The following discussion presents management’s perspective on our results of operations and financial condition on a consolidated basis. However, because we conduct all of our material business operations through our bank subsidiary, Five Star Bank, the discussion and analysis relate to activities primarily conducted by the Bank. Management’s discussion of the financial condition and results of operations, which is unaudited, should be read in conjunction with the related unaudited consolidated financial statements and accompanying notes in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and accompanying notes included in the 2025 Annual Report on Form 10-K, which was filed with the SEC on February 27, 2026. Average balances, including balances used in calculating certain financial ratios, are generally comprised of average daily balances. Unless otherwise indicated, references in this report to “we,” “our,” “us,” “the Company,” or “Bancorp” refer to Five Star Bancorp and our consolidated subsidiary. All references to “the Bank” refer to Five Star Bank, our wholly owned subsidiary. Cautionary Note Regarding Forward-Looking Statements This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of our beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phrases of similar meaning. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Such forward-looking statements are based on various assumptions (some of which may be beyond our control) and are subject to risks and uncertainties, which change over time, and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to: •risks related to the concentration of our business in California, and specifically within Northern California, including risks associated with any downturn in the real estate sector; •changes in market interest rates that affect the pricing of our loans and deposits, our net interest income, and our borrowers’ ability to repay loans; •changes in the U.S. economy, including an economic slowdown, recession, inflation, deflation, tariffs, housing prices, employment levels, rate of growth, and general business conditions; •uncertain market conditions and economic trends nationally, regionally, and particularly in Northern California and California; •the soundness of other financial institutions and the impacts related to or resulting from bank failures and other economic and industry volatility, including increased regulatory requirements and costs and potential impacts to macroeconomic conditions; •the impact of recent and future legislative and regulatory changes, including changes in banking, securities, and tax laws and regulations and their application by our regulators; •the effects of increased competition from a wide variety of local, regional, national, and other providers of financial and investment services; •the risks associated with our loan portfolios, and specifically with our commercial real estate loans; •our ability to maintain adequate liquidity and to maintain capital necessary to fund our growth strategy and operations and to satisfy minimum regulatory capital levels; •risks related to our strategic focus on lending to small to medium-sized businesses; •the sufficiency of the assumptions and estimates we make in establishing reserves for potential credit losses and the value of loan collateral and securities; •our level of nonperforming assets and the costs associated with resolving problem loans, if any; 34 •our ability to comply with various governmental and regulatory requirements applicable to financial institutions, including supervisory actions by federal and state banking agencies; •governmental monetary and fiscal policies, including the policies of the Federal Reserve; •risks associated with unauthorized access, cybersecurity breaches, cyber-crime, and other threats and disruptions to data security; •our ability to implement, maintain, and improve an effective risk management framework, disclosure controls and procedures, and internal controls over financial reporting; •our ability to adopt and successfully integrate new initiatives or technologies into our business in a strategic manner; •our ability to attract and retain executive officers and key employees and their customer and community relationships; •the impact of any future U.S. federal government shutdown and uncertainty regarding the U.S. federal government’s debt limit and credit rating; •the occurrence or impact of climate change or natural or man-made disasters or calamities, such as wildfires, droughts, mudslides, floods, and earthquakes, and particularly in California, and specifically Northern California; •changes in and impact of local, regional, and global business, economic, and political conditions and geopolitical events, such as pandemics, civil unrest, wars, and acts of terrorism; and •other factors that are discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The foregoing factors could cause results or performance to materially differ from those expressed in our forward-looking statements, should not be considered exhaustive, and should be read together with other cautionary statements that are included in this report and those discussed in the section entitled “Risk Factors” of our 2025 Annual Report on Form 10-K, our Quarterly Report on Form 10-Q for the three months ended March 31, 2026, and other filings we may make with the SEC, copies of which are available from us at no charge. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurrence or how they will affect us. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this Quarterly Report on Form 10-Q. Therefore, we caution you not to place undue reliance on our forward-looking information and statements. We disclaim any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law. Company Overview Headquartered in the greater Sacramento metropolitan area of California, Five Star Bancorp is a bank holding company that operates through its wholly owned subsidiary, Five Star Bank, a California state-chartered non-member bank. We provide a broad range of banking products and services to small and medium-sized businesses, professionals, and individuals primarily in California through nine branch offices, with a tenth branch opening in Lodi in July 2026. Our mission is to strive to become the top business bank in all markets we serve through exceptional service, deep connectivity, and customer empathy. We are dedicated to serving real estate, agricultural, faith-based, and small to medium-sized enterprises. We aim to consistently deliver value that meets or exceeds the expectations of our shareholders, customers, employees, business partners, and community. We refer to our mission as “purpose-driven and integrity-centered banking.” At June 30, 2026, we had total assets of $5.4 billion, total loans held for investment of $4.5 billion, and total deposits of $4.8 billion. Critical Accounting Estimates The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Quarterly Reports on Form 10-Q and, therefore, do not include all footnotes as would be necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows in conformity with GAAP as contained within the FASB’s ASC and the rules and regulations of the SEC, including the instructions to Regulation S-X. However, these interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on 35 a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as filed in our 2025 Annual Report on Form 10-K and the notes thereto. Our most significant accounting policies and our critical accounting estimates are described in greater detail in Note 1, Basis of Presentation, in our audited consolidated financial statements and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates included in our 2025 Annual Report on Form 10-K. We have identified accounting policies and estimates that, due to the difficult, subjective, or complex judgments and assumptions inherent in those policies and estimates and the potential sensitivity of our unaudited consolidated financial statements to those judgments and assumptions, are critical to an understanding of our consolidated financial condition and results of operations. We believe that the judgments, estimates, and assumptions used in the preparation of our financial statements are reasonable and appropriate, based on the information available at the time they were made. However, actual results may differ from those estimates, and these differences may be material. With the exception of the changes to the allowance for credit losses described below, there have been no significant changes concerning our critical accounting estimates as described in our 2025 Annual Report on Form 10-K. Pursuant to the JOBS Act, as an emerging growth company, we can elect to opt out of the extended transition period for adopting any new or revised accounting standards. We have elected not to opt out of the extended transition period, which means that when a standard is issued or revised and it has different application dates for public and private companies, we may adopt the standard on the application date for private companies. However, we may early adopt certain accounting standards, as the JOBS Act does not preclude an emerging growth company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies to the extent early adoption is permitted. We have elected to take advantage of the scaled disclosures and other relief under the JOBS Act, and we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us under the JOBS Act, so long as we qualify as an emerging growth company. Allowance for Credit Losses The allowance for credit losses represents the estimated expected credit losses in our loan and investment portfolios and is estimated as of June 30, 2026 using Current Expected Credit Loss (“CECL”). The allowance for credit losses is established through a provision for credit losses charged to operations. Loans and investments are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Subsequent recoveries of previously charged-off amounts, if any, are credited to the allowance for credit losses. The allowance for credit losses is evaluated on a regular basis by management in consideration of optimistic, moderate, and pessimistic current conditions, and is based on management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, prevailing economic conditions specifically impacting each loan type by purpose and by geography, and concentrations within the loan portfolio. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. A significant amount of the allowance for credit losses is measured on a collective (pool) basis by loan and investment security type when similar risk characteristics exist. Pools are determined based primarily on regulatory reporting codes as the loans and investment securities within each pool share similar risk characteristics and there is sufficient historical peer loss data from the Federal Financial Institutions Examination Council (“FFIEC”) to provide statistically meaningful support in the models developed. Reserves for credit losses identified on a pooled basis are then adjusted for qualitative factors to reflect current conditions. The most significant components of the qualitative factors used to estimate the allowance for credit losses are adjustments relating to prevailing economic conditions, concentrations within the loan portfolio, and external factors. These qualitative factors are subject to significant judgment and carry a higher degree of uncertainty. The prevailing economic conditions factor is estimated based on a range of potential economic conditions and is applied at both the portfolio and individual concentration level based on various factors. The factor concerning concentrations within the loan portfolio is estimated based on concentrations at the loan pool level. The external factor is estimated based on current external factors, such as environmental factors, which could impact the loan portfolio. 36 Executive Summary Net income for the three and six months ended June 30, 2026 totaled $19.4 million and $38.0 million, respectively, as compared to net income of $14.5 million and $27.6 million for the three and six months ended June 30, 2025, respectively. The following are highlights of our operating and financial performance, and financial condition for the dates and periods presented: •Deposits. Total deposits increased by $598.3 million, or 14.24%, from $4.2 billion at December 31, 2025 to $4.8 billion at June 30, 2026. Non-wholesale deposits increased by $813.3 million in the first six months of 2026 to $4.5 billion at June 30, 2026. Wholesale deposits, which the Company defines as brokered deposits and California Time Deposit Program deposits, decreased by $215.0 million in the first six months of 2026 to $250.0 million. Non-interest-bearing deposits increased by $89.9 million in the first six months of 2026 to $1.2 billion, and represented 24.47% of total deposits at June 30, 2026, as compared to 25.82% of total deposits at December 31, 2025. Our loan to deposit ratio was 94.17% at June 30, 2026, as compared to 97.00% at December 31, 2025. •Assets. Total assets were $5.4 billion at June 30, 2026, representing a $622.2 million, or 13.09%, increase compared to $4.8 billion at December 31, 2025. •Loans. Total loans held for investment were $4.5 billion at June 30, 2026, as compared to $4.1 billion at December 31, 2025, an increase of $444.8 million, or 10.91%. The increase was a result of $1.0 billion in loan originations and advances, partially offset by $162.1 million and $421.9 million in loan payoffs and paydowns, respectively. •Credit Quality. Credit quality remains strong, with non-accrual loans representing $13.4 million, or 0.30% of total loans held for investment at June 30, 2026, as compared to $3.1 million, or 0.08% of total loans held for investment at December 31, 2025. This increase was due to a $10.3 million, or 331.20% increase in nonperforming loans due to one Community Reinvestment Act loan that was placed on non-accrual status during the period. The balance of the loan is $11.4 million as of June 30, 2026, and it was originally downgraded to substandard in 2025. This was partially offset by improvements across the remainder of the nonperforming loan portfolio. The ratio of the allowance for credit losses to total loans held for investment was 1.05% at June 30, 2026 and 1.09% at December 31, 2025. •Net Interest Margin. Net interest margin was 3.63% and 3.66%, respectively, for the three and six months ended June 30, 2026, and 3.53% and 3.49%, respectively, for the three and six months ended June 30, 2025. The increase in net interest margin for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 is driven by balance sheet growth and a favorable shift in funding mix, which more than offset pressure from declining federal funds rates over the periods. •Efficiency Ratio. Efficiency ratio was 40.91% for the three months ended June 30, 2026, down from 41.03% for the corresponding period of 2025, mainly due to a $9.6 million, or 26.20%, increase in net interest income during the same period, partially offset by a $3.9 million, or 24.74%, increase in non-interest expense. Additionally, efficiency ratio was 39.77% for the six months ended June 30, 2026, down from 41.77% for the corresponding period of 2025, mainly due to a $19.0 million, or 27.02%, increase in net interest income. •Capital Ratios. All capital ratios were above well-capitalized regulatory thresholds as of June 30, 2026. The total risk-based capital ratio for the Company was 12.50% at June 30, 2026, as compared to 13.33% at December 31, 2025. The Tier 1 leverage ratio was 9.21% at June 30, 2026, as compared to 9.70% at December 31, 2025. For additional information about the regulatory capital requirements applicable to the Company and the Bank, see the section entitled “—Financial Condition Summary—Capital Adequacy” below. •Dividends. The board of directors declared a cash dividend of $0.25 per share on April 16, 2026. 37 Highlights of our financial results are presented in the following tables: Table 1: Highlights of Financial Results (dollars in thousands) June 30, 2026 December 31, 2025 Selected financial condition data: Total assets $ 5,377,062 $ 4,754,861 Total loans held for investment 4,519,681 4,074,929 Total deposits 4,799,383 4,201,084 Total subordinated notes, net 74,114 74,041 Total shareholders’ equity 473,771 445,832 Asset quality ratios: Allowance for credit losses to total loans held for investment 1.05 % 1.09 % Allowance for credit losses to nonperforming loans 354.57 % 1,434.40 % Nonperforming loans to total loans held for investment 0.30 % 0.08 % Capital ratios: Total capital (to risk-weighted assets) 12.50 % 13.33 % Tier 1 capital (to risk-weighted assets) 9.97 % 10.58 % Common equity Tier 1 capital (to risk-weighted assets) 9.97 % 10.58 % Tier 1 leverage 9.21 % 9.70 % Total shareholders’ equity to total assets 8.81 % 9.38 % Tangible shareholders’ equity to tangible assets1 8.81 % 9.38 % Table 2: Highlights of Financial Results (continued) For the three months ended For the six months ended (dollars in thousands, except per share data) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Selected operating data: Net interest income $ 46,083 $ 36,515 $ 89,540 $ 70,492 Provision for credit losses 2,250 2,500 4,925 4,400 Non-interest income 1,872 1,810 3,515 3,169 Non-interest expense 19,616 15,726 37,010 30,771 Net income 19,399 14,508 38,020 27,619 Per common share data: Earnings per common share: Basic $ 0.91 $ 0.68 $ 1.79 $ 1.30 Diluted $ 0.91 $ 0.68 $ 1.78 $ 1.30 Book value per share $ 22.14 $ 19.51 $ 22.14 $ 19.51 Tangible book value per share2 $ 22.14 $ 19.51 $ 22.14 $ 19.51 Performance and other financial ratios: Return on Average Assets, annualized (“ROAA”) 1.49 % 1.37 % 1.52 % 1.33 % Return on Average Equity, annualized (“ROAE”) 16.67 % 14.17 % 16.70 % 13.73 % Net interest margin 3.63 % 3.53 % 3.66 % 3.49 % Total cost of funds3 2.23 % 2.53 % 2.22 % 2.55 % Efficiency ratio 40.91 % 41.03 % 39.77 % 41.77 % Cash dividend payout ratio on common stock4 27.47 % 29.41 % 27.93 % 30.77 % 38 1Tangible shareholders’ equity to tangible assets is considered a non-GAAP financial measure. See the section entitled “Non-GAAP Financial Measures” for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measure. Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated. 2Tangible book value per share is considered a non-GAAP financial measure. See the section entitled “Non-GAAP Financial Measures” for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measure. Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated. 3Total cost of funds reflects the average cost of all funding sources, including both interest-bearing and non-interest-bearing deposits and borrowings. 4Cash dividend payout ratio on common stock is calculated as dividends on common shares divided by basic earnings per common share. 39 RESULTS OF OPERATIONS The following discussion of our results of operations compares the three and six months ended June 30, 2026 to the three and six months ended June 30, 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2026. Net Interest Income Net interest income is the most significant contributor to our net income. Net interest income represents interest income from interest-earning assets, such as loans and investments, less interest expense on interest-bearing liabilities, such as deposits, subordinated notes, and other borrowings, which are used to fund those assets. In evaluating our net interest income, we measure and monitor yields/rates on our interest-earning assets and interest-bearing liabilities as well as trends in our net interest margin. Net interest margin is a ratio calculated as net interest income divided by total interest-earning assets for the same period. We manage our earning assets and funding sources in order to maximize this margin while limiting credit risk and interest rate sensitivity to our established risk appetite levels. Changes in market interest rates and competition in our market typically have the largest impact on periodic changes in our net interest margin. Three months ended June 30, 2026 compared to three months ended June 30, 2025 Net interest income increased by $9.6 million, or 26.20%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, and our net interest margin increased by 10 basis points during the same period. The increase in net interest income is primarily due to an increase in interest income driven by loan growth and higher interest-earning deposits in banks, partially offset by an increase in interest expense driven by deposit growth, though moderated by a decrease in the average cost of deposits. Additional detail relating to net interest margin in each period is provided below. 40 Average balance sheet, interest, and yield/rate analysis. Table 3 presents average balance sheet information, interest income, interest expense, and the corresponding average yield earned or rate paid for each period reported. The average balances are daily averages and include both performing and nonperforming loans. Table 3: Average Balances, Interest, and Yield/Rate For the three months endedJune 30, 2026 For the three months endedJune 30, 2025 (dollars in thousands) Average Balance Interest Income/Expense Average Yield/Rate Average Balance Interest Income/Expense Average Yield/Rate Assets Interest-earning deposits in banks1 $ 677,149 $ 6,253 3.70 % $ 361,866 $ 3,987 4.42 % Investment securities1,2 93,553 509 2.18 % 97,886 577 2.37 % Loans held for investment and sale1,3 4,328,304 65,565 6.08 % 3,691,616 56,016 6.09 % Total interest-earning assets1 5,099,006 72,327 5.69 % 4,151,368 60,580 5.85 % Interest receivable and other assets, net4 123,354 101,632 Total assets $ 5,222,360 $ 4,253,000 Liabilities and shareholders’ equity Interest-bearing transaction accounts1 $ 389,136 $ 1,297 1.34 % $ 283,369 $ 1,043 1.48 % Savings accounts1 143,818 844 2.35 % 121,692 801 2.64 % Money market accounts1 2,556,482 19,318 3.03 % 1,647,628 13,270 3.23 % Time accounts1 396,923 3,623 3.66 % 726,295 7,790 4.30 % Subordinated notes and other borrowings1 74,091 1,162 6.29 % 73,967 1,161 6.30 % Total interest-bearing liabilities 3,560,450 26,244 2.96 % 2,852,951 24,065 3.38 % Demand accounts 1,163,991 957,034 Interest payable and other liabilities 31,140 32,406 Shareholders’ equity 466,779 410,609 Total liabilities and shareholders’ equity $ 5,222,360 $ 4,253,000 Net interest spread5 2.73 % 2.47 % Net interest income/margin6 $ 46,083 3.63 % $ 36,515 3.53 % 1Interest income/expense is divided by the actual number of days in the period multiplied by the actual number of days in the year to correspond to stated interest rate terms, where applicable. 2Yields on available-for-sale securities are calculated based on fair value. Investment security interest is earned monthly on a 30/360 day basis. Yields are not calculated on a tax-equivalent basis. 3Non-accrual loans are included in total loan balances. No adjustment has been made for these loans in the yield calculations. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. Allowance for credit losses is not included in total loan balances. 4Allowance for credit losses is included in interest receivable and other assets, net. 5Net interest spread represents the average yield earned on interest-earning assets minus the average rate paid on interest-bearing liabilities. 6Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of interest-earning assets, then annualized based on the number of days in the given period. 41 Analysis of changes in interest income and expenses. Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average yields/rates. Table 4 shows the effect that these factors had on the interest earned from our interest-earning assets and interest incurred on our interest-bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the current period’s average yield/rate. The effect of rate changes is calculated by multiplying the change in average yield/rate by the previous period’s volume. Changes not solely attributable to volume or yields/rates have been allocated in proportion to the respective volume and yield/rate components. Table 4: Interest Income and Expense Change Analysis For the three months endedJune 30, 2026 compared tothe three months ended June 30, 2025 (dollars in thousands) Volume Yield/Rate Total Increase (Decrease) Interest-earning deposits in banks $ 2,912 $ (646) $ 2,266 Investment securities (24) (44) (68) Loans held for investment and sale 9,644 (95) 9,549 Total interest-earning assets 12,532 (785) 11,747 Interest-bearing transaction accounts 353 (99) 254 Savings accounts 130 (87) 43 Money market accounts 6,867 (819) 6,048 Time accounts (3,008) (1,159) (4,167) Subordinated notes and other borrowings 3 (2) 1 Total interest-bearing liabilities 4,345 (2,166) 2,179 Changes in net interest income/margin $ 8,187 $ 1,381 $ 9,568 As compared to the three months ended June 30, 2025, net interest income during the three months ended June 30, 2026 increased by $9.6 million, or 26.20%, to $46.1 million from $36.5 million. Net interest margin totaled 3.63% for the three months ended June 30, 2026, an increase of 10 basis points compared to the same quarter of the prior year. The improvement was driven by balance sheet growth and a favorable shift in funding mix, which more than offset pressure from declining federal funds rates over the same period. The increase in net interest income is primarily attributable to an $11.7 million increase in interest income, mainly due to a $636.7 million, or 17.25%, increase in the average balance of loans and a $315.3 million, or 87.13%, increase in the average balance of interest-earning deposits in banks (deposits placed with other financial institutions to earn interest). This increase in interest income was partially offset by a $2.2 million increase in interest expense, stemming from a $914.3 million, or 24.47%, increase in the average balance of deposits during the three months ended June 30, 2026, moderated by a 30 basis point decrease in average cost of deposits compared to the same quarter of the prior year. Further supporting the decreasing average cost of deposits, the average balance of non-interest-bearing deposits increased by $207.0 million, or 21.62%, compared to the same period of the prior year. Six months ended June 30, 2026 compared to six months ended June 30, 2025 Net interest income increased by $19.0 million, or 27.02%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, and our net interest margin increased by 17 basis points when compared to the same period in 2025. The increase in net interest income is primarily attributable to an increase in interest income driven by loan growth, partially offset by an increase in interest expense driven by deposit growth. Additional detail relating to net interest margin in each period is provided below. 42 Average balance sheet, interest, and yield/rate analysis. Table 5 presents average balance sheet information, interest income, interest expense, and the corresponding average yield earned or rate paid for each period reported. The average balances are daily averages and include both performing and nonperforming loans. Table 5: Average Balances, Interest, and Yield/Rate (dollars in thousands) For the six months endedJune 30, 2026 For the six months ended June 30, 2025 Average Balance Interest Income/Expense Average Yield/Rate Average Balance Interest Income/Expense Average Yield/Rate Assets Interest-earning deposits in banks1 $ 595,184 $ 10,940 3.71 % $ 345,310 $ 7,562 4.42 % Investment securities1,2 95,161 1,053 2.23 % 99,173 1,158 2.35 % Loans held for investment and sale1,3 4,239,866 127,681 6.07 % 3,630,146 108,947 6.05 % Total interest-earning assets1 4,930,211 139,674 5.71 % 4,074,629 117,667 5.82 % Interest receivable and other assets, net4 121,173 97,610 Total assets $ 5,051,384 $ 4,172,239 Liabilities and shareholders’ equity Interest-bearing transaction accounts1 $ 366,525 $ 2,430 1.34 % $ 293,539 $ 2,155 1.48 % Savings accounts1 140,987 1,674 2.39 % 122,641 1,573 2.59 % Money market accounts1 2,371,940 35,168 2.99 % 1,594,548 25,705 3.25 % Time accounts1 463,606 8,539 3.71 % 716,466 15,419 4.34 % Subordinated notes and other borrowings1 74,082 2,323 6.32 % 73,938 2,323 6.34 % Total interest-bearing liabilities 3,417,140 50,134 2.96 % 2,801,132 47,175 3.40 % Demand accounts 1,143,142 934,121 Interest payable and other liabilities 31,935 31,403 Shareholders’ equity 459,167 405,583 Total liabilities and shareholders’ equity $ 5,051,384 $ 4,172,239 Net interest spread5 2.75 % 2.42 % Net interest income/margin6 $ 89,540 3.66 % $ 70,492 3.49 % 1Interest income/expense is divided by the actual number of days in the period multiplied by the actual number of days in the year to correspond to stated interest rate terms, where applicable. 2Yields on available-for-sale securities are calculated based on fair value. Investment security interest is earned monthly on a 30/360 day basis. Yields are not calculated on a tax-equivalent basis. 3Non-accrual loans are included in total loan balances. No adjustment has been made for these loans in the yield calculations. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. Allowance for credit losses is not included in total loan balances. 4Allowance for credit losses is included in interest receivable and other assets, net. 5Net interest spread represents the average yield earned on interest-earning assets minus the average rate paid on interest-bearing liabilities. 6Net interest margin is computed by calculating the difference between interest income and interest expense, divided by the average balance of interest-earning assets, then annualized based on the number of days in the given period. 43 Analysis of changes in interest income and expenses. Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average yields/rates. Table 6 shows the effect that these factors had on the interest earned from our interest-earning assets and interest incurred on our interest-bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the current period’s average yield/rate. The effect of rate changes is calculated by multiplying the change in average yield/rate by the previous period’s volume. Changes not solely attributable to volume or yields/rates have been allocated in proportion to the respective volume and yield/rate components. Table 6: Interest Income and Expense Change Analysis (In thousands) For the six months ended June 30, 2026 compared to the six months ended June 30, 2025 Volume Yield/Rate Total Increase (Decrease) Interest-earning deposits in banks $ 4,593 $ (1,215) $ 3,378 Investment securities (44) (61) (105) Loans held for investment and sale 18,361 373 18,734 Total interest-earning assets 22,910 (903) 22,007 Interest-bearing transaction accounts 484 (209) 275 Savings accounts 218 (117) 101 Money market accounts 11,525 (2,062) 9,463 Time accounts (4,657) (2,223) (6,880) Subordinated notes and other borrowings 5 (5) — Total interest-bearing liabilities 7,575 (4,616) 2,959 Changes in net interest income/margin $ 15,335 $ 3,713 $ 19,048 As compared to the six months ended June 30, 2025, net interest income during the six months ended June 30, 2026 increased by $19.0 million, or 27.02%, to $89.5 million from $70.5 million. Net interest margin totaled 3.66% for the six months ended June 30, 2026, an increase of 17 basis points compared to the same period of the prior year. The improvement was driven by balance sheet growth and a favorable shift in funding mix, which more than offset pressure from declining federal funds rates over the same period. The increase in net interest income is primarily attributable to a $22.0 million increase in interest income, mainly due to a $609.7 million, or 16.80%, increase in the average balance of loans and a $249.9 million, or 72.36%, increase in the average balance of interest-earning deposits in banks. This increase in interest income was partially offset by a $3.0 million increase in interest expense, stemming from a $615.9 million, or 22.58%, increase in the average balance of interest-bearing deposits during the six months ended June 30, 2026, moderated by a 44 basis point decrease in the cost of interest-bearing deposits compared to the same period of the prior year. Further supporting the decreasing average cost of funds, the average balance of non-interest-bearing deposits increased by $209.0 million, or 22.38%, compared to the same period of the prior year. Provision for Credit Losses The provision for credit losses is based on management’s assessment of the adequacy of our allowance for credit losses. Factors impacting the provision include inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of the change in collateral values, and the funding probability on unfunded lending commitments. The provision for credit losses is charged against earnings in order to maintain our allowance for credit losses, which reflects management’s best estimate of expected life of loan losses in our loan portfolio at the balance sheet date. Three months ended June 30, 2026 compared to three months ended June 30, 2025 We recorded a $2.3 million provision for credit losses in the second quarter of 2026, compared to a $2.5 million provision for credit losses for the same period of 2025. The decrease in the provision for credit losses in the second quarter of 2026 is mainly due to lower net charge-offs in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. 44 Six months ended June 30, 2026 compared to six months ended June 30, 2025 We recorded a $4.9 million provision for credit losses in the first six months of 2026, as compared to a $4.4 million provision for credit losses for the same period of 2025. The increase in the provision for credit losses recorded during the first six months of 2026 is mainly due to increases in loan growth and an overall increase in loss rates, partially offset by lower charge-offs. Non-interest Income Non-interest income is a secondary contributor to our net income, following interest income. Non-interest income consists of service charges on deposit accounts, gain on sale of loans, loan-related fees, FHLB stock dividends, earnings on BOLI, and other income. Three months ended June 30, 2026 compared to three months ended June 30, 2025 Table 7 details the components of non-interest income for the periods indicated. Table 7: Non-interest Income For the three months ended (dollars in thousands) June 30, 2026 June 30, 2025 $ Change % Change Service charges on deposit accounts $ 122 $ 196 $ (74) (37.76) % Gain on sale of loans — 119 (119) (100.00) % Loan-related fees 679 468 211 45.09 % FHLB stock dividends 191 325 (134) (41.23) % Earnings on BOLI 265 220 45 20.45 % Other 615 482 133 27.59 % Total non-interest income $ 1,872 $ 1,810 $ 62 3.43 % Gain on sale of loans. The decrease related to an overall decline in the volume of SBA loans sold due to a strategic, intentional reduction in originations of loans held for sale. During the three months ended June 30, 2026, no SBA loans were sold, as compared to approximately $1.6 million of loans sold with an effective yield of 7.60% during the three months ended June 30, 2025. Loan-related fees. The increase resulted primarily from an increase of $0.1 million in loan referral income, combined with an increase of $0.1 million in fees from swap referrals during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. FHLB stock dividends. The decrease related primarily to the FHLB’s transition to a tier-based dividend structure, which lowered the Bank’s effective dividend rate received. Other. The increase related primarily to an overall improvement in earnings related to investments in venture-backed funds during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. 45 Six months ended June 30, 2026 compared to six months ended June 30, 2025 Table 8 details the components of non-interest income for the periods indicated. Table 8: Non-interest Income For the six months ended (dollars in thousands) June 30, 2026 June 30, 2025 $ Change % Change Service charges on deposit accounts $ 257 $ 411 $ (154) (37.47) % Gain on sale of loans — 244 (244) (100.00) % Loan-related fees 1,944 916 1,028 112.23 % FHLB stock dividends 953 656 297 45.27 % Earnings on BOLI 490 381 109 28.61 % Other (129) 561 (690) (122.99) % Total non-interest income $ 3,515 $ 3,169 $ 346 10.92 % Service charges on deposit accounts. The decrease related primarily to a $0.2 million decrease in service charges assessed on analyzed deposit accounts. Gain on sale of loans. The decrease related primarily to an overall decline in the volume of SBA loans sold due to a strategic, intentional reduction in originations of loans held for sale. During the six months ended June 30, 2026, no SBA loans were sold, as compared to approximately $3.3 million of SBA loans sold with an effective yield of 7.41% during the six months ended June 30, 2025. Loan-related fees. The increase related primarily to a $0.9 million increase in fees from swap referrals and a $0.1 million increase in loan referral income. FHLB stock dividends. The increase related primarily to a $0.4 million special cash dividend from the FHLB during the six months ended June 30, 2026, partially offset by a decrease in dividends related to the FHLB’s transition to a tier-based dividend structure, which lowered the Bank’s effective dividend rate received. Earnings on BOLI. The increase related primarily to an increase in BOLI balances between June 30, 2025 and June 30, 2026 due to the addition of a new policy. Other. The decrease related primarily to an overall loss in earnings related to equity investments in venture-backed funds during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Non-interest Expense Non-interest expense includes salaries and employee benefits, occupancy and equipment, data processing and software, FDIC insurance, professional services, advertising and promotional, loan-related expenses, and other operating expenses. In evaluating our level of non-interest expense, we closely monitor the Company’s efficiency ratio, which is calculated as non-interest expense divided by the sum of net interest income and non-interest income. We constantly seek to identify ways to streamline our business and operate more efficiently in order to reduce our non-interest expense over time as a percentage of our revenue, while continuing to achieve growth in total loans and assets. Over the past several years, we have continued to invest significant resources in personnel, technology, and infrastructure. As we execute initiatives based on growth, we expect non-interest expense to continue to grow. Non-interest expense has increased throughout the periods presented below; however, we expect our efficiency ratio will continue to improve going forward due, in part, to our past investment in infrastructure. 46 Three months ended June 30, 2026 compared to three months ended June 30, 2025 Table 9 details the components of non-interest expense for the periods indicated. Table 9: Non-interest Expense For the three months ended (dollars in thousands) June 30, 2026 June 30, 2025 $ Change % Change Salaries and employee benefits $ 11,421 $ 8,910 $ 2,511 28.18 % Occupancy and equipment 873 657 216 32.88 % Data processing and software 1,709 1,508 201 13.33 % FDIC insurance 585 470 115 24.47 % Professional services 952 918 34 3.70 % Advertising and promotional 959 865 94 10.87 % Loan-related expenses 304 423 (119) (28.13) % Other operating expenses 2,813 1,975 838 42.43 % Total non-interest expense $ 19,616 $ 15,726 $ 3,890 24.74 % Salaries and employee benefits. The increase related primarily to: (i) a $2.8 million increase in salaries, benefits, and bonus expense, mainly related to a 13.30% increase in headcount between June 30, 2025 and June 30, 2026; and (ii) a $0.7 million increase in commissions primarily due to higher loan originations period-over-period. This increase was partially offset by a $0.9 million increase in deferred loan origination costs due to higher loan originations period-over-period. Occupancy and equipment. The increase was primarily due to expenses for the Walnut Creek branch office and Newport Beach non-depository office during the three months ended June 30, 2026, which did not exist for the three months ended June 30, 2025. Data processing and software. The increase was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system. FDIC insurance. The increase was primarily due to a $916.2 million increase in the assessment base period-over-period. Loan-related expenses. The decrease related primarily to lower inspection and legal expenses. Although loan originations were higher period-over-period, a greater mix of purchased loans and large credit relationships reduced per-unit inspection costs, and inspection activity was delayed relative to the prior period. Other operating expenses. The increase related primarily to: (i) a $0.3 million increase in employee-related expenses such as travel and professional association memberships; (ii) a $0.2 million increase in bank charges; (iii) a $0.1 million increase in operational losses; (iv) a $0.1 million increase in IntraFi Network fees resulting from an overall increase in balances carried in the network; and (v) a $0.1 million increase in armored car and courier services. 47 Six months ended June 30, 2026 compared to six months ended June 30, 2025 Table 10 details the components of non-interest expense for the periods indicated. Table 10: Non-interest Expense For the six months ended (dollars in thousands) June 30, 2026 June 30, 2025 $ Change % Change Salaries and employee benefits $ 22,851 $ 18,044 $ 4,807 26.64 % Occupancy and equipment 1,702 1,294 408 31.53 % Data processing and software 3,260 2,965 295 9.95 % FDIC insurance 1,130 925 205 22.16 % Professional services 1,878 1,831 47 2.57 % Advertising and promotional 1,703 1,387 316 22.78 % Loan-related expenses 551 742 (191) (25.74) % Other operating expenses 3,935 3,583 352 9.82 % Total non-interest expense $ 37,010 $ 30,771 $ 6,239 20.28 % Salaries and employee benefits. The increase was primarily a result of: (i) a $5.1 million increase in salaries, benefits, and bonus expense, mainly related to a 13.30% increase in headcount between June 30, 2025 and June 30, 2026; and (ii) a $1.2 million increase in commissions primarily due to higher loan originations period-over-period. This increase was partially offset by a $1.5 million increase in deferred loan origination costs due to greater loan originations period-over-period. Occupancy and equipment. The increase was primarily due to expenses for the Walnut Creek branch office and Newport Beach non-depository office during the six months ended June 30, 2026, which did not exist for the six months ended June 30, 2025. The increase was also related to an increase in expense for the San Francisco branch office due to an expansion project. Data processing and software. The increase was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system. FDIC insurance. The increase was primarily due to a $916.2 million increase in the assessment base period-over-period. Advertising and promotional. The increase was primarily due to additional expenses incurred to support the expansion of the Bank’s business development teams, including $0.2 million related to business development expenses and $0.1 million related to advertising and marketing expenses. Loan-related expenses. The decrease was primarily related to a $0.1 million decrease in loan legal fees, combined with individually immaterial decreases in other expenses including credit report costs, inspection costs, and environmental report costs. Other operating expenses. The increase was primarily due to: (i) a $0.5 million increase in employee-related expenses such as travel; (ii) a $0.3 million increase in administrative charges, including bank charges; (iii) a $0.2 million increase in IntraFi Network fees resulting from an overall increase in balances carried in the network; (iv) a $0.2 million increase in armored car and courier services; and (v) a $0.1 million increase in operational losses, partially offset by the release of a $1.0 million loss contingency on an SBA loan during the six months ended June 30, 2026. No such release occurred during the six months ended June 30, 2025. Provision for Income Taxes Three months ended June 30, 2026 compared to three months ended June 30, 2025 The provision for income taxes was $6.7 million for the three months ended June 30, 2026, a $1.1 million increase from the three months ended June 30, 2025. This increase was primarily driven by an increase in taxable income, partially offset by a $0.2 million benefit recorded during the three months ended June 30, 2026 related to the purchase of transferable tax 48 credits that did not occur during the three months ended June 30, 2025. The effective tax rates were 25.64% and 27.82% for the three months ended June 30, 2026 and June 30, 2025, respectively. Six months ended June 30, 2026 compared to six months ended June 30, 2025 The provision for income taxes was $13.1 million for the six months ended June 30, 2026, as compared to $10.9 million for the six months ended June 30, 2025. The increase was primarily due to an overall increase in taxable income period-over-period. This increase was partially offset by a $0.5 million benefit recorded during the six months ended June 30, 2026 related to the purchase of transferable tax credits that did not occur during the six months ended June 30, 2025, as well as a net $0.2 million reduction to the provision recorded during the six months ended June 30, 2025. This adjustment related to a tax law change for the state of California effective as of June 30, 2025, which required a transition from a three-factor apportionment formula to a single-sales-factor formula for determining state income tax. As such, the Company recorded a net benefit of approximately $0.9 million relating to the current year provision, which was partially offset by a $0.7 million expense relating to the remeasurement of the deferred tax assets and liabilities as of June 30, 2025. No such adjustment was recorded during the six months ended June 30, 2026. The effective tax rates for the six months ended June 30, 2026 and 2025 were 25.63% and 28.24%, respectively. FINANCIAL CONDITION SUMMARY The following discussion compares our financial condition as of June 30, 2026 to our financial condition as of December 31, 2025. Table 11 summarizes selected components of our unaudited consolidated balance sheets as of June 30, 2026 and December 31, 2025. Table 11: Selected Components of Consolidated Balance Sheets (Unaudited) (dollars in thousands) June 30, 2026 December 31, 2025 Total assets $ 5,377,062 $ 4,754,861 Cash and cash equivalents 685,074 506,851 Total investments 92,719 96,889 Loans held for investment 4,519,681 4,074,929 Total deposits 4,799,383 4,201,084 Subordinated notes, net 74,114 74,041 Total shareholders’ equity 473,771 445,832 Total Assets At June 30, 2026, total assets were $5.4 billion, an increase of $622.2 million from $4.8 billion at December 31, 2025. The increase was primarily comprised of a $444.8 million increase in total loans held for investment and a $178.2 million increase in cash and cash equivalents. The $444.8 million increase in total loans held for investment between December 31, 2025 and June 30, 2026 was a result of $1.0 billion in loan originations and advances, partially offset by $162.1 million and $421.9 million in loan payoffs and paydowns, respectively. The $444.8 million increase in total loans held for investment included $145.0 million in purchased loans within the consumer section of the loan portfolio. Cash and Cash Equivalents Total cash and cash equivalents were $685.1 million at June 30, 2026, an increase of $178.2 million from $506.9 million at December 31, 2025. The increase in cash and cash equivalents was primarily due to the net increase in cash inflows from growth in total deposits of $598.3 million and cash outflows from growth in total loans held for investment of $444.8 million. Investment Portfolio Our investment portfolio is primarily comprised of U.S. government agency securities, mortgage-backed securities, and obligations of states and political subdivisions, which are high-quality liquid investments. We manage our investment portfolio according to written investment policies approved by our board of directors. Our investment strategy is designed to maximize earnings while maintaining liquidity in securities with minimal credit risk and interest rate risk that is 49 reflective of the yields obtained on those securities. Most of our securities are classified as available-for-sale, although we have one long-term, fixed rate municipal security classified as held-to-maturity. Our total securities available-for-sale and held-to-maturity amounted to $92.7 million at June 30, 2026 and $96.9 million at December 31, 2025, representing a decrease of $4.2 million during the same period. The decrease to available-for-sale securities was primarily due to maturities, prepayments, and calls of $3.6 million, and an unrealized loss on securities of $0.2 million, with the remainder of the change due to amortization of premiums. For the six months ended June 30, 2026, other comprehensive loss was $0.3 million, primarily due to market conditions on securities during that period. Table 12 presents the carrying value of our investment portfolio as of the dates indicated. Table 12: Carrying Value of Investment Securities As of June 30, 2026 December 31, 2025 (dollars in thousands) Carrying Value % of Total Carrying Value % of Total Available-for-sale (at fair value): U.S. government agency securities $ 6,551 7.07 % $ 7,361 7.60 % Mortgage-backed securities 45,231 48.78 % 48,186 49.73 % Obligations of states and political subdivisions 36,617 39.49 % 36,964 38.15 % Collateralized mortgage obligations 203 0.22 % 231 0.24 % Corporate bonds 1,982 2.14 % 1,957 2.02 % Total available-for-sale 90,584 97.70 % 94,699 97.74 % Held-to-maturity (at amortized cost): Obligations of states and political subdivisions 2,135 2.30 % 2,190 2.26 % Total $ 92,719 100.00 % $ 96,889 100.00 % 50 Table 13 presents the carrying value of our securities by their stated maturities, as well as the weighted average yields for each maturity range, as of the dates shown. Table 13: Stated Maturities and Weighted Average Yields - Investment Securities Due in one year or less Due after one year through five years Due after five years through ten years Due after ten years Total (dollars in thousands) Carrying Value Weighted Average Yield Carrying Value Weighted Average Yield Carrying Value Weighted Average Yield Carrying Value Weighted Average Yield Carrying Value Weighted Average Yield June 30, 2026 Available-for-sale: U.S. government agency securities $ 90 1.97 % $ 429 4.83 % $ 262 2.02 % $ 5,770 4.98 % $ 6,551 4.81 % Mortgage-backed securities — — % — — % 9,932 1.36 % 35,299 1.89 % 45,231 1.77 % Obligations of states and political subdivisions — — % 2,392 1.37 % 14,609 1.70 % 19,616 1.68 % 36,617 1.67 % Collateralized mortgage obligations — — % — — % 203 1.76 % — — % 203 1.76 % Corporate bonds 1,982 1.25 % — — % — — % — — % 1,982 1.25 % Total available-for-sale 2,072 1.28 % 2,821 1.90 % 25,006 1.56 % 60,685 2.11 % 90,584 1.94 % Held-to-maturity: Obligations of states and political subdivisions 165 6.00 % 840 6.00 % 1,130 6.00 % — — % 2,135 6.00 % Total $ 2,237 1.63 % $ 3,661 2.84 % $ 26,136 1.76 % $ 60,685 2.11 % $ 92,719 2.03 % December 31, 2025 Available-for-sale: U.S. government agency securities $ 198 2.00 % $ 619 5.27 % $ 298 2.01 % $ 6,246 5.58 % $ 7,361 5.31 % Mortgage-backed securities — — % — — % 4,677 1.33 % 43,509 1.79 % 48,186 1.75 % Obligations of states and political subdivisions — — % 1,196 1.26 % 12,385 1.64 % 23,383 1.70 % 36,964 1.67 % Collateralized mortgage obligations — — % — — % 231 1.76 % — — % 231 1.76 % Corporate bonds 1,957 1.25 % — — % — — % — — % 1,957 1.25 % Total available-for-sale 2,155 1.32 % 1,815 2.63 % 17,591 1.57 % 73,138 2.09 % 94,699 1.98 % Held-to-maturity: Obligations of states and political subdivisions 170 6.00 % 865 6.00 % 1,155 6.00 % — — % 2,190 6.00 % Total $ 2,325 1.66 % $ 2,680 3.72 % $ 18,746 1.84 % $ 73,138 2.09 % $ 96,889 2.07 % Weighted average yield for securities available-for-sale is the projected yield to maturity given current cash flow projections for U.S. government agency securities, mortgage-backed securities, and collateralized mortgage obligations. For callable municipal securities and corporate bonds, weighted average yield is a yield to worst. Weighted average yield for securities held-to-maturity is the stated coupon of the bond. Yields on tax-exempt securities are not presented on a tax-equivalent basis. 51 Loan Portfolio Our loan portfolio is our largest class of interest-earning assets and typically provides higher yields than other types of interest-earning assets. Associated with the higher yields is an inherent amount of credit risk, which we attempt to mitigate with strong underwriting standards. As of June 30, 2026 and December 31, 2025, our total loans amounted to $4.5 billion and $4.1 billion, respectively. Table 14 presents the balance and associated percentage of each major product type within our portfolio as of the dates indicated. Table 14: Loans Outstanding As of June 30, 2026 December 31, 2025 (dollars in thousands) Amount % of Loans Amount % of Loans Loans held for investment: Real estate: Commercial $ 3,597,173 79.56 % $ 3,305,713 81.08 % Commercial land and development 2,507 0.06 % 1,352 0.03 % Commercial construction 124,053 2.74 % 96,760 2.37 % Residential construction 21,809 0.48 % 8,389 0.21 % Residential 41,874 0.93 % 37,566 0.92 % Farmland 59,900 1.32 % 59,606 1.46 % Commercial: Secured 258,736 5.72 % 251,736 6.17 % Unsecured 41,263 0.91 % 40,422 0.99 % Consumer and other 374,614 8.28 % 275,475 6.77 % Loans held for investment, gross 4,521,929 100.00 % 4,077,019 100.00 % Loans held for sale: Commercial — — % — — % Total loans, gross 4,521,929 100.00 % 4,077,019 100.00 % Net deferred loan fees (2,248) (2,090) Total loans $ 4,519,681 $ 4,074,929 Commercial real estate loans consist of term loans secured by a mortgage lien on the real property, such as office and industrial buildings, manufactured home communities, self-storage facilities, hospitality properties, faith-based properties, retail shopping centers, and apartment buildings, as well as commercial real estate construction loans that are offered to builders and developers. Commercial land and development and commercial construction loans consist of loans made to fund commercial land acquisition and development and commercial construction, respectively. The real estate purchased with these loans is generally located in or near our market. Residential real estate and construction real estate loans consist of loans secured by single-family and multifamily residential properties, which are both owner-occupied and investor-owned. Farmland loans consist of loans used to purchase, refinance, or improve farmland secured by farming properties themselves. The farmland is generally located in or near our market. Commercial loans consist of financing for commercial purposes in various lines of business, including manufacturing, service industry, and professional service areas. Commercial loans can be secured or unsecured but are generally secured with the assets of the company and/or the personal guaranty of the business owner(s). 52 Consumer and other loans consist primarily of loans purchased in a loan purchase program with a non-bank lender, generally made to professionals for the purpose of large personal or household purchases. The loans are unsecured, fixed rate loans. Consumer and other loans also include loans purchased or originated through financing partnerships which are no longer active. Table 15 presents the commercial real estate loan balance, associated percentage of commercial real estate concentrations, estimated real estate collateral values, and related loan-to-value (“LTV”) ranges by collateral type as of the dates indicated. Revolving lines of credit with zero balance and 0.00% LTV are excluded from this table. Collateral values are determined at origination using third-party real estate appraisals or evaluations. Updated appraisals, which are included in Table 15, may be obtained for loans that are downgraded to watch or substandard. Loans over $2.0 million are reviewed annually, at which time an internal assessment of collateral values is completed. Table 15: Commercial Real Estate Loans (dollars in thousands) Loan Balance % of Commercial Real Estate Collateral Value Minimum LTV Maximum LTV June 30, 2026 Manufactured home community $ 1,081,062 30.05 % $ 1,923,792 15.99 % 75.28 % RV Park 443,429 12.33 % 814,152 17.40 % 72.96 % Retail 327,576 9.11 % 713,667 6.15 % 73.58 % Multifamily 309,720 8.61 % 715,862 6.58 % 78.83 % Office 285,786 7.94 % 619,202 4.41 % 74.82 % Industrial 246,142 6.84 % 590,270 2.04 % 75.00 % Mini storage 206,823 5.75 % 416,300 9.54 % 70.00 % Faith-based 196,160 5.45 % 530,621 3.44 % 74.33 % All other types1 500,475 13.92 % 1,076,019 1.90 % 120.01 % Total2 $ 3,597,173 100.00 % $ 7,399,885 December 31, 2025 Manufactured home community $ 1,025,386 31.02 % $ 1,820,597 16.16 % 73.59 % RV Park 412,955 12.49 % 742,097 17.56 % 74.70 % Retail 317,536 9.61 % 668,216 6.23 % 74.23 % Multifamily 286,064 8.65 % 618,588 7.56 % 79.21 % Industrial 247,368 7.48 % 563,631 0.99 % 91.33 % Faith-based 193,362 5.85 % 513,107 8.66 % 75.00 % Mini storage 190,252 5.76 % 381,810 14.63 % 70.00 % Office 175,767 5.32 % 404,727 4.62 % 74.95 % All other types1 457,023 13.82 % 966,325 0.79 % 134.52 % Total2 $ 3,305,713 100.00 % $ 6,679,098 1Types of collateral in the “all other types” category are those that individually make up less than 5.00% of the commercial real estate concentration. 2Minimum LTV and maximum LTV not shown for aggregated totals, as such values are meaningful only when presented by specific category. Over the past several years, we have experienced significant growth in our loan portfolio, although the relative composition of the portfolio has not changed materially. Our primary focus remains commercial real estate lending (including commercial, commercial land and development, and commercial construction), which constitutes 82.36% of loans held for investment at June 30, 2026. Commercial secured lending represents 5.72% of loans held for investment at June 30, 2026. We sell the guaranteed portion of all SBA 7(a) loans in the secondary market and will continue to do so as long as market conditions continue to be favorable. 53 We recognize that our commercial real estate loan concentration is significant within our balance sheet. Commercial real estate loan balances as a percentage of risk-based capital were 615.22% and 594.17% as of June 30, 2026 and December 31, 2025, respectively. We have established internal concentration limits in the loan portfolio for commercial real estate loans by sector (e.g., manufactured home communities, self-storage, hospitality, etc.). All loan sectors were within our established limits as of June 30, 2026. Additionally, our loans are geographically concentrated with borrowers and collateralized properties primarily in California. We believe that our past success is attributable to focusing on products and markets where we have significant expertise. Given our concentrations, we have established strong risk management practices, including risk-based lending standards, self-established product and geographical limits, annual evaluations of income property loans, and semi-annual top-down and bottom-up stress testing. We expect to continue growing our loan portfolio. We do not expect our product or geographic concentrations to materially change. Table 16 sets forth the contractual maturities and sensitivity to interest rate changes of our loan portfolio as of the dates indicated. 54 Table 16: Contractual Maturities and Sensitivity to Interest Rate Changes - Gross Loans (dollars in thousands) Due in 1 year or less Due after 1 year through 5 years Due after 5 years through 15 years Due after 15 years Total June 30, 2026 Loans with fixed interest rates: Real estate: Commercial $ 70,604 $ 288,319 $ 344,272 $ 3,554 $ 706,749 Commercial land and development — 175 — — 175 Commercial construction — — 3,244 — 3,244 Residential construction — — — — — Residential 2,989 3,452 1,063 403 7,907 Farmland — — 4,447 — 4,447 Commercial: Secured 4,014 38,628 16,031 — 58,673 Unsecured 90 4,638 24,195 — 28,923 Consumer and other 186 49,913 324,400 — 374,499 Total loans with fixed interest rates 77,883 385,125 717,652 3,957 1,184,617 Loans with floating or adjustable interest rates: Real estate: Commercial 35,372 371,042 2,427,683 56,327 2,890,424 Commercial land and development 577 1,270 485 — 2,332 Commercial construction 4,587 52,759 48,115 15,348 120,809 Residential construction 6,020 15,258 531 — 21,809 Residential 493 12,298 21,024 152 33,967 Farmland 1,040 14,570 39,843 — 55,453 Commercial: Secured 78,766 51,180 58,939 11,178 200,063 Unsecured 5,375 6,965 — — 12,340 Consumer and other — 115 — — 115 Total loans with floating or adjustable interest rates 132,230 525,457 2,596,620 83,005 3,337,312 Total gross loans $ 210,113 $ 910,582 $ 3,314,272 $ 86,962 $ 4,521,929 Total gross loans: Real estate: Commercial 105,976 659,361 2,771,955 59,881 3,597,173 Commercial land and development 577 1,445 485 — 2,507 Commercial construction 4,587 52,759 51,359 15,348 124,053 Residential construction 6,020 15,258 531 — 21,809 Residential 3,482 15,750 22,087 555 41,874 Farmland 1,040 14,570 44,290 — 59,900 Commercial: Secured 82,780 89,808 74,970 11,178 258,736 Unsecured 5,465 11,603 24,195 — 41,263 Consumer and other 186 50,028 324,400 — 374,614 Total $ 210,113 $ 910,582 $ 3,314,272 $ 86,962 $ 4,521,929 55 Table 16: Contractual Maturities and Sensitivity to Interest Rate Changes - Gross Loans (continued) (dollars in thousands) Due in 1 year or less Due after 1 year through 5 years Due after 5 years through 15 years Due after 15 years Total December 31, 2025 Loans with fixed interest rates: Real estate: Commercial $ 31,238 $ 275,099 $ 366,518 $ 3,571 $ 676,426 Commercial land and development — 176 — — 176 Commercial construction — — — — — Residential construction — — — — — Residential 24 5,741 1,313 412 7,490 Farmland — — 4,612 — 4,612 Commercial: Secured 3,187 36,461 16,118 — 55,766 Unsecured 58 5,781 23,417 — 29,256 Consumer and other 72 17,779 257,472 — 275,323 Total loans with fixed interest rates 34,579 341,037 669,450 3,983 1,049,049 Loans with floating or adjustable interest rates: Real estate: Commercial 29,907 274,098 2,257,847 67,435 2,629,287 Commercial land and development 602 500 74 — 1,176 Commercial construction 1,429 49,478 32,749 13,104 96,760 Residential construction 4,790 3,267 332 — 8,389 Residential 4,344 4,931 20,485 316 30,076 Farmland 1,775 12,829 40,390 — 54,994 Commercial: Secured 57,918 67,862 59,623 10,567 195,970 Unsecured 4,524 6,642 — — 11,166 Consumer and other — 152 — — 152 Total loans with floating or adjustable interest rates 105,289 419,759 2,411,500 91,422 3,027,970 Total gross loans $ 139,868 $ 760,796 $ 3,080,950 $ 95,405 $ 4,077,019 Total gross loans: Real estate: Commercial 61,145 549,197 2,624,365 71,006 3,305,713 Commercial land and development 602 676 74 — 1,352 Commercial construction 1,429 49,478 32,749 13,104 96,760 Residential construction 4,790 3,267 332 — 8,389 Residential 4,368 10,672 21,798 728 37,566 Farmland 1,775 12,829 45,002 — 59,606 Commercial: Secured 61,105 104,323 75,741 10,567 251,736 Unsecured 4,582 12,423 23,417 — 40,422 Consumer and other 72 17,931 257,472 — 275,475 Total gross loans $ 139,868 $ 760,796 $ 3,080,950 $ 95,405 $ 4,077,019 56 Asset Quality We manage the quality of our loans based upon trends at the overall loan portfolio level, as well as within each product type. We measure and monitor key factors that include the level and trend of classified, delinquent, non-accrual, and nonperforming assets, collateral coverage, credit scores, and debt service coverage, where applicable. These metrics directly impact our evaluation of the adequacy of our allowance for credit losses. Our primary objective is to maintain a high level of asset quality in our loan portfolio. We believe our underwriting policies and practices, executed by experienced professionals, appropriately govern the risk profile for our loan portfolio. These policies are continually evaluated and updated as necessary. All loans are assessed and assigned a risk classification at origination based on underlying characteristics of the transaction, such as collateral cash flow, collateral coverage, and borrower strength. We believe that we have a comprehensive methodology to proactively monitor our credit quality after the origination process. Particular emphasis is placed on our commercial portfolio, where risk assessments are reevaluated as a result of reviewing commercial property operating statements and borrower financials. On an ongoing basis, we also monitor payment performance, delinquencies, and tax and property insurance compliance. We design our practices to facilitate the early detection and remediation of problems within our loan portfolio. Assigned risk classifications are an integral part of management’s assessment of the adequacy of our allowance for credit losses. We periodically employ the use of an independent consulting firm to evaluate our underwriting and risk assessment process. Like other financial institutions, we are subject to the risk that our loan portfolio will be exposed to increasing pressures from deteriorating borrower credit due to general economic conditions and rising interest rates. Nonperforming Assets Our nonperforming assets consist of nonperforming loans and foreclosed real estate, if any. Nonperforming loans consist of non-accrual loans and loans contractually past due by 90 days or more and still accruing. Loans on which the accrual of interest has been discontinued are designated as non-accrual loans. Accrual of interest on loans is discontinued either when reasonable doubt exists as to the full and timely collection of interest or principal or when a loan becomes contractually past due by 90 days or more with respect to interest or principal. When a loan is placed on non-accrual status, all interest previously accrued, but not collected, is reversed against current period interest income. Income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is probable. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. SBA Loans During the six months ended June 30, 2026, the Company did not sell any SBA 7(a) loans. 57 Non-accrual Loans Table 17 provides details of our nonperforming and restructured assets and certain other related information as of the dates presented. Table 17: Nonperforming and Restructured Assets As of (dollars in thousands) June 30, 2026 December 31, 2025 Non-accrual loans: Real estate: Commercial $ 13,122 $ 2,666 Commercial: Secured 228 430 Total non-accrual loans 13,350 3,096 Loans past due 90 days or more and still accruing: Total loans past due and still accruing — — Total nonperforming loans 13,350 3,096 Real estate owned — — Total nonperforming assets $ 13,350 $ 3,096 Performing loan modifications (“LMs”) (not included above) $ — $ — Allowance for credit losses to period end nonperforming loans 354.57 % 1,434.40 % Nonperforming loans to loans held for investment 0.30 % 0.08 % Nonperforming assets to total assets 0.25 % 0.07 % Nonperforming loans plus performing LMs to loans held for investment 0.30 % 0.08 % The ratio of nonperforming loans to loans held for investment was 0.30% at June 30, 2026, as compared to 0.08% at December 31, 2025. The ratio of the allowance for credit losses to period end nonperforming loans decreased from 1,434.40% as of December 31, 2025 to 354.57% as of June 30, 2026. This decrease was due to a $10.3 million, or 331.20%, increase in nonperforming loans due to one Community Reinvestment Act loan that was placed on non-accrual status during the period. The balance of the loan is $11.4 million as of June 30, 2026, and it was originally downgraded to substandard in 2025. This was partially offset by improvements across the remainder of the nonperforming loan portfolio. Potential Problem Loans We utilize a risk grading system for our loans to aid us in evaluating the overall credit quality of our real estate loan portfolio and assessing the adequacy of our allowance for credit losses. All loans are grouped into a risk category at the time of origination. Commercial real estate loans over $2.0 million are reevaluated at least annually for proper classification in conjunction with our review of property and borrower financial information. All loans are reevaluated for proper risk grading as new information such as payment patterns, collateral condition, and other relevant information comes to our attention. 58 Loans designated as “watch” or “special mention” are internal bank designations and are not considered adversely classified. However, loans designated as “substandard” or “doubtful” are considered adversely classified. Table 18 shows loans by credit quality risk rating as of the periods indicated. Table 18: Gross Loans Held for Investment by Credit Quality Risk Rating (dollars in thousands) Pass Watch Special Mention Substandard Doubtful Total June 30, 2026 Real estate: Commercial $ 3,407,698 $ 141,461 $ 28,872 $ 19,142 $ — $ 3,597,173 Commercial land and development 2,507 — — — — 2,507 Commercial construction 108,653 — 15,400 — — 124,053 Residential construction 21,809 — — — — 21,809 Residential 41,874 — — — — 41,874 Farmland 59,324 576 — — — 59,900 Commercial: Secured 246,910 10,098 586 1,142 — 258,736 Unsecured 38,763 2,500 — — — 41,263 Consumer and other 374,610 — — 4 — 374,614 Total $ 4,302,148 $ 154,635 $ 44,858 $ 20,288 $ — $ 4,521,929 December 31, 2025 Real estate: Commercial $ 3,173,099 $ 76,118 $ 35,124 $ 21,372 $ — $ 3,305,713 Commercial land and development 1,352 — — — — 1,352 Commercial construction 81,840 14,920 — — — 96,760 Residential construction 8,389 — — — — 8,389 Residential 37,566 — — — — 37,566 Farmland 58,521 585 500 — — 59,606 Commercial: Secured 238,605 10,272 1,906 953 — 251,736 Unsecured 40,422 — — — — 40,422 Consumer and other 275,469 — — 6 — 275,475 Total $ 3,915,263 $ 101,895 $ 37,530 $ 22,331 $ — $ 4,077,019 Loans designated as watch, special mention, and substandard increased to $219.8 million at June 30, 2026 from $161.8 million at December 31, 2025. There were no loans with doubtful risk grades at June 30, 2026 or December 31, 2025. Allowance for Credit Losses The allowance for credit losses is established through a provision for credit losses charged to operations. Provisions are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Subsequent recoveries of previously charged-off amounts, if any, are credited to the allowance for credit losses. The allowance for credit losses is evaluated on a regular basis by management and is based on management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. Historical loss rates within the commercial secured pool are also evaluated by 59 management on a regular basis to estimate the allowance for credit losses. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. At June 30, 2026, the Company’s allowance for credit losses was $47.3 million, as compared to $44.4 million at December 31, 2025. The $2.9 million increase in the allowance is due to a $4.6 million provision for credit losses (excluding a $0.4 million provision for unfunded commitments) recorded during the six months ended June 30, 2026, partially offset by net charge-offs of $1.6 million, primarily attributable to commercial and industrial loans, during the same period. While the entire allowance for credit losses is available to absorb losses from any and all loans, Table 19 represents management’s allocation of our allowance for credit losses by loan category, the allocation of our allowance for credit losses as a percent of the total allowance for credit losses, and the balance of loans in each category as a percentage of total loans, for the periods indicated. Table 19: Allocation of the Allowance for Credit Losses (dollars in thousands) Allowance for Credit Losses % of Allowance for Credit Losses % of Loans to Total Loans June 30, 2026 Real estate: Commercial $ 28,371 59.92 % 79.56 % Commercial land and development 90 0.19 % 0.06 % Commercial construction 4,444 9.39 % 2.74 % Residential construction 533 1.13 % 0.48 % Residential 419 0.89 % 0.93 % Farmland 468 0.99 % 1.32 % Commercial: Secured 9,594 20.27 % 5.72 % Unsecured 486 1.03 % 0.91 % Consumer and other 2,930 6.19 % 8.28 % Total $ 47,335 100.00 % 100.00 % December 31, 2025 Real estate: Commercial $ 25,219 56.77 % 81.08 % Commercial land and development 56 0.13 % 0.03 % Commercial construction 4,050 9.12 % 2.37 % Residential construction 213 0.48 % 0.21 % Residential 362 0.82 % 0.92 % Farmland 467 1.05 % 1.46 % Commercial: Secured 11,204 25.23 % 6.17 % Unsecured 482 1.09 % 0.99 % Consumer and other 2,356 5.31 % 6.77 % Total $ 44,409 100.00 % 100.00 % The ratio of the allowance for credit losses to total loans held for investment was 1.05% at June 30, 2026, a decline from 1.09% at December 31, 2025. 60 Table 20: Activity Within the Allowance for Credit Losses As of and for the three months ended As of and for the six months ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 (dollars in thousands) Activity % of Average Loans Held for Investment Activity % of Average Loans Held for Investment Activity % of Average Loans Held for Investment Activity % of Average Loans Held for Investment Average loans held for investment $ 4,328,304 $ 3,690,658 $ 4,239,866 $ 3,628,589 Allowance for credit losses - beginning of period $ 46,439 $ 39,224 $ 44,409 $ 37,791 Net (charge-offs) recoveries: Commercial: Secured (1,031) (0.02) % (1,420) (0.04) % (1,601) (0.04) % (2,101) (0.06) % Unsecured — — % (50) — % 2 — % (50) — % Consumer and other (23) — % 13 — % (25) — % (23) — % Net charge-offs (1,054) (0.02) % (1,457) (0.04) % (1,624) (0.04) % (2,174) (0.06) % Provision for credit losses 1,950 2,400 4,550 4,550 Allowance for credit losses - end of period $ 47,335 $ 40,167 $ 47,335 $ 40,167 Loans held for investment $ 4,519,681 $ 3,758,025 $ 4,519,681 $ 3,758,025 Allowance for credit losses to loans held for investment 1.05 % 1.07 % 1.05 % 1.07 % The ratio of the allowance for credit losses to loans held for investment decreased from 1.07% as of June 30, 2025 to 1.05% as of June 30, 2026. Net charge-offs as a percent of average loans held for investment decreased from 0.04% for the three months ended June 30, 2025 to 0.02% for the three months ended June 30, 2026. Net charge-offs as a percent of average loans held for investment decreased from 0.06% for the six months ended June 30, 2025 to 0.04% for the six months ended June 30, 2026. 61 Liabilities During the first six months of 2026, total liabilities increased by $594.3 million from $4.3 billion as of December 31, 2025 to $4.9 billion as of June 30, 2026. This increase was primarily due to an increase in deposits of $598.3 million. The increase in deposits was largely due to increases in money market, interest-bearing transaction, and non-interest-bearing deposits of $590.7 million, $156.1 million, and $89.9 million, respectively, partially offset by a $246.6 million decrease in time deposits, mainly attributed to a $215.0 million decline in wholesale deposits. Deposits Representing 97.88% of our total liabilities as of June 30, 2026, deposits are our primary source of funding for our business operations. Total deposits increased by $598.3 million, or 14.24%, to $4.8 billion at June 30, 2026 from $4.2 billion at December 31, 2025. The increase in deposits was largely due to increases in money market, interest-bearing transaction, and non-interest-bearing deposits of $590.7 million, $156.1 million, and $89.9 million, respectively, partially offset by a $246.6 million decrease in time deposits, mainly attributed to a $215.0 million decline in wholesale deposits. The Company defines wholesale deposits as brokered deposits and California Time Deposit Program deposits. Non-interest-bearing deposits increased by $89.9 million from December 31, 2025 to $1.2 billion at June 30, 2026, representing 24.47% of total deposits at that date, as compared to 25.82% of total deposits at December 31, 2025. Our loan to deposit ratio was 94.17% at June 30, 2026, as compared to 97.00% at December 31, 2025. We closely monitor the loan to deposit ratio for purposes of both operational objectives and regulatory capital compliance. We intend to continue to operate our business with close monitoring of the loan to deposit ratio. Table 21 summarizes our deposit composition by average deposit balances and average rates paid for the periods indicated. Table 21: Deposit Composition by Average Balances and Rates Paid For the three months ended June 30, 2026 June 30, 2025 (dollars in thousands) Average Amount Average Rate Paid % of Total Deposits Average Amount Average Rate Paid % of Total Deposits Interest-bearing transaction accounts $ 389,136 1.34 % 8.37 % $ 283,369 1.48 % 7.58 % Money market and savings accounts 2,700,300 2.99 % 58.06 % 1,769,320 3.19 % 47.36 % Time accounts 396,923 3.66 % 8.54 % 726,295 4.30 % 19.44 % Demand accounts 1,163,991 — % 25.03 % 957,034 — % 25.62 % Total deposits $ 4,650,350 2.16 % 100.00 % $ 3,736,018 2.46 % 100.00 % For the six months ended June 30, 2026 June 30, 2025 (dollars in thousands) Average Amount Average Rate Paid % of Total Deposits Average Amount Average Rate Paid % of Total Deposits Interest-bearing transaction accounts $ 366,525 1.34 % 8.17 % $ 293,539 1.48 % 8.02 % Money market and savings accounts 2,512,927 2.96 % 56.02 % 1,717,189 3.20 % 46.90 % Time accounts 463,606 3.71 % 10.33 % 716,466 4.34 % 19.57 % Demand accounts 1,143,142 — % 25.48 % 934,121 — % 25.51 % Total deposits $ 4,486,200 2.15 % 100.00 % $ 3,661,315 2.47 % 100.00 % Net uninsured and uncollateralized deposits totaled approximately $1.6 billion and $1.4 billion at June 30, 2026 and December 31, 2025, respectively. 62 As of June 30, 2026, our 70 largest deposit relationships, each accounting for more than $10.0 million, totaled $2.5 billion, or 51.19% of our total deposits. The average age on deposit relationships of more than $5.0 million was approximately 7.39 years as of June 30, 2026. As of December 31, 2025, our 53 largest deposit relationships, each accounting for more than $10.0 million, totaled $2.0 billion, or 47.82% of our total deposits. Overall, our large deposit relationships have been relatively consistent over time and have helped to continue to grow our deposit base. Table 22 shows the entity types making up our large deposit relationships at the dates indicated. Table 22: Composition of Large Deposit Relationships (dollars in thousands) June 30, 2026 December 31, 2025 Municipalities $ 1,142,118 $ 789,643 Non-profits 413,151 283,666 Businesses 901,655 760,516 Brokered deposits — 174,981 Total $ 2,456,924 $ 2,008,806 Our largest single deposit relationship at June 30, 2026 related to a government agency. The balance for this customer was $340.1 million, or approximately 7.09% of total deposits as of that date. At December 31, 2025, our largest single deposit relationship related to a government agency and had a balance of $290.0 million, or 6.90% of total deposits as of that date. As our demand deposits fluctuate, we have purchased brokered deposits as needed to supplement liquidity. We do not consider brokered deposits as core deposits, but as another deposit funding source for our loan growth. Table 23 sets forth the maturity of time deposits as of June 30, 2026. Table 23: Scheduled Maturities of Time Deposits (dollars in thousands) $250,000 or Greater Less than $250,000 Total Uninsured Portion Remaining maturity: Three months or less $ 260,679 $ 8,517 $ 269,196 $ 255,429 Over three through six months 5,026 7,441 12,467 2,776 Over six through twelve months 11,405 14,187 25,592 7,905 Over twelve months 340 396 736 90 Total $ 277,450 $ 30,541 $ 307,991 $ 266,200 FHLB Advances and Other Borrowings From time to time, we utilize short-term collateralized FHLB borrowings to maintain adequate liquidity. There were no borrowings outstanding as of either June 30, 2026 or December 31, 2025. In 2022, we issued subordinated notes of $75.0 million. This debt was issued to investors in private placement transactions. See Note 6, Subordinated Notes and Other Borrowings, in the notes to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding these subordinated notes. The proceeds of the notes qualify as Tier 2 capital for the Company under the regulatory capital rules of the federal banking agencies. Table 24 is a summary of our outstanding subordinated notes as of June 30, 2026. Table 24: Subordinated Notes Outstanding (dollars in thousands) Issuance Date Amount of Notes Prepayment Right Maturity Date Subordinated notes August 2022 $ 75,000 August 17, 2027 September 1, 2032 Fixed at 6.00% through September 1, 2027, then three-month Term SOFR plus 329.0 basis points (7.02% as of June 30, 2026) through maturity 63 Shareholders’ Equity Shareholders’ equity totaled $473.8 million at June 30, 2026 and $445.8 million at December 31, 2025. The increase in shareholders’ equity was primarily a result of $38.0 million recognized as net income during the period, partially offset by $10.7 million in cash dividends paid during the period and a $0.3 million increase in accumulated other comprehensive loss. Liquidity and Capital Resources Liquidity Management We manage liquidity based upon factors that include the level of diversification of our funding sources, the composition of our deposit types, the availability of unused funding sources, our off-balance sheet obligations, the amount of cash and liquid securities we hold, and the availability of assets to be readily converted into cash without undue loss. As the primary federal regulator of the Bank, the FDIC evaluates our liquidity on a stand-alone basis pursuant to applicable guidance and policies. Liquidity refers to our capacity to meet our cash obligations at a reasonable cost. Our cash obligations require us to have cash flow that is adequate to fund loan growth and maintain on-balance sheet liquidity while meeting present and future obligations of deposit withdrawals, borrowing maturities, and other contractual cash obligations. In managing our cash flows, management regularly confronts situations that can give rise to increased liquidity risk. These include funding mismatches, market constraints in accessing sources of funds, and the ability to convert assets into cash. Changes in economic conditions or exposure to borrower credit quality, capital markets, and operational, legal, or reputational risks could also affect the Bank’s liquidity risk profile and are considered in the assessment of liquidity management. The Company is a corporation separate and apart from the Bank and, therefore, must provide for its own liquidity, including liquidity required to meet its debt service requirements on its subordinated notes. The Company’s main source of cash flow is dividends declared and paid to it by the Bank. There are statutory and regulatory limitations that affect the ability of the Bank to pay dividends to the Company, including various legal and regulatory provisions that limit the amount of dividends the Bank can pay to the Company without regulatory approval. Under the California Financial Code, payment of a dividend from the Bank to the Company without advance regulatory approval is restricted to the lesser of the Bank’s retained earnings or the amount of the Bank’s net income from the previous three fiscal years less the amount of dividends paid during that period. We believe that these limitations will not impact our ability to meet our ongoing short-term cash obligations. For contingency purposes, the Company maintains a minimum level of cash to fund one year’s projected operating cash flow needs plus two years’ subordinated notes debt service. We continually monitor our liquidity position in order to meet all reasonably foreseeable short-term, long-term, and strategic liquidity demands. Management has established a comprehensive process for identifying, measuring, monitoring, and controlling liquidity risk. Because of its critical importance to the viability of the Bank, liquidity risk management is fully integrated into our risk management processes. Critical elements of our liquidity risk management include effective corporate governance, consisting of oversight by the board of directors and active involvement by management; appropriate strategies, policies, procedures, and limits used to manage and mitigate liquidity risk; comprehensive liquidity risk measurement and monitoring systems, including stress tests, that are commensurate with the complexity of our business activities; active management of intraday liquidity and collateral; an appropriately diverse mix of existing and potential future funding sources; adequate levels of highly liquid marketable securities free of legal, regulatory, or operational impediments that can be used to meet liquidity needs in stress situations; comprehensive contingency funding plans that sufficiently address potential adverse liquidity events and emergency cash flow requirements; and internal controls and internal audit processes sufficient to determine the adequacy of the Bank’s liquidity risk management process. Our liquidity position is supported by management of our liquid assets and liabilities and access to alternative sources of funds. Our liquidity requirements are met primarily through our deposits, Federal Reserve Discount Window advances, FHLB advances, and the principal and interest payments we receive on loans and investment securities. Cash on hand, cash at third-party banks, investments available-for-sale, and maturing or prepaying balances in our investment and loan portfolios are our most liquid assets. Other sources of liquidity that are routinely available to us include funds from retail and wholesale deposits, advances from the FHLB and the Federal Reserve Discount Window, and proceeds from the sale of loans. Less commonly used sources of funding include borrowings from established federal funds lines from unaffiliated commercial banks, and the issuance of debt or equity securities. We believe we have ample liquidity resources to fund future growth and meet other cash needs as necessary. 64 As of June 30, 2026, we had a shelf registration statement on file with the SEC registering the offer and sale by us of up to $300.0 million of any combination of equity or debt securities, depository shares, warrants, purchase contracts, purchase units, subscription rights, and units in one or more offerings. Specific information on the terms of any securities being offered, including the expected use of proceeds from the sale of such securities, are provided at the time of the offering. The 2026 Public Offering used $137.9 million of the securities registered under the Company’s shelf registration statement on file with the SEC. Sources and Uses of Cash Our executive officers and board of directors review our sources and potential uses of cash in connection with our annual budgeting process. Generally speaking, our principal funding source is cash from deposits, and our principal uses of cash include funding of loans, operating expenses, income taxes, and dividend payments, as described below. As of June 30, 2026, management believes the above-mentioned sources will provide adequate liquidity during the next twelve months for the Bank to meet its operating needs. In addition, in July 2026, the Company closed the 2026 Public Offering and issued 3,133,750 shares of its common stock at a public offering price of $44.00 per share. The net proceeds to the Company, after deducting underwriting discounts, commissions, and estimated offering expenses of $0.8 million, were approximately $129.9 million. Loans Loans are a significant use of cash in daily operations, and a source of cash as customers make payments on their loans or as loans are sold to other financial institutions. Cash flows from loans are affected by the timing and amount of customer payments and prepayments, changes in interest rates, the general economic environment, competition, and the political environment. During the six months ended June 30, 2026, we had cash outflows of $446.5 million in loan originations and advances, net of principal collected, and no loans originated for sale. Additionally, in the ordinary course of business, we enter into commitments to extend credit, such as commitments to fund new loans and undisbursed construction funds. While these commitments represent contractual cash requirements, a portion of these commitments to extend credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. At June 30, 2026, off-balance sheet commitments totaled $726.7 million. We expect to fund these commitments to the extent utilized primarily through the repayment of existing loans, deposit growth, and liquid assets. Deposits Deposits are our primary source of funding for our business operations, and the cost of deposits has a significant impact on our net interest income and net interest margin. Our deposits are primarily made up of money market, interest-bearing transaction, time, and non-interest-bearing demand deposits. Aside from commercial and business clients, a significant portion of our deposits are from municipalities and non-profit organizations. Cash flows from deposits are impacted by the timing and amount of customer deposits, changes in market rates, and collateral availability. During the six months ended June 30, 2026, we had cash inflows of $598.3 million related to an increase in deposits. During the twelve months following June 30, 2026, approximately $307.3 million of time deposits are expected to mature. After the twelve months following June 30, 2026, we expect $0.7 million of time deposits to mature through 2030. These deposits may or may not renew due to general competition. We expect the outflow will not be significant and can be replenished through our organic growth in deposits. We believe our emphasis on local deposits and our San Francisco Bay Area and Southern California expansions provide a stable funding base. At June 30, 2026, cash and cash equivalents represented 14.27% of total deposits. 65 Investment Securities Our investment securities totaled $92.7 million at June 30, 2026. Mortgage-backed securities and obligations of states and political subdivisions comprised 48.78% and 41.79% of our investment portfolio, respectively. Cash proceeds from mortgage-backed securities result from payments of principal and interest by borrowers. Cash proceeds from obligations of states and political subdivisions occur when these securities are called or mature. Assuming the current prepayment speed and interest rate environment, we expect to receive approximately $9.4 million from our securities over the twelve months following June 30, 2026. In future periods, we expect to maintain approximately the same level of cash flows from our securities. Depending on market yield and our liquidity, we may purchase securities as a use of cash in our interest-earning asset portfolio. During the six months ended June 30, 2026, we had cash proceeds from sales, maturities, calls, and prepayments of securities of $3.6 million. Additionally, at June 30, 2026, securities available-for-sale totaled $90.6 million, of which $85.7 million has been pledged as collateral for borrowings and other commitments. FHLB Financing The Bank is a shareholder of the FHLB, which enables the Bank to have access to lower-cost FHLB financing when necessary. At June 30, 2026, the Bank had no outstanding FHLB financing borrowings and a total financing availability of $331.6 million, net of letters of credit issued of $1.3 billion. Federal Reserve Discount Window The Company has the ability to borrow from the Federal Reserve Discount Window when necessary. At June 30, 2026, the Bank had no outstanding Federal Reserve Discount Window borrowings and a total financing availability of $1.1 billion. Correspondent Bank Lines of Credit At June 30, 2026, the unused and available amount for borrowing from correspondent bank lines of credit was $185.0 million. Total Liquidity Total liquidity (consisting of cash and cash equivalents and unused and immediately available borrowing capacity as set forth in Table 25) was approximately $2.3 billion as of June 30, 2026. Table 25: Total Liquidity June 30, 2026 (dollars in thousands) Line of Credit Letters of Credit Issued Borrowings Available FHLB advances $ 1,629,065 $ 1,297,500 $ — $ 331,565 Federal Reserve Discount Window 1,074,577 — — 1,074,577 Correspondent bank lines of credit 185,000 — — 185,000 Cash and cash equivalents — — — 685,074 Total $ 2,888,642 $ 1,297,500 $ — $ 2,276,216 Future Contractual Obligations Our estimated future contractual obligations as of June 30, 2026 include both current and long-term obligations. Under our operating leases, we have an operating lease liability of $11.3 million. We have a current obligation of $307.3 million and a long-term obligation of $0.7 million related to time deposits, as discussed in Note 5, Interest-Bearing Deposits. We have net subordinated notes of $74.1 million, all of which are long-term obligations. We also have contractual obligations on unfunded loan commitments and standby letters of credit totaling $726.7 million. 66 Dividends A use of liquidity for the Company is shareholder dividends. The Company paid dividends to its shareholders totaling $5.3 million during the three months ended June 30, 2026. We expect to continue our current practice of paying quarterly cash dividends with respect to our common stock, subject to our board of directors’ discretion to modify or terminate this practice at any time and for any reason without prior notice. We believe our quarterly dividend rate per share, as approved by our board of directors, enables us to balance our multiple objectives of managing our business and returning a portion of our earnings to our shareholders. Assuming continued payment during the rest of 2026 at a rate of $0.25 per share, our average total dividend paid each quarter would be approximately $6.1 million based on the number of currently outstanding shares if there are no increases or decreases in the number of shares, and given that unvested RSAs share equally in dividends with outstanding common stock. Impact of Inflation Our unaudited consolidated financial statements and related notes have been prepared in accordance with GAAP, which require the measurement of financial position and operating results in terms of historical dollars, without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations. Unlike industrial companies, nearly all of our assets and liabilities are monetary in nature. As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods or services. Historical Information Table 26 summarizes our consolidated cash flow activities. Table 26: Consolidated Cash Flow Activities Six months ended June 30, (dollars in thousands) 2026 2025 $ Change Net cash provided by operating activities $ 42,606 $ 33,262 $ 9,344 Net cash used in investing activities (451,995) (229,885) 222,110 Net cash provided by financing activities 587,612 328,090 259,522 Operating Activities Net cash provided by operating activities increased by $9.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to higher net income, higher net changes in interest receivable and other assets, and no loans originated for sale in the quarter. These sources of cash were partially offset by no gross proceeds from sale of loans, as well as purchases of transferable tax credits. Cash provided by operating activities is subject to variability period-over-period as a result of timing differences, including with respect to the collection of receivables and payments of interest expense, accounts payable, and bonuses. For additional information about our operating results, see “Results of Operations” above. Investing Activities Net cash used in investing activities increased by $222.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to higher originations of loans held for investment, net of repayments. Financing Activities Net cash provided by financing activities increased by $259.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an increase in deposits. 67 Capital Adequacy We manage our capital by tracking our level and quality of capital with consideration given to our overall financial condition, our asset quality, our level of allowance for credit losses, our geographic and industry concentrations, and other risk factors on our balance sheet, including interest rate sensitivity. Bancorp and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements as set forth in Tables 27 and 28 can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on our unaudited consolidated financial statements. Under federal regulations implementing the Basel III framework, the Bank is subject to minimum risk-based and leverage capital requirements. The Bank is also subject to regulatory thresholds that must be met for an insured depository institution to be classified as “well-capitalized” under the prompt corrective action framework. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items, as calculated under regulatory accounting practices. Capital amounts for Bancorp and the Bank, and the Bank’s prompt corrective action classification, are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors. As of June 30, 2026, both Bancorp and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank qualified as “well-capitalized” under the prompt corrective action framework. Management reviews capital ratios on a regular basis to ensure that capital exceeds the prescribed regulatory minimums and is adequate to meet our anticipated future needs. For all periods presented, the Bank’s ratios exceed the regulatory definition of “well-capitalized” under the regulatory framework for prompt corrective action, and Bancorp’s ratios exceed the minimum ratios required for it to be considered a well-capitalized bank holding company. The capital adequacy ratios as of June 30, 2026 and December 31, 2025 for Bancorp and the Bank are presented in Tables 27 and 28. As of June 30, 2026 and December 31, 2025, Bancorp’s Tier 2 capital included subordinated notes, which were not included at the Bank level. Eligible amounts of subordinated notes included in Tier 2 capital will be phased out by 20% per year beginning five years before the maturity date of the notes. Table 27: Capital Ratios for Bancorp Actual Ratio Required for Capital Adequacy Purposes1 Ratio to be Well-Capitalized under Prompt Corrective Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio June 30, 2026 Total capital (to risk-weighted assets) $ 604,690 12.50 % $ 386,881 8.00 % N/A N/A Tier 1 capital (to risk-weighted assets) $ 482,149 9.97 % $ 290,160 6.00 % N/A N/A Common equity tier 1 capital (to risk-weighted assets) $ 482,149 9.97 % $ 217,620 4.50 % N/A N/A Tier 1 leverage $ 482,149 9.21 % $ 209,380 4.00 % N/A N/A December 31, 2025 Total capital (to risk-weighted assets) $ 572,874 13.33 % $ 343,779 8.00 % N/A N/A Tier 1 capital (to risk-weighted assets) $ 454,830 10.58 % $ 257,834 6.00 % N/A N/A Common equity tier 1 capital (to risk-weighted assets) $ 454,830 10.58 % $ 193,376 4.50 % N/A N/A Tier 1 leverage $ 454,830 9.70 % $ 187,499 4.00 % N/A N/A 68 Table 28: Capital Ratios for the Bank Actual Ratio Required for Capital Adequacy Purposes1 Ratio to be Well-Capitalized under Prompt Corrective Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio June 30, 2026 Total capital (to risk-weighted assets) $ 584,889 12.12 % $ 385,982 8.00 % $ 482,477 10.00 % Tier 1 capital (to risk-weighted assets) $ 536,462 11.11 % $ 289,486 6.00 % $ 385,982 8.00 % Common equity tier 1 capital (to risk-weighted assets) $ 536,462 11.11 % $ 217,115 4.50 % $ 313,610 6.50 % Tier 1 leverage $ 536,462 10.25 % $ 209,267 4.00 % $ 261,584 5.00 % December 31, 2025 Total capital (to risk-weighted assets) $ 554,071 12.92 % $ 342,984 8.00 % $ 428,729 10.00 % Tier 1 capital (to risk-weighted assets) $ 510,067 11.89 % $ 257,238 6.00 % $ 342,984 8.00 % Common equity tier 1 capital (to risk-weighted assets) $ 510,067 11.89 % $ 192,928 4.50 % $ 278,674 6.50 % Tier 1 leverage $ 510,067 10.89 % $ 187,409 4.00 % $ 234,261 5.00 % 1The listed capital adequacy ratios exclude capital conservation buffers. Non-GAAP Financial Measures Some of the financial measures discussed herein are non-GAAP financial measures. In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP in our consolidated statements of income, balance sheets, statements of shareholders’ equity, or statements of cash flows. Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. Management believes that tangible shareholders’ equity to tangible assets is a useful financial measure because it enables management, investors, and others to assess the Company’s financial health based on tangible capital. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated. Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. Management believes that tangible book value per share is a useful financial measure because it enables management, investors, and others to assess the Company’s value and use of equity. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated. We believe that these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations, and cash flows computed in accordance with GAAP. However, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those we use for the non-GAAP financial measures we disclose, but may calculate them differently. You should understand how we and other companies each calculate our non-GAAP financial measures when making comparisons. 69 Recent Legislative and Regulatory Developments On March 19, 2026, the federal banking agencies issued several proposals to revise the U.S. regulatory capital framework. The proposals would, among other things, modify aspects of the standardized approach to risk-based capital that applies to the Company, including to make the risk weights for certain residential mortgage exposures more risk-sensitive and decrease the risk weights of corporate exposures, which could affect certain aspects of the Company’s regulatory capital calculations. The Company is continuing to evaluate these proposals and their potential impact on its regulatory capital position. On June 25, 2026, the FDIC issued a proposal to revise deposit insurance assessment thresholds, rate schedules, and adjustments. Among other changes, the proposal would reduce initial base assessment rate schedules applicable to small institutions, including the Bank, by two basis points. The Company is continuing to evaluate the proposal and its potential impact on the Bank. On July 11, 2026, the 21st Century ROAD to Housing Act (the “Housing Act”) became law. The Housing Act is generally designed to incentivize new home construction, including through changes to certain banking laws to which the Bank is subject. Among other changes, Sections 901 and 902 of the Housing Act expanded the types of custodial deposits and amounts of reciprocal deposits, respectively, that may be excluded from treatment as brokered deposits. In addition, Section 903 of the Housing Act increased from $3 billion to $6 billion the maximum asset size for certain well-rated insured depository institutions to qualify for less frequent safety-and-soundness examinations by their primary federal regulator, allowing eligible institutions to be examined every 18 months instead of every 12 months. The Company is continuing to evaluate the Housing Act and its potential impacts on us. 70