,630		470,293
Commercial and industrial		530		32		6,668		7,230		1,432,604		1,439,834
Dairy & livestock and agribusiness		—		—		—		—		341,801		341,801
Municipal lease finance receivables		—		—		—		—		53,800		53,800
SFR mortgage		—		596		—		596		337,798		338,394
Consumer and other loans		—		—		125		125		215,981		216,106
Total loans at amortized cost	$	3,062	$	2,688	$	14,180	$	19,930	$	12,102,085	$	12,122,015


	December 31, 2025
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Current		Total Loans and Financing Receivables
Commercial real estate
Owner occupied	$	2,887	$	—	$	43	$	2,930	$	2,330,311	$	2,333,241
Non-owner occupied		—		—		4,143		4,143		4,237,011		4,241,154
Construction
Speculative (1)		—		—		—		—		12,151		12,151
Non-speculative		—		—		—		—		25,661		25,661
SBA		30		—		21		51		282,350		282,401
Commercial and industrial		261		—		478		739		972,892		973,631
Dairy & livestock and agribusiness		—		—		—		—		431,577		431,577
Municipal lease finance receivables		—		—		—		—		59,542		59,542
SFR mortgage		—		—		—		—		281,766		281,766
Consumer and other loans		—		—		—		—		58,069		58,069
Total loans at amortized cost	$	3,178	$	—	$	4,685	$	7,863	$	8,691,330	$	8,699,193

(1)

Speculative construction loans are generally for properties where there is no identified buyer or renter.

It is the Company's policy to discontinue accruing interest when principal or interest payments are 90 days or more past due, unless the loan is both well secured and in the process of collection, or when full collection of principal and interest is not expected. The following table presents nonaccrual loans, including loans with no related allowance for credit losses, by loan type as of September 30, 2026 and December 31, 2025.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table presents the recorded investment in collateral-dependent loans by type of loans as of the dates presented.

The allowance for off-balance sheet credit exposure relates to unfunded loan commitments, letters of credit, and undisbursed funds on lines of credit and is recorded in other liabilities on the consolidated balance sheets, with the related expense recorded in other noninterest expense. The Company estimates expected credit losses associated with off-balance sheet credit exposures using a methodology consistent with that used for the loan portfolio. As of September 30, 2026 and December 31, 2025, the reserve for unfunded loan commitments was $13.0 million and $8.3 million, respectively. The increase was primarily attributable to a $4.3 million initial reserve established for the unfunded commitments acquired in the Heritage acquisition through the provision for unfunded loan commitments. There was no provision and a $4.8 million provision for unfunded loan commitments, respectively, for the three and nine months ended September 30, 2026, compared to $500,000 and a $1.0 million provision for the three and nine months ended September 30, 2025, respectively.

During the three and nine months ended September 30, 2026, there were no modified loans that subsequently defaulted within 12 months of the modification date. During the three and nine months ended September 30, 2025, a commercial real estate loan with an amortized cost of $244,300 subsequently defaulted within 12 months after the loan was modified through a term extension. Loans are considered to be in payment default at 90 or more days past due.