Subordinated debentures issued in connection with three separate trust preferred securities totaled $15.5 million and $15.4 million as of September 30, 2026 and December 31, 2025. Pursuant to the terms of our subordinated debentures, we are not permitted to declare or pay any dividends on our capital stock if an event of default occurs under the terms of the subordinated debentures. In addition, we have the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years. The subordinated debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. We may redeem the subordinated debentures, subject to prior approval by the Board of Governors of the Federal Reserve System at 100% of

the principal amount, plus accrued and unpaid interest. These subordinated debentures consist of the following at September 30, 2026 and are described in detail after the table below:


	Issue Date	Principal Amount		Unamortized Valuation Reserve		Recorded Value		Stated Rate Description	Effective Stated Rate		Stated Maturity
Subordinated debentures:	(dollars in thousands)
TFC Trust	12/22/2006	$	5,155	$	941	$	4,214	Three-month CME Term SOFR plus 0.26% plus 1.65%	5.81	%	3/15/2037
FAIC Trust	12/15/2004	7,217		630		6,587		Three-month CME Term SOFR plus 0.26% plus 2.25%	6.41	%	12/15/2034
PGBH Trust	12/15/2004	5,155		418		4,737		Three-month CME Term SOFR plus 0.26% plus 2.10%	6.26	%	12/15/2034
Total		$	17,527	$	1,989	$	15,538

In 2016, we acquired TFC Statutory Trust (the “TFC Trust”) through the acquisition of Tomato Bank and its holding company, TFC Holding Company. At the close of this acquisition, a $1.9 million valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security. The unamortized valuation reserve was $941,000 at September 30, 2026 and $1.0 million at December 31, 2025. The subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 1.65%, which was 5.81% as of September 30, 2026 and 5.63% at December 31, 2025.

In October 2018, we acquired First American International Statutory Trust I (“FAIC Trust”) through the acquisition of First American International Corp. (“FAIC”). At the close of this acquisition, a $1.2 million valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security. The unamortized valuation reserve was $630,000 at September 30, 2026 and $688,000 at December 31, 2025. The subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 2.25%, which was 6.41% as of September 30, 2026 and 6.23% at December 31, 2025.

In January 2020, we acquired Pacific Global Bank Trust I (“PGBH Trust”) through the acquisition of PGB Holdings, Inc. At the close of this acquisition, a $763,000 valuation reserve was recorded to arrive at its fair market value, which is treated as a yield adjustment and amortized over the life of the security. The unamortized valuation reserve was $418,000 at September 30, 2026 and $456,000 at December 31, 2025. The subordinated debentures have a variable rate of interest equal to three-month CME Term SOFR plus applicable tenor spread adjustment of 0.26% plus 2.10%, which was 6.26% as of September 30, 2026 and 6.08% at December 31, 2025.

We recognized interest expense on the subordinated debentures of $260,000, $255,000, and $285,000 for the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $770,000 and $850,000 for the nine months ended September 30, 2026 and 2025. The aggregate amount of amortization expense was $55,000 for each of the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, and $165,000 for each of the nine months ended September 30, 2026 and 2025. We were in compliance with all covenants under the subordinated debentures as of September 30, 2026.

For regulatory reporting purposes, the Federal Reserve has indicated that the capital of trust preferred securities qualify as Tier 1 capital of the Company subject to previously specified limitations (including that the asset size of the issuer did not exceed $15 billion). If regulators make a determination that the capital securities can no longer be considered in regulatory capital, the securities become callable and we may redeem them.