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What changed in PCB BANCORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PCB BANCORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+249 added−253 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-13)

Top changes in PCB BANCORP's 2025 10-K

249 paragraphs added · 253 removed · 212 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

48 edited+7 added−5 removed187 unchanged
Biggest changeThe following table presents the composition of the Company’s loans held-for-investment as of the dates indicated: December 31, 2024 2023 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Commercial real estate: Commercial property $ 940,931 35.9 % $ 855,270 36.8 % Business property 595,547 22.6 % 558,772 24.0 % Multifamily 194,220 7.4 % 132,500 5.7 % Construction 21,854 0.8 % 24,843 1.1 % Total commercial real estate 1,752,552 66.7 % 1,571,385 67.6 % Commercial and industrial 472,763 18.0 % 342,002 14.7 % Consumer: Residential mortgage 392,456 14.9 % 389,420 16.8 % Other consumer 11,616 0.4 % 20,645 0.9 % Total consumer 404,072 15.3 % 410,065 17.7 % Loans held-for-investment $ 2,629,387 100.0 % $ 2,323,452 100.0 % The following table presents the composition of the Company’s loans held-for-sale as of the date indicated: December 31, 2024 2023 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Commercial real estate: Commercial property $ 3,307 52.6 % $ — — % Business property 713 11.3 % 2,802 54.4 % Total commercial real estate 4,020 63.9 % 2,802 54.4 % Commercial and industrial 2,272 36.1 % 2,353 45.6 % Loans held-for-investment $ 6,292 100.0 % $ 5,155 100.0 % 6 CRE Loans.
Biggest changeThe following table presents the composition of the Company’s loans held-for-investment as of the dates indicated: December 31, 2025 2024 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Commercial real estate: Commercial property $ 1,071,396 38.0 % $ 940,931 35.9 % Business property 638,063 22.6 % 595,547 22.6 % Multifamily 175,579 6.2 % 194,220 7.4 % Construction 18,561 0.7 % 21,854 0.8 % Total commercial real estate 1,903,599 67.5 % 1,752,552 66.7 % Commercial and industrial 508,662 18.0 % 472,763 18.0 % Consumer: Residential mortgage 401,337 14.3 % 392,456 14.9 % Other consumer 6,802 0.2 % 11,616 0.4 % Total consumer 408,139 14.5 % 404,072 15.3 % Loans held-for-investment $ 2,820,400 100.0 % $ 2,629,387 100.0 % The following table presents the composition of the Company’s loans held-for-sale as of the date indicated: December 31, 2025 2024 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Commercial real estate: Commercial property $ 3,750 31.1 % $ 3,307 52.6 % Business property 2,734 22.6 % 713 11.3 % Total commercial real estate 6,484 53.7 % 4,020 63.9 % Commercial and industrial 5,593 46.3 % 2,272 36.1 % Loans held-for-sale $ 12,077 100.0 % $ 6,292 100.0 % 7 CRE Loans.
Consumer loans includes residential mortgage loans and other consumer loans. Residential mortgage loans are typically collateralized by primary residential properties located in the Company’s market areas to enable borrowers to purchase or refinance existing homes. Other consumer loans portfolio consists of automobile loans, unsecured lines of credit and term loans to high net worth individuals.
Consumer loans includes residential mortgage loans and other consumer loans. Residential mortgage loans are typically collateralized by primary residential properties located in the Company’s market areas to enable borrowers to purchase or refinance existing homes. The other consumer loans portfolio consists of automobile loans, unsecured lines of credit and term loans to high net worth individuals.
The Company offers deposit products to its loan customers by encouraging, depending on the circumstances and the type of relationship, them to maintain deposit accounts as a condition of granting loans. To enhance the relationships with customers and to identify and meet their particular needs, each customer is assigned a relationship officer, including SBA loan borrowers.
The Company offers deposit products to its loan customers by encouraging them, depending on the circumstances and the type of relationship, to maintain deposit accounts as a condition of granting loans. To enhance the relationships with customers and to identify and meet their particular needs, each customer (including SBA loan borrowers) is assigned a relationship officer.
A full suite of online banking solutions is available, which includes access to account balances, online transfers, online bill payment and electronic delivery of customer statements, mobile banking solutions, including remote check deposit and mobile bill pay.
A full suite of online banking solutions is available, which includes access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and mobile banking solutions, including remote check deposit and mobile bill pay.
The Company invests in its employees’ future by sponsoring and prioritizing continued education throughout its employee ranks. The Company encourages its employees to participate in educational activities, which improve or maintain their skills in their current position, as well as to enhance future opportunities at the Company. The Company's employees are notified periodically of available internal course offerings.
The Company invests in its employees’ future by sponsoring and prioritizing continued education throughout its employee ranks. The Company encourages its employees to participate in educational activities, which improve or maintain their skills in their current position, as well as enhance future opportunities at the Company. The Company's employees are notified periodically of available internal course offerings.
If as federal banking agency determines that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, or other aspects of depository institution’s or its bank holding company’s operations are unsatisfactory or that it or its management was in violation of any law or regulation, the agency would have the authority to take a number of different remedial actions as it deems appropriate under the circumstances.
If a federal banking agency determines that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, or other aspects of depository institution’s or its bank holding company’s operations are unsatisfactory or that it or its management was in violation of any law or regulation, the agency would have the authority to take a number of different remedial actions as it deems appropriate under the circumstances.
If the Company’s fails to adhere to these policies, the Federal Reserve could find that the Company is operating in an unsafe and unsound manner. In addition, under the Basel III Capital Rules, institutions must maintain a capital conservation buffer of 2.5% in CET1 in order to avoid restrictions on their ability to pay dividends or repurchase shares.
If the Company fails to adhere to these policies, the Federal Reserve could find that the Company is operating in an unsafe and unsound manner. In addition, under the Basel III Capital Rules, institutions must maintain a capital conservation buffer of 2.5% in CET1 in order to avoid restrictions on their ability to pay dividends or repurchase shares.
As a bank holding company, the Company must obtain prior approval of the Federal Reserve before taking any action that causes a bank to become a controlled subsidiary of the bank holding company, acquiring direct or indirect ownership of 5% of the outstanding shares of any class of voting securities of another bank or bank holding company, acquiring all or substantially all the assets of a bank or merging or consolidating with another bank holding company. 14 In reviewing applications seeking approval of merger and acquisition transactions, the Federal Reserve considers, among other things, the competitive effect and public benefits of the transactions, the capital position and managerial resources of the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant’s performance record under the Community Reinvestment Act of 1977 (“CRA”), the applicant’s compliance with fair housing and other consumer protection laws and the effectiveness of all organizations involved in combating money laundering activities.
As a bank holding company, the Company must obtain prior approval of the Federal Reserve before taking any action that causes a bank to become a controlled subsidiary of the bank holding company, acquiring direct or indirect ownership of 5% of the outstanding shares of any class of voting securities of another bank or bank holding company, acquiring all or substantially all the assets of a bank or merging or consolidating with another bank holding company. 15 In reviewing applications seeking approval of merger and acquisition transactions, the Federal Reserve considers, among other things, the competitive effect and public benefits of the transactions, the capital position and managerial resources of the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant’s performance record under the Community Reinvestment Act of 1977 (“CRA”), the applicant’s compliance with fair housing and other consumer protection laws and the effectiveness of all organizations involved in combating money laundering activities.
For additional information, see Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 9 Deposits Activities The Company offers customers traditional retail deposit products through its branch network and the ability to access their accounts through online and mobile banking platforms.
For additional information, see Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 10 Deposits Activities The Company offers customers traditional retail deposit products through its branch network and the ability to access their accounts through online and mobile banking platforms.
Under the California Financial Code, the Bank is permitted to pay a dividend in the following circumstances: (i) without the consent of either the CDFPI or the Bank’s shareholders, in an amount not exceeding the lesser of (a) the retained earnings of the Bank; or (b) the net income of the Bank for its last three fiscal years, less the amount of any distributions made during the prior period; (ii) with the prior approval of the CDFPI, in an amount not exceeding the greatest of: (a) the retained earnings of the Bank; (b) the net income of the Bank for its last fiscal year; or (c) the net income for the Bank for its current fiscal year; and (iii) with the prior approval of the CDFPI and the Bank’s shareholders (i.e., the Company) in connection with a reduction of its contributed capital. 16 The payment of dividends by any financial institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.
Under the California Financial Code, the Bank is permitted to pay a dividend in the following circumstances: (i) without the consent of either the CDFPI or the Bank’s shareholders, in an amount not exceeding the lesser of (a) the retained earnings of the Bank; or (b) the net income of the Bank for its last three fiscal years, less the amount of any distributions made during the prior period; (ii) with the prior approval of the CDFPI, in an amount not exceeding the greatest of: (a) the retained earnings of the Bank; (b) the net income of the Bank for its last fiscal year; or (c) the net income for the Bank for its current fiscal year; and (iii) with the prior approval of the CDFPI and the Bank’s shareholders (i.e., the Company) in connection with a reduction of its contributed capital. 17 The payment of dividends by any financial institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.
Furthermore, tax laws administered by the Internal Revenue Service (“IRS”) and state taxing authorities, accounting rules developed by the Financial Accounting Standards Board (“FASB”), securities laws administered by the SEC and state securities authorities, Bank Secrecy Act (“BSA”) and Anti-Money Laundering (“AML”) laws enforced by the U.S.
Furthermore, tax laws administered by the Internal Revenue Service (“IRS”) and state taxing authorities, accounting rules developed by the Financial Accounting Standards Board (“FASB”), securities laws administered by the SEC and state securities authorities, Bank Secrecy Act (“BSA”) and Anti-Money Laundering laws enforced by the U.S.
These laws include, among others, laws regarding unfair and deceptive acts and practices and usury laws, as well as the following consumer protection statutes: Truth in Lending Act, Truth in Savings Act, Electronic Fund Transfer Act, Expedited Funds Availability Act, Equal Credit Opportunity Act, Fair and Accurate Credit Transactions Act, Fair Housing Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Gramm-Leach-Bliley Act, Home Mortgage Disclosure Act, Right to Financial Privacy Act, Servicemembers Civil Relief Act, Military Lending Act and Real Estate Settlement Procedures Act.
These laws include, among others, laws regarding unfair and deceptive acts and practices and usury laws, as well as the following consumer protection statutes: Truth in Lending Act, Truth in Savings Act, Electronic Fund Transfer Act, Expedited Funds Availability Act, Equal Credit Opportunity Act, Fair and Accurate Credit Transactions Act, Fair Housing Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Flood Disaster Protection Act, Gramm-Leach-Bliley Act, Home Mortgage Disclosure Act, Right to Financial Privacy Act, Servicemembers Civil Relief Act, Military Lending Act and Real Estate Settlement Procedures Act.
The Bank is actively working to manage its CRE concentration and the management has discussed the CRE Concentration Guidance with the FDIC and believes that the Bank’s underwriting policies, management information systems, independent credit administration process, and monitoring of real estate loan concentrations are currently sufficient to address the CRE Concentration Guidance. 18 Consumer Financial Services Banks and other financial institutions are subject to numerous laws and regulations intended to protect consumers in their transactions with banks.
The Bank is actively working to manage its CRE concentration and the management has discussed the CRE Concentration Guidance with the FDIC and believes that the Bank’s underwriting policies, management information systems, independent credit administration process, and monitoring of real estate loan concentrations are currently sufficient to address the CRE Concentration Guidance. 19 Consumer Financial Services Banks and other financial institutions are subject to numerous laws and regulations intended to protect consumers in their transactions with banks.
In addition, the Federal Reserve policy requires that bank holding companies consult with and inform the Federal Reserve in advance of (i) redeeming or repurchasing capital instruments when experiencing financial weakness and (ii) redeeming or repurchasing common stock and perpetual preferred stock if the result will be a net reduction in the amount of such capital instruments outstanding for the quarter in which the reduction occurs. 15 The Bank General The Bank is a California-chartered bank.
In addition, the Federal Reserve policy requires that bank holding companies consult with and inform the Federal Reserve in advance of (i) redeeming or repurchasing capital instruments when experiencing financial weakness and (ii) redeeming or repurchasing common stock and perpetual preferred stock if the result will be a net reduction in the amount of such capital instruments outstanding for the quarter in which the reduction occurs. 16 The Bank General The Bank is a California-chartered bank.
In addition, the loan policies provide guidelines for: personal guarantees; an environmental review; loans to employees, executive officers and directors; problem loan identification; maintenance of an adequate ACL and other matters relating to lending practices. 5 Loan Category The Company’s loan portfolio consists primarily of three major categories: CRE, C&I and consumer loans.
In addition, the loan policies provide guidelines for: personal guarantees; an environmental review; loans to employees, executive officers and directors; problem loan identification; maintenance of an adequate ACL and other matters relating to lending practices. 6 Loan Category The Company’s loan portfolio consists primarily of three major categories: CRE, C&I and consumer loans.
In addition, the collateral securing C&I loans generally includes moveable properties such as equipment and inventory, which may decline in value more rapidly than anticipated exposing us to increased credit risks. As a result of these additional complexities, variables and risks, C&I loans require extensive underwriting and servicing. 7 Consumer Loans .
In addition, the collateral securing C&I loans generally includes moveable properties such as equipment and inventory, which may decline in value more rapidly than anticipated exposing us to increased credit risks. As a result of these additional complexities, variables and risks, C&I loans require extensive underwriting and servicing. 8 Consumer Loans .
In addition, under the Basel III Capital Rule, institutions must maintain a capital conservation buffer of 2.5% in CET1 attributable to avoid restrictions on dividend payments. See “Supervision and Regulation - Regulatory Capital Requirements” above. As described above, the Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of December 31, 2024.
In addition, under the Basel III Capital Rule, institutions must maintain a capital conservation buffer of 2.5% in CET1 attributable to avoid restrictions on dividend payments. See “Supervision and Regulation - Regulatory Capital Requirements” above. As described above, the Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of December 31, 2025.
The rules provide for an exemption from most of these requirements for “small servicers,” which are defined as loan servicers that service 5,000 or fewer mortgage loans and service only mortgage loans that they or an affiliate originated or own. 19 Enforcement Powers of Federal and State Banking Agencies The federal bank regulatory agencies have broad enforcement powers.
The rules provide for an exemption from most of these requirements for “small servicers,” which are defined as loan servicers that service 5,000 or fewer mortgage loans and service only mortgage loans that they or an affiliate originated or own. 20 Enforcement Powers of Federal and State Banking Agencies The federal bank regulatory agencies have broad enforcement powers.
A banking organization that experiences a computer-security incident to notify its primary Federal regulator of the occurrence of an event that rises to the level of a “notification incident” as soon as possible and no later than 36 hours after the banking organization has determined that a notification incident has occurred. 17 Community Reinvestment Act Requirements The CRA is intended to encourage banks to help meet the credit needs of their entire communities, including low- and moderate-income neighborhoods, consistent with safe and sound operations.
A banking organization that experiences a computer-security incident must notify its primary Federal regulator of the occurrence of an event that rises to the level of a “notification incident” as soon as possible and no later than 36 hours after the banking organization has determined that a notification incident has occurred. 18 Community Reinvestment Act Requirements The CRA is intended to encourage banks to help meet the credit needs of their entire communities, including low- and moderate-income neighborhoods, consistent with safe and sound operations.
The Bank has chosen not to opt into the community bank leverage ratio. 13 Prompt Corrective Action The Federal Deposit Insurance Act, as amended (the “FDIA”), requires federal banking agencies to take prompt corrective action in response to depository institutions that do not meet minimum capital requirements.
The Bank has chosen not to opt into the community bank leverage ratio. 14 Prompt Corrective Action The Federal Deposit Insurance Act, as amended (the “FDIA”), requires federal banking agencies to take prompt corrective action in response to depository institutions that do not meet minimum capital requirements.
As of December 31, 2024, the Bank’s capital ratios exceeded the minimum required to be “well-capitalized” for purposes of the prompt corrective action regulations. The Company General The Company, as the sole shareholder of the Bank, is a registered bank holding company under the BHCA.
As of December 31, 2025, the Bank’s capital ratios exceeded the minimum required to be “well-capitalized” for purposes of the prompt corrective action regulations. The Company General The Company, as the sole shareholder of the Bank, is a registered bank holding company under the BHCA.
The Tier 1 leverage ratio is the ratio of the institution’s Tier 1 capital to its average total consolidated assets. 12 The Basel III Capital Rules provide for a number of deductions from and adjustments to CET1.
The Tier 1 leverage ratio is the ratio of the institution’s Tier 1 capital to its average total consolidated assets. 13 The Basel III Capital Rules provide for a number of deductions from and adjustments to CET1.
Undercapitalized institutions are generally not permitted to accept, renew, or roll over brokered deposits. As of December 31, 2024, the Bank was eligible to accept brokered deposits without a waiver from FDIC.
Undercapitalized institutions are generally not permitted to accept, renew, or roll over brokered deposits. As of December 31, 2025, the Bank was eligible to accept brokered deposits without a waiver from FDIC.
The Company and the Bank may, however, incur costs if they are required to adopt additional policies and systems to ensure compliance with certain provisions of the Volcker Rule in the future. 20
The Company and the Bank may, however, incur costs if they are required to adopt additional policies and systems to ensure compliance with certain provisions of the Volcker Rule in the future. 21
In addition, all residential mortgage loans contain due-on-sale clauses providing that the Bank may declare the unpaid amount due and payable upon the sale of the property securing the loan. As of December 31, 2024 and 2023, approximately 87.0% and 86.2%, respectively, of residential mortgage loans were ARM loans.
In addition, all residential mortgage loans contain due-on-sale clauses providing that the Bank may declare the unpaid amount due and payable upon the sale of the property securing the loan. As of December 31, 2025 and 2024, approximately 86.1% and 87.0%, respectively, of residential mortgage loans were ARM loans.
As of December 31, 2024, the Bank’s capital ratios exceeded the required minimums under the Basel III Capital Rules, including the capital conservation buffer.
As of December 31, 2025, the Bank’s capital ratios exceeded the required minimums under the Basel III Capital Rules, including the capital conservation buffer.
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. U.S. Treasury’s Office of Foreign Assets Control (“OFAC”), administers and enforces economic and trade sanctions against targeted foreign countries and regimes under authority of various laws, including designated foreign countries, nationals and others.
Regulatory authorities may also impose cease and desist orders and civil money penalties against institutions found to be violating these obligations. U.S. Treasury’s Office of Foreign Assets Control (“OFAC”), administers and enforces economic and trade sanctions against targeted foreign countries and regimes under authority of various laws, including designated foreign countries, nationals and others.
The Company operates in highly competitive market areas. The Company faces strong competition among the banks servicing the Korean-American community, as well as other commercial banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, marketplace finance platforms, money market funds, credit unions, and other alternative investments.
The Company faces strong competition among the banks servicing the Korean-American community, as well as other commercial banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, marketplace finance platforms, money market funds, credit unions, and other alternative investments.
While the Company believes it is well positioned within this highly competitive industry, the industry could become even more competitive as a result of legislative, regulatory, economic, and technological changes, as well as continued consolidation within the industry. Human Capital As of December 31, 2024, the Company had a total of 259 full-time employees and 4 part-time employees.
While the Company believes it is well positioned within this highly competitive industry, the industry could become even more competitive as a result of legislative, regulatory, economic, and technological changes, as well as continued consolidation within the industry. Human Capital As of December 31, 2025, the Company had a total of 262 full-time employees and 3 part-time employees.
As of December 31, 2024, using regulatory definitions in the CRE Concentration Guidance, the Bank’s CRE loans represented 297.0% of total risk-based capital, as compared to 280.7%, 253.9% and 269.8% as of December 31, 2023, 2022 and 2021, respectively.
As of December 31, 2025, using regulatory definitions in the CRE Concentration Guidance, the Bank’s CRE loans represented 307.7% of total risk-based capital, as compared to 297.0%, 280.7% and 253.9% as of December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2024, total deposits were $2.62 billion, and the average cost of deposits was 3.72% for the year ended December 31, 2024. For additional information, see Note 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
As of December 31, 2025, total deposits were $2.80 billion, and the average cost of deposits was 3.33% for the year ended December 31, 2025. For additional information, see Note 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
During the year ended December 31, 2024, the Bank paid supervisory assessments to the CDFPI totaling $273 thousand. Dividend Payments The primary source of funds for the Company is dividends from the Bank.
During the year ended December 31, 2025, the Bank paid supervisory assessments to the CDFPI totaling $289 thousand. Dividend Payments The primary source of funds for the Company is dividends from the Bank.
The Company strives to retain an attractive deposit mix from both large and small customers as well as a broad market reach. As of December 31, 2024, the Company’s top 10 customers, excluding wholesale deposits, accounted for 7.3% of total deposits.
The Company strives to retain an attractive deposit mix from both large and small customers as well as a broad market reach. As of December 31, 2025, the Company’s top 10 customers, excluding wholesale deposits, accounted for 9.6% of total deposits.
Core deposits, defined as all deposits except for time deposits exceeding $250,000 and internet or brokered deposits, are the primary and most valuable low-cost funding source for the lending business, and represented 57.7% of total deposits as of December 31, 2024.
Core deposits, defined as all deposits except for time deposits exceeding $250,000 and internet or brokered deposits, are the primary and most valuable low-cost funding source for the lending business, and represented 64.6% of total deposits as of December 31, 2025.
Regulatory authorities routinely examine financial institutions for compliance with these obligations, and failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.
Regulatory authorities routinely examine financial institutions for compliance with these obligations, and failure of a financial institution to maintain and implement adequate AML/CFT programs, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions or new branch offices when regulatory approval is required or to prohibit such transactions even if approval is not required.
As of December 31, 2024, the largest aggregate carrying value of loans that the Bank had outstanding to any one borrower and related entities was $57.7 million, which were performing at that date. 4 Risk Governance The Company maintains a conservative credit culture with strict underwriting standards.
As of December 31, 2025, the largest aggregate carrying value of loans that the Bank had outstanding to any one borrower and related entities was $58.1 million, which were performing at that date. 5 Risk Governance The Company maintains a conservative credit culture with strict underwriting standards.
The funds are used to finance a residential mortgage or CRE loan that a borrower uses to purchase property or refinance an existing loan. Commercial term loans (usually five to seven years) normally provide for monthly payments of both principal and interest. C&I SBA loans usually have a longer maturity (seven to ten years).
The funds are ultimately used to finance residential mortgages to purchase property or to refinance existing CRE loans. Commercial term loans (usually five to seven years) normally provide for monthly payments of both principal and interest. C&I SBA loans usually have a longer maturity (seven to ten years).
Future services may also be significantly influenced by improvements and developments in technology and evolving state and federal laws and regulations. 10 Market Area and Competition The Company is headquartered in Los Angeles, California and operates 11 full-service branches in Los Angeles and Orange Counties, California, three full-service branches on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and four LPOs located in Los Angeles and Orange Counties, California; Bellevue, Washington; and Atlanta, Georgia as of December 31, 2024.
Future services may also be significantly influenced by improvements and developments in technology and evolving state and federal laws and regulations. 11 Market Area and Competition The Company is headquartered in Los Angeles, California and operates nine full-service branches in Los Angeles and Orange Counties, California, three full-service branches on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and one full-service branch in Georgia (Suwanee) as of December 31, 2025.
During the year ended December 31, 2024, the Bank paid $1.3 million in aggregate FDIC deposit insurance premiums.
During the year ended December 31, 2025, the Bank paid $1.5 million in aggregate FDIC deposit insurance premiums.
Wholesale deposits are also utilized to supplement core retail deposits for funding purposes, including brokered accounts and California State Treasurer’s time deposits. As of December 31, 2024, wholesale deposits totaled $502.3 million, or 19.2% of total deposits.
Wholesale deposits are also utilized to supplement core retail deposits for funding purposes, including brokered accounts and California State Treasurer’s time deposits. As of December 31, 2025, wholesale deposits totaled $340.5 million, or 12.2% of total deposits.
As of December 31, 2024, the Bank’s lending limit was approximately $57.9 million per borrower for unsecured loans. In addition to unsecured loans, the Bank is permitted to make collateral-secured loans in an additional amount of up to 10% (for combined total of 25%) for a total of approximately $96.4 million to one borrower as of December 31, 2024.
As of December 31, 2025, the Bank’s lending limit was approximately $61.8 million per borrower for unsecured loans. In addition to unsecured loans, the Bank is permitted to make collateral-secured loans in an additional amount of up to 10% (for combined total of 25%) for a total of approximately $103.0 million to one borrower as of December 31, 2025.
Because the Company’s total consolidated assets exceeded the $3.0 billion as of December 31, 2024, the Company is now subject to Federal Reserve’s consolidated capital requirements separate and in addition to those of the Bank.
The Company’s total consolidated assets exceeded the $3.0 billion threshold as of December 31, 2024, at which time the Company became subject to Federal Reserve’s consolidated capital requirements separate and in addition to those of the Bank.
SBA loans are originated through the branch staff, lending officers, LPO managers, marketing officers, and brokers. As of December 31, 2024, CRE SBA and C&I SBA loans totaled $129.6 million (including loans held-for-sale of $4.0 million) and $23.6 million (including loans held-for-sale of $2.3 million), respectively. 8 Loan Participations .
SBA loans are originated through the branch staff, lending officers, marketing officers, and brokers. As of December 31, 2025, CRE SBA and C&I SBA loans totaled $129.4 million (including loans held-for-sale of $6.5 million) and $29.2 million (including loans held-for-sale of $5.6 million), respectively. 9 Loan Participations .
As of December 31, 2024, the Bank is a single operating segment that operates 11 full-service branches in Los Angeles and Orange Counties, California, three full-service branches on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and four loan production offices (“LPOs”) located in Los Angeles and Orange Counties, California; Bellevue, Washington; and Atlanta, Georgia.
As of December 31, 2025, the Bank is a single operating segment that operates nine full-service branches in Los Angeles and Orange Counties, California, three full-service branches on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), two full-service branches in Texas (Carrollton and Dallas), and one full-service branch in Georgia (Suwanee).
As of December 31, 2024, the Company had no outstanding FHLB advances and maintained additional borrowing capacity of $722.4 million. The Company also maintains overnight federal funds lines with correspondent financial institutions. The Company had an overnight borrowing of $15.0 million and unused borrowing capacity of $50.0 million at December 31, 2024.
As of December 31, 2025, the Company had overnight FHLB advances of $34.0 million and maintained additional borrowing capacity of $840.6 million. The Company also maintains overnight federal funds lines with correspondent financial institutions. The Company has no outstanding borrowings and unused borrowing capacity of $65.0 million at December 31, 2025.
The Bank received a “satisfactory” rating on its most recent CRA performance evaluation, dated July 29, 2024. On October 24, 2024, the federal banking agencies issued a final rule to strengthen and modernize the CRA regulations.
The Bank received a “satisfactory” rating on its most recent CRA performance evaluation, dated July 29, 2024.
The reports, proxy statements and other information that the Company files with the SEC, as well as news releases, are available free of charge through the Company’s website at www.mypcbbank.com. This information can be found under the “Investor Relations” link on the website.
The principal executive office of the Company is located at 3701 Wilshire Boulevard, Suite 900, Los Angeles, California 90010, and its telephone number is (213) 210-2000. The reports, proxy statements and other information that the Company files with the SEC, as well as news releases, are available free of charge through the Company’s website at www.mypcbbank.com.
The Bank offers a broad range of loans, deposits, and other products and services predominantly to small and middle market businesses and individuals. The principal executive office of the Company is located at 3701 Wilshire Boulevard, Suite 900, Los Angeles, California 90010, and its telephone number is (213) 210-2000.
The Bank also has loan originators of primarily SBA loans in Washington. The Bank offers a broad range of loans, deposits, and other products and services predominantly to small and middle market businesses and individuals.
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In order to develop a workforce that aligns with the Company’s corporate values, it regularly sponsors local community events so that its employees can better integrate themselves in communities. The Company believes that employees’ well-being and personal and professional development is fostered by outreach to the communities it serves.
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This information can be found under the “Investor Relations” link on the website.
Removed
The Company’s employees’ desire for active community involvement enables the Company to sponsor a number of local community events and initiatives, including hosting an annual PCB scholarship that provides financial assistance to local low-to-moderate income communities, conducting financial literacy training to seniors in affordable housing facilities, and participating in the Volunteer Income Tax Assistance annually to assist the community in free tax preparation. 11 Supervision and Regulation General Depository institutions, their holding companies and their affiliates are extensively regulated under U.S. federal and state law.
Added
The Company also has loan originators of primarily SBA loans in Washington. The Company operates in highly competitive market areas.
Removed
Under the final rule, banks with assets of at least $600 million as of December 31 in both of the prior two calendar years and less than $2 billion as of December 31 in either of the prior two calendar years will be an “intermediate bank,” and banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate bank classified as large banks, such as the Bank, under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.
Added
As part of the Company’s human capital strategy, we seek to foster a workforce that reflects our corporate values and is actively engaged in the communities we serve. The Company believes that employee well‑being and professional development are strengthened when employees participate in meaningful community outreach activities.
Removed
The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.
Added
To support this objective, the Company regularly sponsors community outreach programs that provide employees with opportunities to build local connections and contribute to community development initiatives.
Removed
Anti-Money Laundering and Office of Foreign Assets Control Regulation The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”), is designed to deny terrorists and criminals the ability to obtain access to the U.S. financial system and has significant implications for depository institutions, brokers, dealers and other businesses involved in the transfer of money.
Added
Our employees’ strong interest in civic involvement enables the Company to support a range of recurring community programs, including: • Annual PCB Scholarship Program, which provides financial assistance to graduating high school students from low‑to‑moderate‑income families; • Financial literacy training delivered to seniors residing in affordable housing facilities; and • Participation in the Volunteer Income Tax Assistance program, through which employees assist eligible individuals with free tax preparation services.
Added
These initiatives support our commitment to community reinvestment and contribute to the personal and professional development of our employees, while promoting stronger relationships within the communities in which we operate. 12 Supervision and Regulation General Depository institutions, their holding companies and their affiliates are extensively regulated under U.S. federal and state law.
Added
Anti-Money Laundering The BSA, as amended by, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”), and its implementing regulations and other laws and regulations that impose anti-money laundering obligations require financial institutions among other duties, implement and maintain an effective anti-money laundering and countering the financing of terrorism (“AML/CFT”) compliance program and file reports, such as suspicious activity reports and currency transaction reports.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+10 added−10 removed173 unchanged
Biggest changeNegative developments in the financial industry and the impact of new legislation and regulation in response to those developments could negatively impact our business operations and adversely impact our financial performance. 32 We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.
Biggest changeWe are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions. The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations prohibit discriminatory lending practices by financial institutions.
If general economic conditions negatively impact the markets in which we operate and small to medium-sized businesses are adversely affected or our borrowers are otherwise affected by adverse business developments, our business, financial condition and results of operations may be adversely affected. Real estate construction loans are based upon estimates of costs and values associated with the complete project.
If general economic conditions negatively impact the markets in which we operate and small to medium-sized businesses are adversely affected or our borrowers are otherwise affected by adverse business developments, our business, financial condition and results of operations may be adversely affected. 29 Real estate construction loans are based upon estimates of costs and values associated with the complete project.
Further, we generally retain the non-guaranteed portions of the SBA loans that we originate and sell, and to the extent the borrowers of such loans experience financial difficulties, our financial condition and results of operations could be adversely impacted. 26 Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans.
Further, we generally retain the non-guaranteed portions of the SBA loans that we originate and sell, and to the extent the borrowers of such loans experience financial difficulties, our financial condition and results of operations could be adversely impacted. Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans.
For example, our borrowers may have collateral properties located in coastal areas at risk to rise in sea level. The properties pledged as collateral on our loan portfolio could also be damaged by tsunamis, floods, earthquakes or wildfires and thereby the recoverability of loans could be impaired.
For example, our borrowers may have collateral properties located in coastal areas at risk to rise in sea level. The properties pledged as collateral in our loan portfolio could also be damaged by tsunamis, floods, earthquakes or wildfires and thereby the recoverability of loans could be impaired.
The FDIC may become concerned about our CRE loan concentrations, and they may inhibit our organic growth by restricting our ability to execute on our strategic plan. Our residential mortgage loan product consists primarily of non-qualified residential mortgage loans which may be considered riskier and less liquid than qualified residential mortgage loans.
The FDIC may become concerned about our CRE loan concentrations, and they may inhibit our organic growth by restricting our ability to execute on our strategic plan. 28 Our residential mortgage loan product consists primarily of non-qualified residential mortgage loans which may be considered riskier and less liquid than qualified residential mortgage loans.
Any such failure in our analytical models could result in losses that could have a material adverse effect on our business, financial condition and results of operations. 30 Our allowance for credit losses may not be adequate to cover actual losses in our loan portfolio.
Any such failure in our analytical models could result in losses that could have a material adverse effect on our business, financial condition and results of operations. Our allowance for credit losses may not be adequate to cover actual losses in our loan portfolio.
The BSA, the Patriot Act and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective AML program and to file reports such as suspicious activity reports and currency transaction reports. We are required to comply with these and other AML requirements.
The BSA, the Patriot Act and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective AML/CFT program and to file reports such as suspicious activity reports and currency transaction reports. We are required to comply with these and other AML/CFT requirements.
If these factors lead to financial strain on our borrowers, we may experience increased credit risk, higher loan delinquencies, and a potential decline in loan demand. A prolonged trade tensions or the implementation of tariffs could negatively impact the broader economic environment, potentially leading to reduced consumer spending, lower economic growth, and decreased demand for other banking products and services.
If these factors lead to financial strain on our borrowers, we may experience increased credit risk, higher loan delinquencies, and a potential decline in loan demand. 34 Prolonged trade tensions or the ongoing implementation of tariffs could negatively impact the broader economic environment, potentially leading to reduced consumer spending, lower economic growth, and decreased demand for other banking products and services.
In addition, we expect that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of our products and services and those developed by our third-party partners. 24 Our business depends on our ability to attract and retain Korean-American immigrants as clients.
In addition, we expect that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of our products and services and those developed by our third-party partners. 25 Our business depends on our ability to attract and retain Korean-American immigrants as clients.
The continued evolution and increased usage of artificial intelligence technologies may further increase these risks. 23 Other potential attacks have attempted to obtain unauthorized access to confidential information, steal money, or manipulate or destroy data, often through the introduction of computer viruses or malware, cyber-attacks and other means.
The continued evolution and increased usage of artificial intelligence technologies may further increase these risks. 24 Other potential attacks have attempted to obtain unauthorized access to confidential information, steal money, or manipulate or destroy data, often through the introduction of computer viruses or malware, cyber-attacks and other means.
Our business and operations are sensitive to general business and economic conditions in the U.S., generally, and particularly the state of California and the Los Angeles/Orange County region, as well as the greater New York City/New Jersey metropolitan area and Dallas, Texas, where our branch offices are located.
Our business and operations are sensitive to general business and economic conditions in the U.S., generally, and particularly the state of California and the Los Angeles/Orange County region, as well as the greater New York City/New Jersey metropolitan area, Texas and Georgia,, where our branch offices are located.
As a result of these geographic concentrations, our results depend largely upon economic and business conditions in these areas.
As a result of these geographic and demographics concentrations, our results depend largely upon economic and business conditions in these areas.
Real estate market volatility and future changes in our disposition strategies could result in net proceeds that differ significantly from our other real estate owned fair value appraisals. As of December 31, 2024, we had no OREO on our books.
Real estate market volatility and future changes in our disposition strategies could result in net proceeds that differ significantly from our other real estate owned fair value appraisals. As of December 31, 2025, we had no OREO on our books.
The impact of the Trump administration’s policy changes regarding international trade, tariffs, renewable energy, immigration, domestic taxation, among other actions and policies of the current administration, may have on economic and market conditions is uncertain.
The impact of the current administration’s ongoing policy changes regarding international trade, tariffs, renewable energy, immigration, domestic taxation, among other actions and policies of the current administration, may have on economic and market conditions is uncertain.
If our policies, procedures and systems are deemed deficient, we would be subject to liabilities, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed acquisition and certain aspects of our business plan.
If our policies, procedures and systems are deemed deficient, we would be subject to liabilities, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with acquisitions and certain aspects of our business plan.
We intend to continue to grow our business through organic loan and deposit growth, and we anticipate that much of our future growth will be dependent on our ability to successfully implement our organic growth strategy, which may include establishing additional branches or LPOs in new or existing markets.
We intend to continue to grow our business through organic loan and deposit growth, and we anticipate that much of our future growth will be dependent on our ability to successfully implement our organic growth strategy, which may include establishing additional branches or new loan production offices in new or existing markets.
Real estate construction loans, including land development loans, comprised approximately 0.8% of our total loans held-for-investment portfolio as of December 31, 2024, and such lending involves additional risks because funds are advanced upon the security of the project, which is of uncertain value prior to its completion, and costs may exceed realizable values in declining real estate markets.
Real estate construction loans, including land development loans, comprised 0.7% of our total loans held-for-investment portfolio as of December 31, 2025, and such lending involves additional risks because funds are advanced upon the security of the project, which is of uncertain value prior to its completion, and costs may exceed realizable values in declining real estate markets.
At December 31, 2024, approximately 81.6% of our loans held-for-investment portfolio was comprised of loans with real estate as a primary or secondary component of collateral. As a result, adverse developments affecting real estate values in our market areas could increase the credit risk associated with our real estate loan portfolio.
At December 31, 2025, approximately 81.7% of our loans held-for-investment portfolio was comprised of loans with real estate as a primary or secondary component of collateral. As a result, adverse developments affecting real estate values in our market areas could increase the credit risk associated with our real estate loan portfolio.
For example, bank regulators have issued guidance which refer to as the CRE Concentration Guidance that identifies certain CRE concentration levels that, if exceeded, will expose an institution to additional supervisory analysis with regard to the institution’s CRE concentration risk.
For example, bank regulators have issued guidance (referred to as the CRE Concentration Guidance) that identifies certain CRE concentration levels that, if exceeded, will expose an institution to additional supervisory analysis with regard to the institution’s CRE concentration risk.
These factors could materially affect our business, financial condition, and results of operations. Item 1B. Unresolved Staff Comments None. 33
These factors could materially affect our business, financial condition, and results of operations. Item 1B. Unresolved Staff Comments None. 35
Our primary market is located in an earthquake-prone zone in California, which is also subject to other weather or disasters, such as severe rainstorms, wildfire or flood, as well as health epidemics or pandemics (or expectations about them). These events could interrupt our business operations unexpectedly. Climate-related physical changes and hazards could also pose credit risks for us.
Our primary market is located in California, which is subject to earthquakes and other weather or disasters, such as severe rainstorms, wildfire or flood, as well as health epidemics or pandemics (or expectations about them). These events could interrupt our business operations unexpectedly. Climate-related physical changes and hazards could also pose credit risks for us.
Pursuant to the CRE Concentration Guidelines, loans secured by owner-occupied CRE are not included for purposes of CRE Concentration calculation. As of December 31, 2024, using regulatory definitions in the CRE Concentration Guidance, our CRE loans represented 297.0% of our total risk-based capital, as compared to 280.7%, 253.9% and 269.8% as of December 31, 2023, 2022 and 2021, respectively.
Pursuant to the CRE Concentration Guidelines, loans secured by owner-occupied CRE are not included for purposes of CRE Concentration calculation. As of December 31, 2025, using regulatory definitions in the CRE Concentration Guidance, our CRE loans represented 307.7% of our total risk-based capital, as compared to 297.0%, 280.7% and 253.9% as of December 31, 2024, 2023 and 2022, respectively.
ACL on loans, expressed as a percentage of loans held-for-investment, was 1.16%, 1.19% and 1.22%, respectively, at December 31, 2024, 2023 and 2022. ACL is funded from a provision (reversal) for credit losses, which is a charge to our income statement.
ACL on loans, expressed as a percentage of loans held-for-investment, was 1.18%, 1.16% and 1.19%, respectively, at December 31, 2025, 2024 and 2023. ACL is funded from a provision (reversal) for credit losses, which is a charge to our income statement.
Our provision (reversal) for credit losses, was $3.4 million, $(132) thousand and $3.6 million, respectively, for the years ended December 31, 2024, 2023 and 2022. The determination of an appropriate level of ACL is an inherently difficult process and is based on numerous assumptions.
Our provision (reversal) for credit losses, was $4.0 million, $3.4 million and $(132) thousand, respectively, for the years ended December 31, 2025, 2024 and 2023. The determination of an appropriate level of ACL is an inherently difficult process and is based on numerous assumptions.
We could be exposed to risk of environmental liabilities with respect to properties to which we take title. In the course of our business, we may foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties.
In the course of our business, we may foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties.
The recognition of gains on the sale of loans and servicing asset valuations reflect certain assumptions. We expect that gains on the sale of U.S. government guaranteed loans, primarily 7(a) loans, will comprise a significant component of our revenue. The gains on such sales recognized for the year ended December 31, 2024 was $3.8 million.
The recognition of gains on the sale of loans and servicing asset valuations reflect certain assumptions. We expect that gains on the sale of U.S. government guaranteed loans, primarily 7(a) loans, will comprise a significant component of our revenue. The gains on such sales recognized for the year ended December 31, 2025 was $4.6 million.
The non-guaranteed portion of SBA loans that we retain on our balance sheet as well as the guaranteed portion of SBA loans that we sell could expose us to various credit and default risks. We originated $87.7 million and $83.0 million, respectively, of SBA loans (total commitment basis) during the years ended December 31, 2024 and 2023.
The non-guaranteed portion of SBA loans that we retain on our balance sheet as well as the guaranteed portion of SBA loans that we sell could expose us to various credit and default risks. We originated $119.4 million and $87.7 million, respectively, of SBA loans (total commitment basis) during the years ended December 31, 2025 and 2024.
The gain on sale of SBA loans was $3.8 million and $3.6 million, respectively, or 33.8% and 33.4%, respectively, of the total noninterest income, for the years ended December 31, 2024 and 2023.
The gain on sale of SBA loans was $4.6 million and $3.8 million, respectively, or 39.0% and 33.8%, respectively, of the total noninterest income, for the years ended December 31, 2025 and 2024.
As of December 31, 2024, our residential mortgage loan portfolio amounted to $392.5 million or 14.9% of our total loans held-for-investment portfolio. As of such date, all of our residential mortgage loans consisted of non-qualified residential mortgage loans. Non-qualified loans are residential loans that do not comply with certain standards set by the Dodd-Frank Act and its related regulations.
As of December 31, 2025, our residential mortgage loan portfolio amounted to $401.3 million or 14.3% of our total loans held-for-investment portfolio. As of such date, all of our residential mortgage loans consisted of non-qualified residential mortgage loans. Non-qualified loans are residential loans that do not comply with certain standards set by the Dodd-Frank Act and its related regulations.
Our net interest income exhibited a positive 4.7% sensitivity to rising interest rates and a negative 6.2% sensitivity to declining interest rates in a twelve-month 100 basis point parallel shock at December 31, 2024. 21 Changes in interest rates also can affect the value of loans, securities and other assets.
Our net interest income exhibited a positive 4.5% sensitivity to rising interest rates and a negative 5.7% sensitivity to declining interest rates in a twelve-month 100 basis point parallel shock at December 31, 2025. 22 Changes in interest rates also can affect the value of loans, securities and other assets.
Failures to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could reduce the Company’s ability to receive any necessary regulatory approvals for acquisitions or new branch openings.
Failures to maintain and implement adequate AML/CFT programs could also have serious reputational consequences for us. Any of these results could reduce the Company’s ability to receive any necessary regulatory approvals for acquisitions or new branch openings.
During the same time periods, we sold $71.1 million and $82.3 million, respectively, of the guaranteed portion of our SBA loans.
During the same time periods, we sold $85.8 million and $71.1 million, respectively, of the guaranteed portion of our SBA loans.
A general decline in real estate sales and prices across the U.S. or locally in the relevant real estate market, a decline in demand for residential property, economic weakness, high rates of unemployment and reduced availability of mortgage credit are some of the factors that can adversely affect the borrowers’ ability to repay their obligations to us and the value of our security interest in collateral, and thereby adversely affect our results of operations and financial results. 28 Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future.
A general decline in real estate sales and prices across the U.S. or locally in the relevant real estate market, a decline in demand for residential property, economic weakness, high rates of unemployment and reduced availability of mortgage credit are some of the factors that can adversely affect the borrowers’ ability to repay their obligations to us and the value of our security interest in collateral, and thereby adversely affect our results of operations and financial results.
For the year ended December 31, 2024, total loans were 87.5% of our average interest-earning assets.
For the year ended December 31, 2025, total loans were 87.4% of our average interest-earning assets.
Further, the criteria for our loans to be purchased by other investors may change from time to time, which could limit our ability to sell these loans in the secondary market. Mortgage production, including refinancing activity, historically declines in rising interest rate environments.
Further, the criteria for our loans to be purchased by other investors may change from time to time, which could limit our ability to sell these loans in the secondary market. Mortgage production, including refinancing activity, historically declines in rising interest rate environments. Consequently, if interest rates increase, our mortgage production may not continue at current levels.
As of December 31, 2024, our non-qualified residential mortgage loans had a weighted average LTV of 62.1% and a weighted average Fair Isaac Corporation (“FICO”) score of 777.
As of December 31, 2025, our non-qualified residential mortgage loans had a weighted average LTV of 62.0% and a weighted average Fair Isaac Corporation (“FICO”) score of 771.
In addition, we had $4.9 million in accruing loans that were 30-89 days past due as of December 31, 2024. Our NPAs adversely affect our net income in various ways.
In addition, we had $955 thousand in accruing loans that were 30-89 days past due as of December 31, 2025. Our NPAs adversely affect our net income in various ways.
A decline in economic and business conditions in our market areas or in Korea could have a material impact on our loan portfolio or the demand for our products or services, which in turn may have a material adverse effect on our financial condition and results of operations.
A decline in economic and business conditions in our market areas or in Korea could have a material impact on our loan portfolio or the demand for our products or services, which in turn may have a material adverse effect on our financial condition and results of operations. 32 Risks Related to Our Capital We are subject to stringent capital requirements.
In this event, as a result of the significant judgments required in estimating fair value and the variables involved in different methods of disposition, the net proceeds realized from such sales transactions could differ significantly from the appraisals, comparable sales and other estimates used to determine the fair value of our OREO properties.
In this event, as a result of the significant judgments required in estimating fair value and the variables involved in different methods of disposition, the net proceeds realized from such sales transactions could differ significantly from the appraisals, comparable sales and other estimates used to determine the fair value of our OREO properties. 30 We could be exposed to risk of environmental liabilities with respect to properties to which we take title.
Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to the Company. In the event that the Bank is unable to pay dividends to the Company, the Company may not be able to pay dividends to its shareholders and pay interest on the subordinated debentures.
Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to the Company. In the event that the Bank is unable to pay dividends to the Company, the Company may not be able to pay dividends to its shareholders or repurchase its outstanding shares.
Risks Related to Our Allowance for Credit Losses and Other Accounting Estimates Accounting estimates and risk management processes rely on analytical models that may prove inaccurate resulting in a material adverse effect on our business, financial condition and results of operations.
The loss of the services of any one of them could have a material adverse effect on our business, financial condition, results of operations and cash flows. 31 Risks Related to Our Allowance for Credit Losses and Other Accounting Estimates Accounting estimates and risk management processes rely on analytical models that may prove inaccurate resulting in a material adverse effect on our business, financial condition and results of operations.
We have a limited service area. This lack of geographic and ethnic diversification increases our risk profile. Our operations are conducted through 16 branches located principally in Los Angeles and Orange Counties of Southern California and to a lesser extent in Texas and the New York/New Jersey region.
We have a limited service area. This lack of geographic and ethnic diversification increases our risk profile. Our operations are conducted through 15 branches located principally in Los Angeles and Orange Counties of Southern California and to a lesser extent in Georgia, Texas and the New York/New Jersey regions. Our business focuses on Korean-American individuals and businesses in these markets.
The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services, including the use of artificial intelligence and machine learning to interact with customers and review to review and analyze data.
The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services, including the use of artificial intelligence and machine learning to interact with customers and to review and analyze data. In addition to allowing us to better serve customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs.
At December 31, 2024 we had $2.23 billion of commercial loans, consisting of $1.75 billion of CRE loans and $472.8 million of C&I loans, for which real estate is not the primary source of collateral. Commercial loans represented 84.6% of our total loan portfolio at December 31, 2024.
At December 31, 2025 we had $2.41 billion of commercial loans, consisting of $1.90 billion of CRE loans and $508.7 million of C&I loans, for which real estate is not the primary source of collateral. Commercial loans represented 85.5% of our total loan portfolio at December 31, 2025.
We originated non-qualified residential mortgage loans of $36.0 million and $63.4 million, respectively, for the years ended December 31, 2024 and 2023. We originated qualified residential mortgage loans of $0 thousand and $0 thousand, respectively, for the years ended December 31, 2024 and 2023.
We originated non-qualified residential mortgage loans of $65.3 million and $36.0 million, respectively, for the years ended December 31, 2025 and 2024. We originated no qualified residential mortgage loans for the years ended December 31, 2025 or 2024.
Our cost of deposits increased from 2.87% for the year ended December 31, 2023, to 3.72% for the year ended December 31, 2024.
Our cost of deposits decreased from 3.72% for the year ended December 31, 2024, to 3.33% for the year ended December 31, 2025.
The Bank maintained brokered deposits of $442.3 million and $303.7 million, respectively, and deposits from California State Treasurer of $60.0 million and $60.0 million, respectively, at December 31, 2024 and 2023. Federal banking law and regulation place restrictions on depository institutions regarding brokered deposits.
Our largest depositor relationship accounted for approximately 1.4% of our deposits at December 31, 2025. The Bank maintained brokered deposits of $280.5 million and $442.3 million, respectively, and deposits from California State Treasurer of $60.0 million and $60.0 million, respectively, at December 31, 2025 and 2024. Federal banking law and regulation place restrictions on depository institutions regarding brokered deposits.
Significant errors in assumptions used to compute gains on sale of these loans or servicing asset valuations could result in material revenue misstatements, which may have a material adverse effect on our business, results of operations and profitability.
Significant errors in assumptions used to compute gains on sale of these loans or servicing asset valuations could result in material revenue misstatements, which may have a material adverse effect on our business, results of operations and profitability. 27 If we breach any of the representations or warranties we make to a purchaser of our mortgage loans, we may be liable to the purchaser for certain costs and damages.
The failure to meet applicable regulatory capital requirements could result in one or more of our regulators placing limitations or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities, and could affect customer and investor confidence, our costs of funds and FDIC insurance costs, our ability to pay dividends on our common stock, our ability to make acquisitions, and our business, results of operations and financial conditions, generally. 31 We may need to raise additional capital in the future, and if we fail to maintain sufficient capital, whether due to losses, an inability to raise additional capital or otherwise, our financial condition, liquidity and results of operations, as well as our ability to maintain regulatory compliance, would be adversely affected.
The failure to meet applicable regulatory capital requirements could result in one or more of our regulators placing limitations or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities, and could affect customer and investor confidence, our costs of funds and FDIC insurance costs, our ability to pay dividends on our common stock, our ability to make acquisitions, and our business, results of operations and financial conditions, generally.
Any significant deterioration in economic and business conditions in our service areas could have a material adverse impact on the quality of our loan portfolio and the demand for our products and services, which in turn could have a material adverse effect on our results of operations.
Any significant deterioration in economic and business conditions in our service areas or in the Korean-American community could have a material adverse impact on the quality of our loan portfolio and the demand for our products and services, which in turn could have a material adverse effect on our results of operations. 26 We may not qualify to repurchase our Series C Preferred Stock on favorable terms.
The demand for the deposit products we offer may also be reduced due to a variety of factors, such as demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, regulatory actions that decrease customer access to particular products, or the availability of competing products. 29 A large percentage of our deposits is attributable to a relatively small number of customers, which could adversely affect our liquidity, financial condition and results of operations.
The demand for the deposit products we offer may also be reduced due to a variety of factors, such as demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, regulatory actions that decrease customer access to particular products, or the availability of competing products.
As we expand our business outside of California markets, we will encounter risks that could adversely affect us. We primarily operate in California markets with a concentration of Korean-American individuals and businesses as customers.
As we expand our business outside of California markets, we will encounter risks that could adversely affect us. We primarily operate in California markets with a concentration of Korean-American individuals and businesses as customers. We also currently have branch operations in New York, New Jersey, Georgia and Texas, and may evaluate additional branch expansion opportunities in other Korean-American populated markets.
We believe this management team, comprised principally of long-time employees who have worked in the banking industry for a number of years, is integral to implementing our business strategy. The loss of the services of any one of them could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We believe this management team, comprised principally of long-time employees who have worked in the banking industry for a number of years, is integral to implementing our business strategy.
As of December 31, 2024, we held $153.2 million of SBA loans on our balance sheet, $144.8 million of which consisted of the non-guaranteed portion of SBA loans and $8.4 million or 5.5% consisted of the guaranteed portion of SBA loans.
As of December 31, 2025, we held $158.6 million of SBA loans on our balance sheet, $146.0 million of which consisted of the non-guaranteed portion of SBA loans and $12.7 million or 8.0% consisted of the guaranteed portion of SBA loans.
We have grown our consolidated assets from $1.92 billion as of December 31, 2020 to $3.06 billion as of December 31, 2024, and our deposits from $1.59 billion as of December 31, 2020 to $2.62 billion as of December 31, 2024.
We have grown our consolidated assets from $2.15 billion as of December 31, 2021 to $3.28 billion as of December 31, 2025, and our deposits from $1.87 billion as of December 31, 2021 to $2.80 billion as of December 31, 2025.
If, as a result of an examination, a banking agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we were in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate.
If, as a result of an examination, a banking agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we were in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate. 33 Moreover, certain of these regulations contain significant punitive sanctions for violations, including monetary penalties and limitations on a bank’s ability to implement components of its business plan, such as expansion through mergers and acquisitions or the opening of new branch offices.
In addition, from time to time, the government agencies that guarantee these loans reach their internal limits and cease to guarantee future loans. In addition, these agencies may change their rules for qualifying loans or Congress may adopt legislation that would have the effect of discontinuing or changing the loan guarantee programs.
In addition, these agencies may change their rules for qualifying loans or Congress may adopt legislation that would have the effect of discontinuing or changing the loan guarantee programs. Therefore, if these changes occur, the volume of loans to small business and industrial borrowers of the types that now qualify for government guaranteed loans could decline.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations prohibit discriminatory lending practices by financial institutions. The U.S. Department of Justice, federal banking agencies and other federal agencies are responsible for enforcing these laws and regulations.
The U.S. Department of Justice, federal banking agencies and other federal agencies are responsible for enforcing these laws and regulations.
We also currently have branch operations in New York, New Jersey and Texas, and LPO operations in various states and may evaluate additional branch expansion opportunities in other Korean-American populated markets. In the course of this expansion, we will encounter significant risks and uncertainties that could have a material adverse effect on our operations.
In the course of this expansion, we will encounter significant risks and uncertainties that could have a material adverse effect on our operations.
As of December 31, 2024, our nonperforming loans (“NPLs”) held-for-investment totaled $4.7 million, or 0.18% of our loans held-for-investment portfolio. Our NPAs, which include NPLs and other real estate owned (“OREO”), totaled $4.7 million, or 0.15% of total assets.
Our NPAs, which include NPLs and other real estate owned (“OREO”), totaled $7.9 million, or 0.24% of total assets.
This could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 22 Adverse developments affecting the banking industry could have a material effect on our operations and/or stock price. During 2023, the high-profile failures of several depository institutions negatively impacted customer confidence in the safety and soundness of some regional and community banks.
Any of these circumstances could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 23 Adverse developments affecting the banking industry could have a material effect on our operations and/or stock price.
Consequently, if interest rates increase, our mortgage production may not continue at current levels. 27 Curtailment of government guaranteed loan programs could affect a segment of our business. A significant segment of our business consists of originating and periodically selling the U.S. government guaranteed loans, in particular those guaranteed by the SBA.
Curtailment of government guaranteed loan programs could affect a segment of our business. A significant segment of our business consists of originating and periodically selling the U.S. government guaranteed loans, in particular those guaranteed by the SBA. Presently, the SBA guarantees 75% to 85% of the principal amount of each qualifying SBA loan originated under the SBA’s 7(a) loan program.
Presently, the SBA guarantees 75% to 85% of the principal amount of each qualifying SBA loan originated under the SBA’s 7(a) loan program. The U.S. government may not maintain the SBA 7(a) loan program, and even if it does, such guaranteed portion may not remain at its current level.
The U.S. government may not maintain the SBA 7(a) loan program, and even if it does, such guaranteed portion may not remain at its current level. In addition, from time to time, the government agencies that guarantee these loans reach their internal limits and cease to guarantee future loans.
From time to time, banking regulators implement changes to these regulatory capital adequacy and liquidity guidelines.
We are subject to capital adequacy and liquidity rules and other regulatory requirements specifying minimum amounts and types of capital that must be maintained. From time to time, banking regulators implement changes to these regulatory capital adequacy and liquidity guidelines.
We have attempted to diversify some of our loan business through LPOs in two states; however, this diversification strategy may not be effective to reduce our geographic and ethnic concentrations. 25 Risks Related to Our Loans Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Shareholders’ Equity and Regulatory Capital - Emergency Capital Investment Program” Risks Related to Our Loans Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses.
Removed
In addition to allowing us to better serve customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs.
Added
During 2023, the high-profile failures of several depository institutions negatively impacted customer confidence in the safety and soundness of some regional and community banks.
Removed
If we breach any of the representations or warranties we make to a purchaser of our mortgage loans, we may be liable to the purchaser for certain costs and damages.
Added
On May 24, 2022, we sold shares of our Series C Preferred Stock to the U.S.
Removed
Therefore, if these changes occur, the volume of loans to small business and industrial borrowers of the types that now qualify for government guaranteed loans could decline.
Added
Treasury for the purchase price of $69.1 million under the Emergency Capital Investment Program, or “ECIP.” Under the ECIP program, the Treasury invested in depository institutions that are Community Development Financial Institutions or minority depository institutions (“MDIs”) to encourage lending to small businesses, minority-owned businesses and consumers in low-income and underserved communities.
Removed
Our ten largest depositor relationships, excluding wholesale deposits, accounted for approximately 7.3% of our deposits at December 31, 2024. Our largest depositor relationship accounted for approximately 1.3% of our deposits at December 31, 2024.
Added
In January of 2025, we entered into an ECIP Securities Purchase Option Agreement with Treasury that grants us or our qualifying designee may repurchase the Series C Preferred Stock, potentially at a substantial discount if we meet certain conditions (the “Repurchase Option”).
Removed
Operations in our LPOs have positively affected our results of operations, and sustaining these operations and growing loans may be more difficult than we expect, which could adversely affect our results of operations. We maintained four LPOs that primarily originate SBA loans as of December 31, 2024.
Added
To be eligible to exercise the Repurchase Option, we must, among other things, meet certain thresholds for “deep impact lending” or “qualified lending” (as defined in the ECIP’s guidelines), comply with the ECIP agreements and rules, continue to qualify as an MDI, and be “well-capitalized” under federal Prompt Corrective Action guidelines.
Removed
During the year ended December 31, 2024, these LPOs accounted for approximately 12.3% of new loans originated by the Bank. Sustaining the expansion of loan production through use of these out of state LPOs depends on a number of factors, including the continued strength of the markets in which our offices are located and identifying, hiring and retaining critical personnel.
Added
The earliest possible date by which we could exercise the repurchase options (assuming we meet all required conditions) is June 30, 2026. There can be no assurance that we will ever satisfy the lending and other requirements necessary to exercise the Repurchase Option. For additional information, see “Item 7.
Removed
The strength of these markets could be weakened by anticipated increases in interest rates and any economic downturn. Moreover, competition for successful business developers and relationship managers in the SBA loan industry is fierce, and we may not be able to attract and retain the personnel we need to profitably operate our LPOs.
Added
Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future. As of December 31, 2025, our nonperforming loans (“NPLs”) held-for-investment totaled $7.9 million, or 0.28% of our loans held-for-investment portfolio.
Removed
Unsuccessful operation of our out of state LPOs could negatively impact our financial condition and results of operation. Risks Related to Our Capital We are subject to stringent capital requirements. We are subject to capital adequacy and liquidity rules and other regulatory requirements specifying minimum amounts and types of capital that must be maintained.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−0 removed9 unchanged
Biggest changeThe Information Security Officer has Security+ and Network+ certifications and is currently working on obtaining CISSP. The Company’s cybersecurity risk management is integrated as part of its overall risk management program, and the Company’s Chief Risk Officer and Information Security Officer, in conjunction with Chief Information Officer, work together to develop and maintain the cybersecurity program.
Biggest changeThe Company’s cybersecurity risk management is integrated as part of its overall risk management program, and the Company’s Chief Risk Officer and Information Security Officer, in conjunction with Chief Information Officer, work together to develop and maintain the cybersecurity program.
The Company’s information security team has primary responsibility for overall cybersecurity risk management program. The Company’s cybersecurity professionals are led by the Information Security Officer, who has over 23 years of experience in the information technology field, including over 3 years of experience focusing solely on the cybersecurity space.
The Company’s information security team has primary responsibility for overall cybersecurity risk management program. The Company’s cybersecurity professionals are led by the Information Security Officer, who has over 25 years of experience in the information technology field, including over 3 years of experience focusing solely on the cybersecurity space.
Board members may attend Risk and Compliance Committee meetings where cybersecurity issues are discussed and have access to the materials for each Risk and Compliance Committee meeting. 34
Board members may attend Risk and Compliance Committee meetings where cybersecurity issues are discussed and have access to the materials for each Risk and Compliance Committee meeting. 36
Added
The Information Security Officer has Security+ and Network+ certifications and is currently working on obtaining Certified Information Systems Security Professional certification.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−1 removed0 unchanged
Biggest changeAs of December 31, 2024, the Bank maintained 16 branch locations, with eight in Los Angeles County (three in Koreatown, Rowland Heights, Downtown Fashion District, Cerritos, Torrance and Little Tokyo), three in Orange County (Fullerton, Buena Park and Irvine), three on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), and two in Texas (Carrollton and Dallas).
Biggest changeAs of December 31, 2025, the Bank maintained 15 branch locations, with seven in Los Angeles County (three in Koreatown, Rowland Heights, Downtown Fashion District, Cerritos, and Torrance), two in Orange County (Fullerton and Irvine), three on the East Coast (Bayside, New York; and Englewood Cliffs and Palisades Park, New Jersey), two in Texas (Carrollton and Dallas) and one in Georgia (Suwanee).
Item 2. Properties As of December 31, 2024, the Company’s headquarters office is located at 3701 Wilshire Boulevard, Suite 900, Los Angeles, California 90010.
Item 2. Properties As of December 31, 2025, the Company’s headquarters office is located at 3701 Wilshire Boulevard, Suite 900, Los Angeles, California 90010.
This office is located in the Wilshire Center/Koreatown District of Los Angeles and houses the Company’s management unit, including compliance and Bank Security Act groups, information technology, SBA lending management, branch management, CRE and C&I lending groups, credit administration and administrative groups. The lease expires in September 2033. The Bank leases all of its LPO and retail branch locations.
This office is located in the Wilshire Center/Koreatown District of Los Angeles and houses the Company’s management unit, including compliance and Bank Security Act groups, information technology, SBA lending management, branch management, CRE and C&I lending groups, credit administration and administrative groups. The lease expires in September 2033.
Removed
The Bank also maintained four LPOs located in Los Angeles and Orange Counties, California; Bellevue, Washington; and Atlanta, Georgia.
Added
The Bank leases all of its branch locations with expiration dates ranging from 2026 through 2035.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeThere were, however, no legal proceedings pending or known to be contemplated against us that in the opinion of management, would be expected to have a material adverse effect on the financial condition or results of operations of the Company or the Bank at December 31, 2024. Item 4. Mine Safety Disclosures Not applicable. 35 Part II
Biggest changeThere were, however, no legal proceedings pending or known to be contemplated against us that in the opinion of management, would be expected to have a material adverse effect on the financial condition or results of operations of the Company or the Bank at December 31, 2025. Item 4. Mine Safety Disclosures Not applicable. 37 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed8 unchanged
Biggest changeThe following table presents share repurchase activities during the periods indicated: ($ in thousands, except per share data) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Number of Shares That May Yet Be Purchased Under the Program From October 1, 2024 to October 31, 2024 — $ — — 577,777 From November 1, 2024 to November 30, 2024 — — — 577,777 From December 1, 2024 to December 31, 2024 — — — 577,777 Total — $ — — On August 2, 2023, the Company’s Board of Directors approved a new repurchase program authorizing the repurchase of up to 5% of the Company’s outstanding common stock, which represented 720,000 shares, through August 2, 2024.
Biggest changeThe following table presents share repurchase activities during the periods indicated: ($ in thousands, except per share data) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Number of Shares That May Yet Be Purchased Under the Program From October 1, 2025 to October 31, 2025 75,562 $ 20.66 75,562 246,448 From November 1, 2025 to November 30, 2025 25,776 21.37 25,776 220,672 From December 1, 2025 to December 31, 2025 1,146 21.44 1,146 219,526 Total 102,484 $ 20.85 102,484 During the year ended December 31, 2025, the Company repurchased and retired 358,251 shares of common stock at a weighted-average price of $19.82 per share under a stock repurchase program first approved by the Board of Directors on August 2, 2023 authorizing the repurchase of up to 720,000 shares.
Issuer Purchase of Equity Securities There were no unregistered sales of equity securities during the year ended December 31, 2024.
Issuer Purchase of Equity Securities There were no unregistered sales of equity securities during the year ended December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock (symbol: PCB) is listed on the NASDAQ Global Select Market. The approximate number of holders of record of the Company’s common stock as of December 31, 2024 was 239.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock (symbol: PCB) is listed on the NASDAQ Global Select Market. Based on the records of the Company’s transfer agent, the approximate number of holders of record of the Company’s common stock as of December 31, 2025 was 233.
On July 25, 2024, the Company announced the amendment of the 2023 stock repurchase program, which extended the program expiration from August 2, 2024 to August 1, 2025. During the year ended December 31, 2024, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88 per share.
During the year ended December 31, 2024, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88 per share. During the year ended December 31, 2023, the Company repurchased and retired 512,657 shares of common stock at a weighted-average price of $17.22 per share. Item 6. Reserved 38
As of December 31, 2024, the Company was authorized to purchase 577,777 additional shares under the 2023 stock repurchase plan. Item 6. Reserved 36
On July 23, 2025, the Company announced that the term of the stock repurchase program would be extended to July 31, 2026. As of December 31, 2025, the Company was authorized to purchase 219,526 additional shares under the stock repurchase program.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

2 edited+0 added−0 removed0 unchanged
Biggest changeFinancial Statements and Supplementary Data 68 Index to Consolidated Financial Statements 68 Report of Independent Registered Public Accounting Firm 69 Consolidated Balance Sheets as of December 31, 202 4 and 202 3 72 Consolidated Statements of Income for the Years Ended December 31, 202 4 , 202 3 and 202 2 73 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 4 , 202 3 and 20 2 2 74 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 202 4 , 202 3 and 202 2 75 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 4 , 202 3 and 202 2 76 Notes to Consolidated Financial Statements 78
Biggest changeFinancial Statements and Supplementary Data 69 Index to Consolidated Financial Statements 69 Report of Independent Registered Public Accounting Firm 70 Consolidated Balance Sheets as of December 31, 202 5 and 202 4 72 Consolidated Statements of Income for the Years Ended December 31, 2025, 2024 a nd 2023 73 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023 74 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023 75 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 76 Notes to Consolidated Financial Statements 78
Item 6. Reserved 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 66 Item 8.
Item 6. Reserved 38 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 67 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

82 edited+15 added−22 removed79 unchanged
Biggest changeThe following table presents the composition of the Company’s loans held-for-investment as of the dates indicated: December 31, 2024 2023 January 1, 2023 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Amount Percentage to Total Commercial real estate: Commercial property $ 940,931 35.9 % $ 855,270 36.8 % $ 772,020 37.8 % Business property 595,547 22.6 % 558,772 24.0 % 526,513 25.7 % Multifamily 194,220 7.4 % 132,500 5.7 % 124,751 6.1 % Construction 21,854 0.8 % 24,843 1.1 % 17,054 0.8 % Total commercial real estate 1,752,552 66.7 % 1,571,385 67.6 % 1,440,338 70.4 % Commercial and industrial 472,763 18.0 % 342,002 14.7 % 249,250 12.2 % Consumer: Residential mortgage 392,456 14.9 % 389,420 16.8 % 333,726 16.3 % Other consumer 11,616 0.4 % 20,645 0.9 % 22,749 1.1 % Total consumer 404,072 15.3 % 410,065 17.7 % 356,475 17.4 % Loans held-for-investment $ 2,629,387 100.0 % $ 2,323,452 100.0 % $ 2,046,063 100.0 % ACL on loans (30,628) (27,533) (26,009) Net loans held-for-investment $ 2,598,759 $ 2,295,919 $ 2,020,054 The following table presents the composition of the Company’s loans held-for-investment by legacy loan segments as of the dates indicated: December 31, 2022 2021 2020 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Amount Percentage to Total Real estate loans: Commercial property $ 1,288,392 63.0 % $ 1,105,843 63.9 % $ 880,736 55.5 % Residential property 333,726 16.3 % 209,485 12.1 % 198,431 12.5 % SBA property 134,892 6.6 % 129,661 7.5 % 126,570 8.0 % Construction 17,054 0.8 % 8,252 0.5 % 15,199 1.0 % Total real estate loans 1,774,064 86.7 % 1,453,241 84.0 % 1,220,936 77.0 % Commercial and industrial loans: Commercial term 77,700 3.8 % 73,438 4.2 % 87,250 5.5 % Commercial lines of credit 154,142 7.5 % 100,936 5.8 % 96,087 6.1 % SBA commercial term 16,211 0.8 % 17,640 1.0 % 21,878 1.4 % SBA PPP 1,197 0.1 % 65,329 3.8 % 135,654 8.6 % Total commercial and industrial loans 249,250 12.2 % 257,343 14.8 % 340,869 21.6 % Other consumer loans 22,749 1.1 % 21,621 1.2 % 21,773 1.4 % Loans held-for-investment 2,046,063 100.0 % 1,732,205 100.0 % 1,583,578 100.0 % Allowance for loan losses (24,942) (22,381) (26,510) Net loans held-for-investment $ 2,021,121 $ 1,709,824 $ 1,557,068 54 The following table presents activities in loans held-for-investment for the period indicated: Year Ended December 31, 2024 ($ in thousands) December 31, 2023 Term Loan Funding Term Loan Pay-downs and Pay-offs (1) Lines of Credit Increase (Decrease) Charge-offs Re-classification Transfer to OREO and Loans Held-For-Sale December 31, 2024 Commercial real estate: Commercial property $ 855,270 $ 198,777 $ (131,839) $ 12,223 $ — $ 6,500 $ — $ 940,931 Business property 558,772 92,619 (54,695) 5,549 (104) (6,500) (94) 595,547 Multifamily 132,500 34,300 (12,507) 1,002 (20) 38,945 — 194,220 Construction 24,843 — (2,989) — — — 21,854 Total commercial real estate 1,571,385 325,696 (199,041) 15,785 (124) 38,945 (94) 1,752,552 Commercial and industrial 342,002 48,028 (26,432) 148,634 (524) (38,945) — 472,763 Consumer: Residential mortgage 389,420 37,912 (34,200) — — — (676) 392,456 Other consumer 20,645 — (8,173) (813) (43) — — 11,616 Total consumer 410,065 37,912 (42,373) (813) (43) — (676) 404,072 Loans held-for-investment $ 2,323,452 $ 411,636 $ (267,846) $ 163,606 $ (691) $ — $ (770) $ 2,629,387 (1) Net of changes in deferred loan fees and discount on loans The following table presents the contractual maturities of loans held-for-investment and the distribution between fixed and floating interest rate loans at the date indicated: December 31, 2024 ($ in thousands) Within One Year Due After One Year to Five Years Due After Five Years to 15 Years Due After 15 Years Total Commercial real estate: Commercial property $ 208,301 $ 515,480 $ 189,031 $ 28,119 $ 940,931 Business property 55,999 296,294 153,464 89,790 595,547 Multifamily 45,862 130,514 17,844 — 194,220 Construction 21,854 — — — 21,854 Total commercial real estate 332,016 942,288 360,339 117,909 1,752,552 Commercial and industrial 324,524 88,260 59,979 — 472,763 Consumer: Residential mortgage — — — 392,456 392,456 Other consumer 2,965 8,651 — — 11,616 Total consumer 2,965 8,651 — 392,456 404,072 Loans held-for-investment $ 659,505 $ 1,039,199 $ 420,318 $ 510,365 $ 2,629,387 Loans with variable (floating) interest rates $ 510,546 $ 336,911 $ 184,175 $ 159,886 $ 1,191,518 Loans with adjustable (fixed to floating) interest rates — 404,826 234,282 342,387 981,495 Loans with predetermined (fixed) interest rates 148,959 297,462 1,861 8,092 456,374 Total $ 659,505 $ 1,039,199 $ 420,318 $ 510,365 $ 2,629,387 55 The following table reflects the allocation of the ACL on loans by loan category and the ratio of each loan category to total loans as of the dates indicated: December 31, 2024 2023 January 1, 2023 ($ in thousands) ACL on Loans Percentage of Loans to Total Loans ACL on Loans Percentage of Loans to Total Loans ACL on Loans Percentage of Loans to Total Loans Commercial real estate: Commercial property $ 12,923 35.9 % $ 12,665 36.8 % $ 6,740 37.8 % Business property 3,967 22.6 % 4,739 24.0 % 6,645 25.7 % Multifamily 2,371 7.4 % 1,441 5.7 % 1,390 6.1 % Construction 81 0.8 % 135 1.1 % 151 0.8 % Total commercial real estate 19,342 66.7 % 18,980 67.6 % 14,926 70.4 % Commercial and industrial 8,713 18.0 % 6,245 14.7 % 9,846 12.2 % Consumer: Residential mortgage 2,506 14.9 % 2,226 16.8 % 1,157 16.3 % Other consumer 67 0.4 % 82 0.9 % 80 1.1 % Total consumer 2,573 15.3 % 2,308 17.7 % 1,237 17.4 % Total $ 30,628 100.0 % $ 27,533 100.0 % $ 26,009 100.0 % ACL on loans to loans held-for-investment 1.16 % 1.19 % 1.27 % The following table reflects the allocation of the allowance for loan losses by legacy loan segments and the ratio of each legacy loan category to total loans as of the dates indicated: December 31, 2022 2021 2020 ($ in thousands) Allowance for Loan Losses Percentage of Loans to Total Loans Allowance for Loan Losses Percentage of Loans to Total Loans Allowance for Loan Losses Percentage of Loans to Total Loans Real estate loans: Commercial property $ 14,059 63.0 % $ 13,586 63.9 % $ 13,810 55.5 % Residential property 3,691 16.3 % 1,869 12.1 % 2,680 12.5 % SBA property 1,326 6.6 % 1,253 7.5 % 2,179 8.0 % Construction 151 0.8 % 89 0.5 % 225 1.0 % Total real estate loans 19,227 86.7 % 16,797 84.0 % 18,894 77.0 % Commercial and industrial loans: Commercial term 2,100 3.8 % 2,715 4.2 % 4,090 5.5 % Commercial lines of credit 3,036 7.5 % 2,071 5.8 % 2,359 6.1 % SBA commercial term 366 0.8 % 524 1.0 % 773 1.4 % SBA PPP — 0.1 % — 3.8 % — 8.6 % Total commercial and industrial loans 5,502 12.2 % 5,310 14.8 % 7,222 21.6 % Other consumer loans 213 1.1 % 274 1.2 % 394 1.4 % Total $ 24,942 100.0 % $ 22,381 100.0 % $ 26,510 100.0 % Allowance for loan losses to loans held-for-investment 1.22 % 1.29 % 1.67 % 56 The following table presents activities in ACL for the periods indicated: Year Ended December 31, ($ in thousands) 2024 2023 2022 2021 2020 ACL on loans Balance at beginning of period $ 27,533 $ 24,942 $ 22,381 $ 26,510 $ 14,380 Impact of ASC 326 adoption — 1,067 — — — Charge-offs (691) (132) (1,199) (227) (1,529) Recoveries 298 1,159 158 694 440 Provision (reversal) for credit losses on loans 3,488 497 3,602 (4,596) 13,219 Balance at end of period $ 30,628 $ 27,533 $ 24,942 $ 22,381 $ 26,510 ACL on off-balance sheet credit exposures Balance at beginning of period $ 1,277 $ 299 $ 214 $ 238 $ 301 Impact of ASC 326 adoption — 1,607 — — Provision (reversal) for credit losses on off-balance sheet credit exposure (1) (87) (629) 85 (24) (63) Balance at end of period $ 1,190 $ 1,277 $ 299 $ 214 $ 238 (1) Provision (reversal) for credit losses on off-balance sheet credit exposures for the years ended December 31, 2022, 2021, and 2020 was recorded in Other Expense on the Consolidated Income Statement.
Biggest changeThe following table presents the composition of the Company’s loans held-for-investment as of the dates indicated: December 31, 2025 2024 2023 January 1, 2023 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Amount Percentage to Total Amount Percentage to Total Commercial real estate: Commercial property $ 1,071,396 38.0 % $ 940,931 35.9 % $ 855,270 36.8 % $ 772,020 37.8 % Business property 638,063 22.6 % 595,547 22.6 % 558,772 24.0 % 526,513 25.7 % Multifamily 175,579 6.2 % 194,220 7.4 % 132,500 5.7 % 124,751 6.1 % Construction 18,561 0.7 % 21,854 0.8 % 24,843 1.1 % 17,054 0.8 % Total commercial real estate 1,903,599 67.5 % 1,752,552 66.7 % 1,571,385 67.6 % 1,440,338 70.4 % Commercial and industrial 508,662 18.0 % 472,763 18.0 % 342,002 14.7 % 249,250 12.2 % Consumer: Residential mortgage 401,337 14.3 % 392,456 14.9 % 389,420 16.8 % 333,726 16.3 % Other consumer 6,802 0.2 % 11,616 0.4 % 20,645 0.9 % 22,749 1.1 % Total consumer 408,139 14.5 % 404,072 15.3 % 410,065 17.7 % 356,475 17.4 % Loans held-for-investment $ 2,820,400 100.0 % $ 2,629,387 100.0 % $ 2,323,452 100.0 % $ 2,046,063 100.0 % ACL on loans (33,381) (30,628) (27,533) (26,009) Net loans held-for-investment $ 2,787,019 $ 2,598,759 $ 2,295,919 $ 2,020,054 The following table presents the composition of the Company’s loans held-for-investment by legacy loan segments as of the dates indicated: December 31, 2022 2021 ($ in thousands) Amount Percentage to Total Amount Percentage to Total Real estate loans: Commercial property $ 1,288,392 63.0 % $ 1,105,843 63.9 % Residential property 333,726 16.3 % 209,485 12.1 % SBA property 134,892 6.6 % 129,661 7.5 % Construction 17,054 0.8 % 8,252 0.5 % Total real estate loans 1,774,064 86.7 % 1,453,241 84.0 % Commercial and industrial loans: Commercial term 77,700 3.8 % 73,438 4.2 % Commercial lines of credit 154,142 7.5 % 100,936 5.8 % SBA commercial term 16,211 0.8 % 17,640 1.0 % SBA PPP 1,197 0.1 % 65,329 3.8 % Total commercial and industrial loans 249,250 12.2 % 257,343 14.8 % Other consumer loans 22,749 1.1 % 21,621 1.2 % Loans held-for-investment 2,046,063 100.0 % 1,732,205 100.0 % Allowance for loan losses (24,942) (22,381) Net loans held-for-investment $ 2,021,121 $ 1,709,824 55 The following table presents activities in loans held-for-investment for the period indicated: Year Ended December 31, 2025 ($ in thousands) December 31, 2024 Term Loan Funding Term Loan Pay-downs and Pay-offs (1) Lines of Credit Increase (Decrease) Charge-offs Re-classification December 31, 2025 Commercial real estate: Commercial property $ 940,931 $ 248,409 $ (117,275) $ (5,474) $ — $ 4,805 $ 1,071,396 Business property 595,547 226,585 (178,056) (901) (307) (4,805) 638,063 Multifamily 194,220 40,361 (59,002) — — — 175,579 Construction 21,854 — — (3,293) — — 18,561 Total commercial real estate 1,752,552 515,355 (354,333) (9,668) (307) — 1,903,599 Commercial and industrial 472,763 76,469 (33,045) (6,606) (919) — 508,662 Consumer: Residential mortgage 392,456 60,592 (51,711) — — — 401,337 Other consumer 11,616 — (4,839) 107 (82) — 6,802 Total consumer 404,072 60,592 (56,550) 107 (82) — 408,139 Loans held-for-investment $ 2,629,387 $ 652,416 $ (443,928) $ (16,167) $ (1,308) $ — $ 2,820,400 (1) Net of changes in deferred loan fees and discount on loans The following table presents the contractual maturities of loans held-for-investment and the distribution between fixed and floating interest rate loans at the date indicated: December 31, 2025 ($ in thousands) Within One Year Due After One Year to Five Years Due After Five Years to 15 Years Due After 15 Years Total Commercial real estate: Commercial property $ 157,883 $ 619,320 $ 269,240 $ 24,953 $ 1,071,396 Business property 56,388 337,165 150,788 93,722 638,063 Multifamily 11,101 127,623 36,855 — 175,579 Construction 18,561 — — — 18,561 Total commercial real estate 243,933 1,084,108 456,883 118,675 1,903,599 Commercial and industrial 342,232 70,062 96,368 — 508,662 Consumer: Residential mortgage — — — 401,337 401,337 Other consumer 3,095 3,707 — — 6,802 Total consumer 3,095 3,707 — 401,337 408,139 Loans held-for-investment $ 589,260 $ 1,157,877 $ 553,251 $ 520,012 $ 2,820,400 Loans with variable (floating) interest rates $ 459,490 $ 398,067 $ 186,622 $ 164,711 $ 1,208,890 Loans with adjustable (fixed to floating) interest rates — 403,694 366,629 348,031 1,118,354 Loans with predetermined (fixed) interest rates 129,770 356,116 — 7,270 493,156 Total $ 589,260 $ 1,157,877 $ 553,251 $ 520,012 $ 2,820,400 56 The following table reflects the allocation of the ACL on loans by loan category and the ratio of each loan category to total loans as of the dates indicated: December 31, 2025 2024 2023 January 1, 2023 ($ in thousands) ACL on Loans Percentage of Loans to Total Loans ACL on Loans Percentage of Loans to Total Loans ACL on Loans Percentage of Loans to Total Loans ACL on Loans Percentage of Loans to Total Loans Commercial real estate: Commercial property $ 9,348 38.0 % $ 12,923 35.9 % $ 12,665 36.8 % $ 6,740 37.8 % Business property 4,347 22.6 % 3,967 22.6 % 4,739 24.0 % 6,645 25.7 % Multifamily 1,282 6.2 % 2,371 7.4 % 1,441 5.7 % 1,390 6.1 % Construction 123 0.7 % 81 0.8 % 135 1.1 % 151 0.8 % Total commercial real estate 15,100 67.5 % 19,342 66.7 % 18,980 67.6 % 14,926 70.4 % Commercial and industrial 15,357 18.0 % 8,713 18.0 % 6,245 14.7 % 9,846 12.2 % Consumer: Residential mortgage 2,871 14.3 % 2,506 14.9 % 2,226 16.8 % 1,157 16.3 % Other consumer 53 0.2 % 67 0.4 % 82 0.9 % 80 1.1 % Total consumer 2,924 14.5 % 2,573 15.3 % 2,308 17.7 % 1,237 17.4 % Total $ 33,381 100.0 % $ 30,628 100.0 % $ 27,533 100.0 % $ 26,009 100.0 % ACL on loans to loans held-for-investment 1.18 % 1.16 % 1.19 % 1.27 % The following table reflects the allocation of the allowance for loan losses by legacy loan segments and the ratio of each legacy loan category to total loans as of the dates indicated: December 31, 2022 2021 ($ in thousands) Allowance for Loan Losses Percentage of Loans to Total Loans Allowance for Loan Losses Percentage of Loans to Total Loans Real estate loans: Commercial property $ 14,059 63.0 % $ 13,586 63.9 % Residential property 3,691 16.3 % 1,869 12.1 % SBA property 1,326 6.6 % 1,253 7.5 % Construction 151 0.8 % 89 0.5 % Total real estate loans 19,227 86.7 % 16,797 84.0 % Commercial and industrial loans: Commercial term 2,100 3.8 % 2,715 4.2 % Commercial lines of credit 3,036 7.5 % 2,071 5.8 % SBA commercial term 366 0.8 % 524 1.0 % SBA PPP — 0.1 % — 3.8 % Total commercial and industrial loans 5,502 12.2 % 5,310 14.8 % Other consumer loans 213 1.1 % 274 1.2 % Total $ 24,942 100.0 % $ 22,381 100.0 % Allowance for loan losses to loans held-for-investment 1.22% 1.29 % 57 The following table presents activities in ACL for the periods indicated: Year Ended December 31, ($ in thousands) 2025 2024 2023 2022 2021 ACL on loans Balance at beginning of period $ 30,628 $ 27,533 $ 24,942 $ 22,381 $ 26,510 Impact of ASC 326 adoption — — 1,067 — — Charge-offs (1,308) (691) (132) (1,199) (227) Recoveries 386 298 1,159 158 694 Provision (reversal) for credit losses on loans 3,675 3,488 497 3,602 (4,596) Balance at end of period $ 33,381 $ 30,628 $ 27,533 $ 24,942 $ 22,381 ACL on off-balance sheet credit exposures Balance at beginning of period $ 1,190 $ 1,277 $ 299 $ 214 $ 238 Impact of ASC 326 adoption — — 1,607 — Provision (reversal) for credit losses on off-balance sheet credit exposure (1) 353 (87) (629) 85 (24) Balance at end of period $ 1,543 $ 1,190 $ 1,277 $ 299 $ 214 (1) Provision (reversal) for credit losses on off-balance sheet credit exposures for the years ended December 31, 2022 and 2021 was recorded in Other Expense on the Consolidated Income Statement.
The adoption of ASC 326 requires the Company to measure and record current expected credit losses for financial assets within the scope of ASC 326, which the Company currently consist substantially of loans, off-balance sheet credit exposures and securities available-for-sale.
The adoption of ASC 326 requires the Company to measure and record current expected credit losses for financial assets within the scope of ASC 326, which for the Company currently consist substantially of loans, off-balance sheet credit exposures and securities available-for-sale.
For the years ended December 31, 2024 and 2023, yield on total other interest-earning assets was 5.50% and 5.27%, respectively. Interest expense on deposits increased primarily due to a 23.1% increase in average balance of interest-bearing deposits and a 74 basis point increase in average cost of interest-bearing deposits.
For the years ended December 31, 2024 and 2023, yield on total other interest-earning assets was 5.50% and 5.27%, respectively. 48 Interest expense on deposits increased primarily due to a 23.1% increase in average balance of interest-bearing deposits and a 74 basis point increase in average cost of interest-bearing deposits.
For the years ended December 31, 2024 and 2023, average yield on total investment securities was 3.69% and 3.33%, respectively. 46 Interest income on other interest-earning assets increased primarily due to a 23 basis point increase in average yield and a 2.2% increase in average balance.
For the years ended December 31, 2024 and 2023, average yield on total investment securities was 3.69% and 3.33%, respectively. Interest income on other interest-earning assets increased primarily due to a 23 basis point increase in average yield and a 2.2% increase in average balance.
On January 16, 2025, the Company entered into an ECIP Securities Purchase Option Agreement (the “Option Agreement”) with the U.S. Treasury, which grants the Company the option to repurchase the Series C Preferred Stock during the first 15 years following the Company’s issuance of the Series C Preferred Stock.
On January 16, 2025, the Company entered into an ECIP Securities Purchase Option Agreement (the “Option Agreement”) with the U.S. Treasury, which grants the Company the conditional option to repurchase the Series C Preferred Stock during the first 15 years following the Company’s issuance of the Series C Preferred Stock.
The purchase option may not be exercised during the first 10 years following the Company’s sale of the Series C Preferred Stock (“the ECIP Period”) unless and until the Company meets at least one of the following three conditions (the “Threshold Conditions”): (1) an average of at least 60% of the Company’s loan originations qualify as “Deep Impact Lending” over any 16 consecutive quarters, (2) an average of at least 85% of the Company’s “total originations qualify as “Qualified Lending” over any 24 quarters or (3) the Series C Preferred Stock has a dividend rate of no more than 0.5% at each of six consecutive “Reset Dates,” in each case as defined in Option Agreement and the terms of the Series C Preferred.
The purchase option may not be exercised during the first 10 years following the Company’s sale of the Series C Preferred Stock (the “ECIP Period”) unless and until the Company meets at least one of following three conditions (the “Threshold Conditions”): (1) an average of at least 60% of the Company’s loan originations qualify as “Deep Impact Lending” over any 16 consecutive quarters, (2) an average of at least 85% of the Company’s “total originations qualify as “Qualified Lending” over any 24 quarters or (3) the Series C Preferred Stock has a dividend rate of no more than 0.5% at each of six consecutive “Reset Dates,” in each case as defined in Option Agreement and the terms of the Series C Preferred.
Management believes that these limitations will not impact the Company’s ability to meet its ongoing short- and long-term cash obligations. 64 Off-Balance Sheet Arrangements The Company has limited off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on financial condition, results of operations, liquidity, capital expenditures or capital resources.
Management believes that these limitations will not impact the Company’s ability to meet its ongoing short- and long-term cash obligations. 65 Off-Balance Sheet Arrangements The Company has limited off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on financial condition, results of operations, liquidity, capital expenditures or capital resources.
Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of December 31, 2024 and 2023.
Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of December 31, 2025 and 2024.
Municipal and corporate bonds had an investment grade rating upon purchase. The issuers of these securities have not established any cause for default on these securities and various rating agencies have reaffirmed their long-term investment grade status as of December 31, 2024 and 2023. These securities have fluctuated in value since their purchase dates as market interest rates fluctuated.
Municipal and corporate bonds had an investment grade rating upon purchase. The issuers of these securities have not established any cause for default on these securities and various rating agencies have reaffirmed their long-term investment grade status as of December 31, 2025 and 2024. These securities have fluctuated in value since their purchase dates as market interest rates fluctuated.
For the loans individually evaluated, the Company considers accrued interest receivables as a part of the amortized cost and measures an ACL. 37 When accrued interest receivable is deemed to be uncollectable, the Company promptly reverses such balances through current period interest income in the period they are deemed uncollectable.
For the loans individually evaluated, the Company considers accrued interest receivables as a part of the amortized cost and measures an ACL. 39 When accrued interest receivable is deemed to be uncollectable, the Company promptly reverses such balances through current period interest income in the period they are deemed uncollectable.
Management expects to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. The Company has in place various borrowing mechanisms for both short-term and long-term liquidity needs. 65
Management expects to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. The Company has in place various borrowing mechanisms for both short-term and long-term liquidity needs. 66
Thereafter, the dividend rate will be adjusted based on the lending growth criteria listed in the terms of the ECIP investment with the annual dividend rate up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10.
Thereafter, the dividend rate is adjusted based on the qualified lending growth criteria listed in the terms of the ECIP investment with the annual dividend rate up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10.
(5) Cost of funds is calculated by dividing total interest expense by the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. 45 The following table presents the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
(5) Cost of funds is calculated by dividing total interest expense by the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. 46 The following table presents the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
The loss estimation process includes assumptions for utilization at default. These assumptions are based on the Company’s own historical internal loan data. As of December 31, 2024 and 2023, the Company maintained an ACL on off-balance sheet credit exposures of $1.2 million and $1.3 million in Accrued Interest Payable and Other Liabilities in the Consolidated Balance Sheets, respectively.
The loss estimation process includes assumptions for utilization at default. These assumptions are based on the Company’s own historical internal loan data. As of December 31, 2025 and 2024, the Company maintained an ACL on off-balance sheet credit exposures of $1.5 million and $1.2 million in Accrued Interest Payable and Other Liabilities in the Consolidated Balance Sheets, respectively.
Beyond the one-year forecast time horizon, the Company’s ACL model reverts to historical long-term average loss rates over a one-year period. Within the various economic scenarios considered as of December 31, 2024, the quantitative estimate of the ACL would increase by approximately $19.0 million under sole consideration of the more adverse downside scenario.
Beyond the one-year forecast time horizon, the Company’s ACL model reverts to historical long-term average loss rates over a one-year period. Within the various economic scenarios considered as of December 31, 2025, the quantitative estimate of the ACL would increase by approximately $21.0 million under sole consideration of the more adverse downside scenario.
Provision (reversal) for credit losses on off-balance sheet credit exposures of $85 thousand, $(24) thousand, and $(63) thousand, respectively, for the years ended December 31, 2022, 2021, and 2020 were recorded in Other Expense on the Consolidated Income Statement. (2) Shareholders' equity divided by common shares outstanding. (3) Dividends declared per common share divided by basic earnings per common share.
Provision (reversal) for credit losses on off-balance sheet credit exposures of $85 thousand and $(24) thousand, respectively, for the years ended December 31, 2022 and 2021 is recorded in Other Expense on the Consolidated Income Statement. (2) Shareholders' equity divided by common shares outstanding. (3) Dividends declared per common share divided by basic earnings per common share.
The Bank’s construction and land development loans remain a small portion of the loan portfolio and as a percentage of total capital (as defined by the federal bank regulators) were 6.3% and 7.4%, respectively, at December 31, 2024 and 2023.
The Bank’s construction and land development loans remain a small portion of the loan portfolio and as a percentage of total capital (as defined by the federal bank regulators) were 7.7% and 6.3%, respectively, at December 31, 2025 and 2024.
The Company therefore determined that the investment securities with unrealized losses did not warrant an ACL as of December 31, 2024 and 2023.
The Company therefore determined that the investment securities with unrealized losses did not warrant an ACL as of December 31, 2025 and 2024.
Additional income of approximately $547 thousand would have been recorded during the year ended December 31, 2024, had these loans been paid in accordance with their original terms throughout the periods indicated. CRE Concentration The Bank has policies and procedures in place to monitor compliance with the CRE Concentration Guidance.
Additional income of approximately $624 thousand would have been recorded during the year ended December 31, 2025, had these loans been paid in accordance with their original terms throughout the periods indicated. CRE Concentration The Bank has policies and procedures in place to monitor compliance with the CRE Concentration Guidance.
See further discussion in “Allowance for Credit Losses.” 48 Noninterest Income Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents the components of noninterest income for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Service charges and fees on deposits $ 1,545 $ 1,475 $ 70 4.7 % Loan servicing income 3,365 3,330 35 1.1 % Bank-owned life insurance income 949 753 196 26.0 % Gain on sale of loans 3,752 3,570 182 5.1 % Other income 1,482 1,555 (73) (4.7) % Total noninterest income $ 11,093 $ 10,683 $ 410 3.8 % Service charges and fees on deposits increased primarily due to an increase in fee-based transactions.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents the components of noninterest income for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Service charges and fees on deposits $ 1,545 $ 1,475 $ 70 4.7 % Loan servicing income 3,365 3,330 35 1.1 % Bank-owned life insurance income 949 753 196 26.0 % Gain on sale of loans 3,752 3,570 182 5.1 % Other income 1,482 1,555 (73) (4.7) % Total noninterest income $ 11,093 $ 10,683 $ 410 3.8 % Service charges and fees on deposits increased primarily due to an increase in fee-based transactions.
Loan servicing income represents fees received on loans that the Company services, net of amortization of servicing assets. The increase was primarily due to an increase in servicing income received and a decrease in amortization of servicing assets from lower prepayments of loans being serviced. Bank-owned life insurance income represents the increase in cash surrender value of the insurance policy.
Loan servicing income represents fees received on loans that the Company services, net of amortization of servicing assets. The decrease was primarily due to an increase in amortization of servicing assets from higher prepayments of loans being serviced. Bank-owned life insurance income represents the increase in cash surrender value of the insurance policy.
As of December 31, 2024 and 2023, the Company recorded no ACL on securities available-for-sale. 52 The following table presents the contractual maturity schedule for securities, at amortized cost, and their weighted-average yields as of the date indicated.
As of December 31, 2025 and 2024, the Company recorded no ACL on securities available-for-sale. 53 The following table presents the contractual maturity schedule for securities, at amortized cost, and their weighted-average yields as of the date indicated.
As of December 31, 2024, using regulatory definitions in the CRE Concentration Guidance, CRE loans represented 297.0% of total risk-based capital, as compared to 280.7%, 253.9%, 269.8% and 256.1% as of December 31, 2023, 2022, 2021 and 2020, respectively.
As of December 31, 2025, using regulatory definitions in the CRE Concentration Guidance, CRE loans represented 307.7% of total risk-based capital, as compared to 297.0%, 280.7%, 253.9% and 269.8% as of December 31, 2024, 2023, 2022 and 2021, respectively.
Net amortization of deferred loan fees (cost) of $1.2 million, $1.1 million and $2.2 million, respectively, and net accretion of discount on loans of $2.8 million, $2.2 million and $3.6 million, respectively, are included in the interest income for the years ended December 31, 2024, 2023 and 2022, respectively.
Net amortization of deferred loan fees (cost) of $1.4 million, $1.2 million and $1.1 million, respectively, and net accretion of discount on loans of $2.8 million, $2.8 million and $2.2 million, respectively, are included in the interest income for the years ended December 31, 2025, 2024 and 2023, respectively.
The increase in average yield was primarily due to the rising market rates and an increase in dividend on FHLB stock. The increase in average balance was primarily due to an increase in average balance of deposits, partially offset by an increase in loans.
The decrease in average yield was primarily due to the lower market rates, partially offset by an increase in dividend on FHLB stock. The increase in average balance was primarily due to an increase in average balance of deposits, partially offset by an increase in loans.
In addition, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guarantee during the second quarter of 2024.
In addition, during the year ended December 31, 2024, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was determined by the SBA to be ineligible for the guarantee.
The increase in ACL for the year ended December 31, 2024 was primarily due to increases in loans held-for-investment and reserve related to qualitative adjustment factors, partially offset by decreases in quantitatively measured loss reserves and reserves on individually evaluated loans.
The increase in ACL for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors.
As of December 31, 2024 and 2023, 95.3% and 94.7%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs.
As of December 31, 2025 and 2024, 95.5% and 95.3%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs.
Income Tax Expense Income tax expense was $10.5 million, $12.6 million and $14.4 million, respectively, and the effective tax rate was 28.9%, 29.0% and 29.2%, respectively, for the years ended December 31, 2024, 2023 and 2022. 51 Financial Condition Investment Securities The Company’s investment strategy aims to maximize earnings while maintaining liquidity in securities with minimal credit risk.
Income Tax Expense Income tax expense was $15.0 million, $10.5 million and $12.6 million, respectively, and the effective tax rate was 28.6%, 28.9% and 29.0%, respectively, for the years ended December 31, 2025, 2024 and 2023. 52 Financial Condition Investment Securities The Company’s investment strategy aims to maximize earnings while maintaining liquidity in securities with minimal credit risk.
Interest and fees on loans increased primarily due to a 14.2% increase in average balance and a 128 basis point increase in average yield. The increase in average balance was primarily due to an increase in commercial real estate, commercial and industrial, and residential mortgage loans, partially offset by a decrease in other consumer loans.
Interest and fees on loans increased primarily due to a 12.8% increase in average balance, partially offset by an 18 basis point decrease in average yield. The increase in average balance was primarily due to an increase in commercial real estate, commercial and industrial, and residential mortgage loans, partially offset by a decrease in other consumer loans.
Regulatory Capital Requirements The following table presents a summary of the minimum capital requirements applicable to the Company and the Bank in order to be considered “well-capitalized” from a regulatory perspective as of the dates indicated: PCB Bancorp PCB Bank Minimum Regulatory Requirements Well Capitalized Requirements (Bank) December 31, 2024 Common tier 1 capital (to risk-weighted assets) 11.44 % 13.72 % 4.5 % 6.5 % Total capital (to risk-weighted assets) 15.24 % 14.92 % 8.0 % 10.0 % Tier 1 capital (to risk-weighted assets) 14.04 % 13.72 % 6.0 % 8.0 % Tier 1 capital (to average assets) 12.45 % 12.16 % 4.0 % 5.0 % December 31, 2023 Common tier 1 capital (to risk-weighted assets) 12.23 % 14.85 % 4.5 % 6.5 % Total capital (to risk-weighted assets) 16.39 % 16.07 % 8.0 % 10.0 % Tier 1 capital (to risk-weighted assets) 15.16 % 14.85 % 6.0 % 8.0 % Tier 1 capital (to average assets) 13.43 % 13.16 % 4.0 % 5.0 % The Company and the Bank’s capital conservation buffer was 6.94% and 6.92%, respectively, as of December 31, 2024, and 7.73% and 8.07%, respectively, as of December 31, 2023.
Regulatory Capital Requirements The following table presents a summary of the minimum capital requirements applicable to the Company and the Bank in order to be considered “well-capitalized” from a regulatory perspective as of the dates indicated: PCB Bancorp PCB Bank Minimum Regulatory Requirements Well Capitalized Requirements (Bank) December 31, 2025 Common tier 1 capital (to risk-weighted assets) 11.46 % 13.49 % 4.5 % 6.5 % Total capital (to risk-weighted assets) 15.13 % 14.72 % 8.0 % 10.0 % Tier 1 capital (to risk-weighted assets) 13.89 % 13.49 % 6.0 % 8.0 % Tier 1 capital (to average assets) 11.89 % 11.55 % 4.0 % 5.0 % December 31, 2024 Common tier 1 capital (to risk-weighted assets) 11.44 % 13.72 % 4.5 % 6.5 % Total capital (to risk-weighted assets) 15.24 % 14.92 % 8.0 % 10.0 % Tier 1 capital (to risk-weighted assets) 14.04 % 13.72 % 6.0 % 8.0 % Tier 1 capital (to average assets) 12.45 % 12.16 % 4.0 % 5.0 % The Company and the Bank’s capital conservation buffer was 6.96% and 6.72%, respectively, as of December 31, 2025, and 6.94% and 6.92%, respectively, as of December 31, 2024.
Year Ended December 31, ($ in thousands) 2024 2023 2022 2021 2020 Average total shareholders' equity $ 355,620 $ 340,509 $ 306,440 $ 242,766 $ 228,553 Less: average preferred stock 69,141 69,141 42,053 — — Average tangible common equity $ 286,479 $ 271,368 $ 264,387 $ 242,766 $ 228,553 Net income $ 25,810 $ 30,705 $ 34,987 $ 40,103 $ 16,175 Return on average shareholders' equity 7.26 % 9.02 % 11.42 % 16.52 % 7.08 % Net income available to common shareholders $ 24,976 $ 30,705 $ 34,987 $ 40,103 $ 16,175 Return on average tangible common equity 8.72 % 11.31 % 13.23 % 16.52 % 7.08 % December 31, ($ in thousands, except per share data) 2024 2023 2022 2021 2020 Total shareholders' equity $ 363,814 $ 348,872 $ 335,442 $ 256,286 $ 233,788 Less: preferred stock 69,141 69,141 69,141 — — Tangible common equity $ 294,673 $ 279,731 $ 266,301 $ 256,286 $ 233,788 Outstanding common shares 14,380,651 14,260,440 14,625,474 14,865,825 15,385,878 Book value per common share $ 25.30 $ 24.46 $ 22.94 $ 17.24 $ 15.19 Tangible common equity per common share $ 20.49 $ 19.62 $ 18.21 $ 17.24 $ 15.19 Total assets $ 3,063,971 $ 2,789,506 $ 2,420,036 $ 2,149,735 $ 1,922,853 Total shareholders' equity to total assets 11.87 % 12.51 % 13.86 % 11.92 % 12.16 % Tangible common equity to total assets 9.62 % 10.03 % 11.00 % 11.92 % 12.16 % 41 Five-Year Summary of Selected Financial Data The following table presents certain selected financial data as of the dates or for the periods indicated: As of or For the Year Ended December 31, ($ in thousands, except per share data) 2024 2023 2022 2021 2020 Selected balance sheet data: Cash and cash equivalents $ 198,792 $ 242,342 $ 147,031 $ 203,285 $ 194,098 Securities available-for-sale 146,349 143,323 141,863 123,198 120,527 Loans held-for-sale 6,292 5,155 22,811 37,026 1,979 Loans held-for-investment 2,629,387 2,323,452 2,046,063 1,732,205 1,583,578 ACL on loans (1) (30,628) (27,533) (24,942) (22,381) (26,510) Total assets 3,063,971 2,789,506 2,420,036 2,149,735 1,922,853 Total deposits 2,615,791 2,351,612 2,045,983 1,867,134 1,594,851 Shareholders’ equity 363,814 348,872 335,442 256,286 233,788 Selected income statement data: Interest income $ 180,817 $ 151,177 $ 101,751 $ 81,472 $ 79,761 Interest expense 92,200 62,673 12,119 4,335 13,572 Net interest income 88,617 88,504 89,632 77,137 66,189 Provision (reversal) for credit losses (1) 3,401 (132) 3,602 (4,596) 13,219 Noninterest income 11,093 10,683 14,499 18,434 11,740 Noninterest expense 60,023 56,057 51,126 43,208 41,699 Income before income taxes 36,286 43,262 49,403 56,959 23,011 Income tax expense 10,476 12,557 14,416 16,856 6,836 Net income 25,810 30,705 34,987 40,103 16,175 Preferred stock dividends 834 — — — — Net income available to common shareholders 24,976 30,705 34,987 40,103 16,175 Per share data: Earnings per common share, basic $ 1.75 $ 2.14 $ 2.35 $ 2.66 $ 1.05 Earnings per common share, diluted 1.74 2.12 2.31 2.62 1.04 Book value per common share (2) 25.30 24.46 22.94 17.24 15.19 Tangible common equity per common share (8) 20.49 19.62 18.21 17.24 15.19 Cash dividends declared per common share 0.72 0.69 0.60 0.44 0.40 Outstanding share data: Number of common shares outstanding 14,380,651 14,260,440 14,625,474 14,865,825 15,385,878 Weighted-average common shares outstanding, basic 14,242,057 14,301,691 14,822,018 15,017,637 15,384,231 Weighted-average common shares outstanding, diluted 14,342,361 14,417,938 15,065,175 15,253,820 15,448,892 Selected performance ratios: Return on average assets 0.90 % 1.20 % 1.54 % 1.96 % 0.84 % Return on average shareholders’ equity 7.26 % 9.02 % 11.42 % 16.52 % 7.08 % Return on average tangible common equity (8) 8.72 % 11.31 % 13.23 % 16.52 % 7.08 % Dividend payout ratio (3) 41.14 % 32.24 % 25.53 % 16.54 % 38.10 % Efficiency ratio (4) 60.20 % 56.52 % 49.10 % 45.21 % 53.51 % Yield on average interest-earning assets 6.47 % 6.10 % 4.63 % 4.05 % 4.25 % Cost of average interest-bearing liabilities 4.79 % 4.05 % 1.08 % 0.41 % 1.15 % Net interest spread 1.68 % 2.05 % 3.55 % 3.64 % 3.10 % Net interest margin (5) 3.17 % 3.57 % 4.08 % 3.83 % 3.53 % Total loans to total deposits ratio (6) 100.76 % 99.02 % 101.12 % 94.76 % 99.42 % 42 As of or For the Year Ended December 31, ($ in thousands, except per share data) 2024 2023 2022 2021 2020 Asset quality: Loans 30 to 89 days past due and still accruing $ 4,902 $ 1,428 $ 134 $ 554 $ 338 Loans past due 90 days or more and still accruing — — — — — Nonaccrual loans held-for-investment 4,693 3,916 3,360 994 3,163 NPLs held-for-investment 4,693 3,916 3,360 994 3,163 NPLs held-for-sale — — 4,000 — — Total NPLs 4,693 3,916 7,360 994 3,163 NPAs (7) 4,693 6,474 7,360 994 4,564 Net charge-offs (recoveries) 393 (1,027) 1,041 (467) 1,089 Loans 30 to 89 days past due and still accruing to loans held-for-investment 0.19 % 0.06 % 0.01 % 0.03 % 0.02 % Nonaccrual loans held-for-investment to loans held-for-investment 0.18 % 0.17 % 0.16 % 0.06 % 0.20 % Nonaccrual loans held-for-investment to ACL on loans (1) 15.32 % 14.22 % 13.47 % 4.44 % 11.93 % NPLs held-for-investment to loans held-for-investment 0.18 % 0.17 % 0.16 % 0.06 % 0.20 % NPLs held-for-investment to ACL on loans (1) 15.32 % 14.22 % 13.47 % 4.44 % 11.93 % NPAs to total assets 0.15 % 0.23 % 0.30 % 0.05 % 0.24 % ACL on loans (1) to loans held-for-investment 1.16 % 1.19 % 1.22 % 1.29 % 1.67 % ACL on loans (1) to nonaccrual loans held-for-investment 652.63 % 703.09 % 742.32 % 2,251.61 % 838.13 % Net charge-offs (recoveries) to average loans held-for-investment 0.02 % (0.05) % 0.06 % (0.03) % 0.07 % Capital ratios: Shareholders’ equity to total assets 11.87 % 12.51 % 13.86 % 11.92 % 12.16 % Tangible common equity to total assets (8) 9.62 % 10.03 % 11.00 % 11.92 % 12.16 % Average equity to average assets 12.36 % 13.35 % 13.49 % 11.86 % 11.94 % PCB Bancorp Common tier 1 capital (to risk-weighted assets) 11.44 % 12.23 % 13.29 % 14.79 % 15.97 % Total capital (to risk-weighted assets) 15.24 % 16.39 % 17.83 % 16.04 % 17.22 % Tier 1 capital (to risk-weighted assets) 14.04 % 15.16 % 16.62 % 14.79 % 15.97 % Tier 1 capital (to average assets) 12.45 % 13.43 % 14.33 % 12.11 % 11.94 % PCB Bank Common tier 1 capital (to risk-weighted assets) 13.72 % 14.85 % 16.30 % 14.48 % 15.70 % Total capital (to risk-weighted assets) 14.92 % 16.07 % 17.52 % 15.73 % 16.95 % Tier 1 capital (to risk-weighted assets) 13.72 % 14.85 % 16.30 % 14.48 % 15.70 % Tier 1 capital (to average assets) 12.16 % 13.16 % 14.05 % 11.85 % 11.74 % (1) ACL and provision (reversal) for credit losses for the year ended December 31, 2024 and 2023 is presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310.
Year Ended December 31, ($ in thousands) 2025 2024 2023 2022 2021 Average total shareholders' equity $ 376,990 $ 355,620 $ 340,509 $ 306,440 $ 242,766 Less: average preferred stock 69,141 69,141 69,141 42,053 — Average tangible common equity $ 307,849 $ 286,479 $ 271,368 $ 264,387 $ 242,766 Net income $ 37,453 $ 25,810 $ 30,705 $ 34,987 $ 40,103 Return on average shareholders' equity 9.93 % 7.26 % 9.02 % 11.42 % 16.52 % Net income available to common shareholders $ 37,153 $ 24,976 $ 30,705 $ 34,987 $ 40,103 Return on average tangible common equity 12.07 % 8.72 % 11.31 % 13.23 % 16.52 % December 31, ($ in thousands, except per share data) 2025 2024 2023 2022 2021 Total shareholders' equity $ 390,026 $ 363,814 $ 348,872 $ 335,442 $ 256,286 Less: preferred stock 69,141 69,141 69,141 69,141 — Tangible common equity $ 320,885 $ 294,673 $ 279,731 $ 266,301 $ 256,286 Outstanding common shares 14,230,428 14,380,651 14,260,440 14,625,474 14,865,825 Book value per common share $ 27.41 $ 25.30 $ 24.46 $ 22.94 $ 17.24 Tangible common equity per common share $ 22.55 $ 20.49 $ 19.62 $ 18.21 $ 17.24 Total assets $ 3,281,771 $ 3,063,971 $ 2,789,506 $ 2,420,036 $ 2,149,735 Total shareholders' equity to total assets 11.88 % 11.87 % 12.51 % 13.86 % 11.92 % Tangible common equity to total assets 9.78 % 9.62 % 10.03 % 11.00 % 11.92 % 42 Five-Year Summary of Selected Financial Data The following table presents certain selected financial data as of the dates or for the periods indicated: As of or For the Year Ended December 31, ($ in thousands, except per share data) 2025 2024 2023 2022 2021 Selected balance sheet data: Cash and cash equivalents $ 207,142 $ 198,792 $ 242,342 $ 147,031 $ 203,285 Securities available-for-sale 160,009 146,349 143,323 141,863 123,198 Loans held-for-sale 12,077 6,292 5,155 22,811 37,026 Loans held-for-investment 2,820,400 2,629,387 2,323,452 2,046,063 1,732,205 ACL on loans (1) (33,381) (30,628) (27,533) (24,942) (22,381) Total assets 3,281,771 3,063,971 2,789,506 2,420,036 2,149,735 Total deposits 2,795,412 2,615,791 2,351,612 2,045,983 1,867,134 Shareholders’ equity 390,026 363,814 348,872 335,442 256,286 Selected income statement data: Interest income $ 197,536 $ 180,817 $ 151,177 $ 101,751 $ 81,472 Interest expense 93,658 92,200 62,673 12,119 4,335 Net interest income 103,878 88,617 88,504 89,632 77,137 Provision (reversal) for credit losses (1) 4,028 3,401 (132) 3,602 (4,596) Noninterest income 11,836 11,093 10,683 14,499 18,434 Noninterest expense 59,198 60,023 56,057 51,126 43,208 Income before income taxes 52,488 36,286 43,262 49,403 56,959 Income tax expense 15,035 10,476 12,557 14,416 16,856 Net income 37,453 25,810 30,705 34,987 40,103 Preferred stock dividends 300 834 — — — Net income available to common shareholders 37,153 24,976 30,705 34,987 40,103 Per share data: Earnings per common share, basic $ 2.59 $ 1.75 $ 2.14 $ 2.35 $ 2.66 Earnings per common share, diluted 2.58 1.74 2.12 2.31 2.62 Book value per common share (2) 27.41 25.30 24.46 22.94 17.24 Tangible common equity per common share (8) 22.55 20.49 19.62 18.21 17.24 Cash dividends declared per common share 0.80 0.72 0.69 0.60 0.44 Outstanding share data: Number of common shares outstanding 14,230,428 14,380,651 14,260,440 14,625,474 14,865,825 Weighted-average common shares outstanding, basic 14,204,468 14,242,057 14,301,691 14,822,018 15,017,637 Weighted-average common shares outstanding, diluted 14,279,130 14,342,361 14,417,938 15,065,175 15,253,820 Selected performance ratios: Return on average assets 1.15 % 0.90 % 1.20 % 1.54 % 1.96 % Return on average shareholders’ equity 9.93 % 7.26 % 9.02 % 11.42 % 16.52 % Return on average tangible common equity (8) 12.07 % 8.72 % 11.31 % 13.23 % 16.52 % Dividend payout ratio (3) 30.89 % 41.14 % 32.24 % 25.53 % 16.54 % Efficiency ratio (4) 51.16 % 60.20 % 56.52 % 49.10 % 45.21 % Yield on average interest-earning assets 6.26 % 6.47 % 6.10 % 4.63 % 4.05 % Cost of average interest-bearing liabilities 4.12 % 4.79 % 4.05 % 1.08 % 0.41 % Net interest spread 2.14 % 1.68 % 2.05 % 3.55 % 3.64 % Net interest margin (5) 3.29 % 3.17 % 3.57 % 4.08 % 3.83 % Total loans to total deposits ratio (6) 101.33 % 100.76 % 99.02 % 101.12 % 94.76 % 43 As of or For the Year Ended December 31, ($ in thousands, except per share data) 2025 2024 2023 2022 2021 Asset quality: Loans 30 to 89 days past due and still accruing $ 955 $ 4,902 0 $ 1,428 $ 134 $ 554 Loans past due 90 days or more and still accruing — — — — — Nonaccrual loans held-for-investment 7,910 4,693 3,916 3,360 994 NPLs held-for-investment 7,910 4,693 3,916 3,360 994 NPLs held-for-sale — — — 4,000 — Total NPLs 7,910 4,693 3,916 7,360 994 NPAs (7) 7,910 4,693 3,916 7,360 994 Net charge-offs (recoveries) 922 393 (1,027) 1,041 (467) Loans 30 to 89 days past due and still accruing to loans held-for-investment 0.03 % 0.19 % 0.06 % 0.01 % 0.03 % Nonaccrual loans held-for-investment to loans held-for-investment 0.28 % 0.18 % 0.17 % 0.16 % 0.06 % Nonaccrual loans held-for-investment to ACL on loans (1) 23.70 % 15.32 % 14.22 % 13.47 % 4.44 % NPLs held-for-investment to loans held-for-investment 0.28 % 0.18 % 0.17 % 0.16 % 0.06 % NPLs held-for-investment to ACL on loans (1) 23.70 % 15.32 % 14.22 % 13.47 % 4.44 % NPAs to total assets 0.24 % 0.15 % 0.23 % 0.30 % 0.05 % ACL on loans (1) to loans held-for-investment 1.18 % 1.16 % 1.19 % 1.22 % 1.29 % ACL on loans (1) to nonaccrual loans held-for-investment 422.01 % 652.63 % 703.09 % 742.32 % 2,251.61 % ACL on loans (1) to NPLs held-for-investment 422.01 % 652.63 % 703.09 % 742.32 % 2,251.61 % Net charge-offs (recoveries) to average loans held-for-investment 0.03 % 0.02 % (0.05) % 0.06 % (0.03) % Capital ratios: Shareholders’ equity to total assets 11.88 % 11.87 % 12.51 % 13.86 % 11.92 % Tangible common equity to total assets (8) 9.78 % 9.62 % 10.03 % 11.00 % 11.92 % Average equity to average assets 11.61 % 12.36 % 13.35 % 13.49 % 11.86 % PCB Bancorp Common tier 1 capital (to risk-weighted assets) 11.46 % 11.44 % 12.23 % 13.29 % 14.79 % Total capital (to risk-weighted assets) 15.13 % 15.24 % 16.39 % 17.83 % 16.04 % Tier 1 capital (to risk-weighted assets) 13.89 % 14.04 % 15.16 % 16.62 % 14.79 % Tier 1 capital (to average assets) 11.89 % 12.45 % 13.43 % 14.33 % 12.11 % PCB Bank Common tier 1 capital (to risk-weighted assets) 13.49 % 13.72 % 14.85 % 16.30 % 14.48 % Total capital (to risk-weighted assets) 14.72 % 14.92 % 16.07 % 17.52 % 15.73 % Tier 1 capital (to risk-weighted assets) 13.49 % 13.72 % 14.85 % 16.30 % 14.48 % Tier 1 capital (to average assets) 11.55 % 12.16 % 13.16 % 14.05 % 11.85 % (1) ACL and provision (reversal) for credit losses for the years ended December 31, 2025, 2024 and 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310.
Management believes that the projections used are reasonable and align with the Company’s expectation of the economic environment over the next 4 quarters. 57 The following table presents net charge-offs as a percentage to the average loan held for investment balances in each of the loan categories for the periods indicated: For the Year Ended December 31, 2024 2023 ($ in thousands) Average Balance Net Charge-offs (Recoveries) Percentage Average Balance Net Charge-offs (Recoveries) Percentage Commercial real estate: Commercial property $ 862,697 $ — — % $ 794,642 $ — — % Business property 584,664 100 0.02 % 537,044 (5) -0.01 % Multifamily 156,965 20 0.01 % 127,338 — — % Construction 26,136 — — % 18,565 — — % Total commercial real estate 1,630,462 120 0.01 % 1,477,589 (5) -0.01 % Commercial and industrial 403,172 398 0.11 % 263,447 (1,062) -0.40 % Consumer: Residential mortgage 386,512 — — % 358,303 — — % Other consumer 16,923 (125) -0.92 % 21,602 40 0.19 % Total consumer 403,435 (125) -0.04 % 379,905 40 0.01 % Total loans held-for-investment $ 2,437,069 $ 393 0.02 % $ 2,120,941 $ (1,027) -0.05 % The following table presents net charge-offs as a percentage to the average loan held for investment balances in each of the legacy loan categories for the periods indicated: For the Year Ended December 31, 2022 2021 2020 ($ in thousands) Average Balance Net Charge-offs (Recoveries) Percentage Average Balance Net Charge-offs (Recoveries) Percentage Average Balance Net Charge-offs (Recoveries) Percentage Real estate loans: Commercial property $ 1,201,405 $ — — % $ 983,129 $ — — % $ 826,288 $ — — % Residential property 261,576 — — % 197,741 — — % 221,296 — — % SBA property 115,488 — — % 125,051 (39) (0.03) % 124,996 117 0.09 % Construction 12,202 — — % 12,715 — — % 20,285 — — % Total real estate loans 1,590,671 — — % 1,318,636 (39) (0.01) % 1,192,865 117 0.01 % Commercial and industrial loans: Commercial term 74,934 (8) (0.01) % 77,383 (200) (0.26) % 97,247 (96) (0.10) % Commercial lines of credit 111,864 1,063 0.95 % 92,874 (146) (0.16) % 100,154 709 0.71 % SBA commercial term 16,262 (21) (0.13) % 19,390 (104) (0.54) % 23,868 255 1.07 % SBA PPP 13,732 — — % 150,043 — — % 92,818 — — % Total commercial and industrial loans 216,792 1,034 0.48 % 339,690 (450) (0.13) % 314,087 868 0.28 % Other consumer loans 21,991 7 0.03 % 21,101 22 0.10 % 22,033 104 0.47 % Total loans held-for-investment $ 1,829,454 $ 1,041 0.06 % $ 1,679,427 $ (467) (0.03) % $ 1,528,985 $ 1,089 0.07 % 58 Loans 30 to 89 Days Past Due and Still Accruing The following table presents a summary of loans 30 to 89 days past due and still accruing as of the dates indicated: December 31, ($ in thousands) 2024 2023 2022 2021 2020 Commercial real estate: Commercial property $ 433 $ — N/A N/A N/A Business property 333 560 N/A N/A N/A Total commercial real estate 766 560 $ — $ — $ — Commercial and industrial — 217 — — — Consumer: Residential mortgage 3,982 604 — 461 182 Other consumer 154 47 134 93 156 Total consumer 4,136 651 134 554 338 Total $ 4,902 $ 1,428 $ 134 $ 554 $ 338 Nonperforming Loans and Nonperforming Assets The following table presents a summary of total NPLs and NPAs as of the dates indicated: December 31, ($ in thousands) 2024 2023 2022 2021 2020 Nonaccrual loans held-for-investment: Commercial real estate: Commercial property (1) N/A N/A $ 2,400 $ — $ 524 SBA property (1) N/A N/A 585 746 885 Commercial property $ 1,851 $ 958 N/A N/A N/A Business property 2,336 2,865 N/A N/A N/A Total commercial real estate 4,187 3,823 2,985 746 1,409 Commercial and industrial 79 68 — 213 1,499 Consumer: Residential property 403 — 372 — 189 Other consumer 24 25 3 35 66 Total consumer 427 25 375 35 255 Total nonaccrual loans held-for-investment 4,693 3,916 3,360 994 3,163 Loans past due 90 days or more still on accrual — — — — — NPLs held-for-investment 4,693 3,916 3,360 994 3,163 NPLs held-for-sale — — 4,000 — — Total NPLs 4,693 3,916 7,360 994 3,163 Other real estate owned — 2,558 — — 1,401 NPAs $ 4,693 $ 6,474 $ 7,360 $ 994 $ 4,564 Nonaccrual loans held-for-investment to loans held-for-investment 0.18 % 0.17 % 0.16 % 0.06 % 0.20 % NPLs held-for-investment to loans held-for-investment 0.18 % 0.17 % 0.16 % 0.06 % 0.20 % NPAs to total assets 0.15 % 0.23 % 0.30 % 0.05 % 0.24 % ACL on loans to: NPLs held-for-investment 652.63 % 703.09 % 742.32 % 2,251.61 % 838.13 % (1) Under the legacy loan segments Total nonaccrual loans held-for-investment were $4.7 million at December 31, 2024, an increase of $777 thousand, or 19.8%, from $3.9 million at December 31, 2023.
Management believes that the projections used are reasonable and align with the Company’s expectation of the economic environment over the next 4 quarters. 58 The following table presents net charge-offs as a percentage to the average loan held for investment balances in each of the loan categories for the periods indicated: For the Year Ended December 31, 2025 2024 2023 ($ in thousands) Average Balance Net Charge-offs (Recoveries) Percentage Average Balance Net Charge-offs (Recoveries) Percentage Average Balance Net Charge-offs (Recoveries) Percentage Commercial real estate: Commercial property $ 927,453 $ — — % $ 862,697 $ — — % $ 794,642 $ — — % Business property 721,715 303 0.04 % 584,664 100 0.02 % 537,044 (5) (0.01) % Multifamily 177,019 — — % 156,965 20 0.01 % 127,338 — — % Construction 25,288 — — % 26,136 — — % 18,565 — — % Total commercial real estate 1,851,475 303 0.02 % 1,630,462 120 0.01 % 1,477,589 (5) (0.01) % Commercial and industrial 478,565 542 0.11 % 403,172 398 0.11 % 263,447 (1,062) (0.40) % Consumer: Residential mortgage 403,190 — — % 386,512 — — % 358,303 — — % Other consumer 9,223 77 0.83 % 16,923 (125) (0.92) % 21,602 40 0.19 % Total consumer 412,413 77 0.02 % 403,435 (125) (0.04) % 379,905 40 0.01 % Total loans held-for-investment $ 2,742,453 $ 922 0.03 % $ 2,437,069 $ 393 0.02 % $ 2,120,941 $ (1,027) (0.05) % The following table presents net charge-offs as a percentage to the average loan held for investment balances in each of the legacy loan categories for the periods indicated: For the Year Ended December 31, 2022 2021 ($ in thousands) Average Balance Net Charge-offs (Recoveries) Percentage Average Balance Net Charge-offs (Recoveries) Percentage Real estate loans: Commercial property $ 1,201,405 $ — — % $ 983,129 $ — — % Residential property 261,576 — — % 197,741 — — % SBA property 115,488 — — % 125,051 (39) (0.03) % Construction 12,202 — — % 12,715 — — % Total real estate loans 1,590,671 — — % 1,318,636 (39) (0.01) % Commercial and industrial loans: Commercial term 74,934 (8) (0.01) % 77,383 (200) (0.26) % Commercial lines of credit 111,864 1,063 0.95 % 92,874 (146) (0.16) % SBA commercial term 16,262 (21) (0.13) % 19,390 (104) (0.54) % SBA PPP 13,732 — — % 150,043 — — % Total commercial and industrial loans 216,792 1,034 0.48 % 339,690 (450) (0.13) % Other consumer loans 21,991 7 0.03 % 21,101 22 0.10 % Total loans held-for-investment $ 1,829,454 $ 1,041 0.06 % $ 1,679,427 $ (467) (0.03) % 59 Loans 30 to 89 Days Past Due and Still Accruing The following table presents a summary of loans 30 to 89 days past due and still accruing as of the dates indicated: December 31, ($ in thousands) 2025 2024 2023 2022 2021 Commercial real estate: Commercial property $ — $ 433 $ — N/A N/A Business property 140 333 560 N/A N/A Total commercial real estate 140 766 560 $ — $ — Commercial and industrial 26 — 217 — — Consumer: Residential mortgage 674 3,982 604 — 461 Other consumer 115 154 47 134 93 Total consumer 789 4,136 651 134 554 Total $ 955 $ 4,902 $ 1,428 $ 134 $ 554 Nonperforming Loans and Nonperforming Assets The following table presents a summary of total NPLs and NPAs as of the dates indicated: December 31, ($ in thousands) 2025 2024 2023 2022 2021 Nonaccrual loans held-for-investment: Commercial real estate: Commercial property (1) N/A N/A N/A $ 2,400 $ — SBA property (1) N/A N/A N/A 585 746 Commercial property $ 1,403 $ 1,851 $ 958 N/A N/A Business property 938 2,336 2,865 N/A N/A Multifamily — — — — 0 Construction — — — — 0 Total commercial real estate 2,341 4,187 3,823 2,985 746 Commercial and industrial 161 79 68 — 213 Consumer: Residential property 5,403 403 — 372 — Other consumer 5 24 25 3 35 Total consumer 5,408 427 25 375 35 Total nonaccrual loans held-for-investment 7,910 4,693 3,916 3,360 994 Loans past due 90 days or more still on accrual — — — — — NPLs held-for-investment 7,910 4,693 3,916 3,360 994 NPLs held-for-sale — — — 4,000 — Total NPLs 7,910 4,693 3,916 7,360 994 Other real estate owned — — 2,558 — — NPAs $ 7,910 $ 4,693 $ 6,474 $ 7,360 $ 994 Nonaccrual loans held-for-investment to loans held-for-investment 0.28 % 0.18 % 0.17 % 0.16 % 0.06 % NPLs held-for-investment to loans held-for-investment 0.28 % 0.18 % 0.17 % 0.16 % 0.06 % NPAs to total assets 0.24 % 0.15 % 0.23 % 0.30 % 0.05 % ACL on loans to nonaccrual loans held-for-investment 422.01 % 652.63 % 703.09 % 742.32 % 2,251.61 % (1) Under the legacy loan segments Total nonaccrual loans held-for-investment were $7.9 million at December 31, 2025, an increase of $3.2 million, or 68.5%, from $4.7 million at December 31, 2024.
The following table presents the composition of the Company’s loans held-for-sale as of the dates indicated: December 31, ($ in thousands) 2024 2023 2022 2021 2020 Commercial real estate: SBA property (1) N/A N/A $ 16,473 $ 33,603 $ 1,411 Commercial property $ 3,307 $ — N/A N/A N/A Business property 713 2,802 N/A N/A N/A Total commercial real estate 4,020 2,802 16,473 33,603 1,411 Commercial and industrial 2,272 2,353 6,338 3,423 268 Consumer: Residential mortgage — — — — 300 Total consumer — — — — 300 Loans held-for-sale $ 6,292 $ 5,155 $ 22,811 $ 37,026 $ 1,979 (1) Under the legacy loan segments Loans held-for-sale were $6.3 million at December 31, 2024, an increase of $1.1 million, or 22.1%, from $5.2 million at December 31, 2023.
The following table presents the composition of the Company’s loans held-for-sale as of the dates indicated: December 31, ($ in thousands) 2025 2024 2023 2022 2021 Commercial real estate: SBA property (1) N/A N/A N/A $ 16,473 $ 33,603 Commercial property $ 3,750 $ 3,307 $ — N/A N/A Business property 2,734 713 2,802 N/A N/A Total commercial real estate 6,484 4,020 2,802 16,473 33,603 Commercial and industrial 5,593 2,272 2,353 6,338 3,423 Loans held-for-sale $ 12,077 $ 6,292 $ 5,155 $ 22,811 $ 37,026 (1) Under the legacy loan segments Loans held-for-sale were $12.1 million at December 31, 2025, an increase of $5.8 million, or 91.9%, from $6.3 million at December 31, 2024.
The Company is committed to making corporate decisions that directly benefit its shareholders, and during the year ended December 31, 2024, increased its dividend per common share by $0.03, or 4.3%, to $0.72 from $0.69 for the year ended December 31, 2023.
The Company is committed to making corporate decisions that directly benefit its shareholders, and during the year ended December 31, 2025, increased its dividend per common share by $0.08, or 11.1%, to $0.80 from $0.72 for the year ended December 31, 2024.
The increase in average balance was primarily due to an increase in time deposits, partially offset by decreases in savings, NOW and money market accounts. The increase in average cost was primarily due to the rising market rates. For the years ended December 31, 2023 and 2022, average cost on total interest-bearing deposits was 4.04% and 1.08%, respectively.
The increase in average balance was primarily due to an increase in time deposits, and NOW and money market accounts, partially offset by decreases in savings. The decrease in average cost was primarily due to the lower market rates. For the years ended December 31, 2025 and 2024, average cost on total interest-bearing deposits was 4.12% and 4.78%, respectively.
Treasury under the ECIP. The ECIP investment is treated as tier 1 capital for regulatory capital purposes. The Series C Preferred Stock bears no dividend for the first 24 months following the investment date.
Treasury under the ECIP. The ECIP investment qualifies as tier 1 capital for the purposes of the bank regulatory capital requirements. The Series C Preferred Stock accrued no dividend for the first 24 months following the investment date.
As of December 31, 2024 and 2023, total deposits were comprised of 20.9% and 25.3%, respectively, of noninterest-bearing demand accounts, 17.9% and 17.9%, respectively, of savings, NOW and money market accounts and 61.2% and 56.8%, respectively, of time deposits.
As of December 31, 2025 and 2024, total deposits were comprised of 19.9% and 20.9%, respectively, of noninterest-bearing demand accounts, 24.2% and 17.9%, respectively, of savings, NOW and money market accounts and 55.9% and 61.2%, respectively, of time deposits.
The increase was primarily due to loans placed on nonaccrual status during the year ended December 31, 2024 of $7.3 million, partially offset by payoffs and paydowns of $3.8 million, loans returned to accrual status of $2.0 million, a loan transferred to OREO of $94 thousand, and charge-offs of $691 thousand. 59 Loans are generally placed on nonaccrual status when they become 90 days past due, unless management believes the loan is well secured and in the process of collection.
The increase was primarily due to loans placed on nonaccrual status during the year ended December 31, 2025 of $6.1 million, partially offset by payoffs and paydowns of $2.3 million and charge-offs of $582 thousand. 60 Loans are generally placed on nonaccrual status when they become 90 days past due, unless management believes the loan is well secured and in the process of collection.
The increase in total assets for the year ended December 31, 2024 was primarily due to increases in loans held-for-investment and deferred tax assets.
The increase in total assets for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment and securities available-for-sale.
The decrease in net income for the year ended December 31, 2023 compared with the year ended December 31, 2022 was primarily due to an increase in noninterest expense, decreases in noninterest income and net interest income, partially offset by reversal for credit losses of $132 thousand for the year ended December 31, 2023 compared with provision for credit losses of $3.6 million for the year ended December 31, 2022.
The increase in net income for the year ended December 31, 2025 compared with the year ended December 31, 2024 was primarily due to an increase in net interest income and noninterest income and a decrease in noninterest expense, partially offset by an increase in provision for credit losses of $4.0 million for the year ended December 31, 2025 compared with $3.4 million for the year ended December 31, 2024.
See "Non-GAAP Measures" for a reconciliation to its most comparable GAAP measure. 43 Executive Summary Financial Highlights • Net income was $25.8 million for the year ended December 31, 2024, a decrease of $4.9 million, or 15.9%, from $30.7 million for the year ended December 31, 2023 and a decrease of $9.2 million, or 26.2%, from $35.0 million for the year ended December 31, 2022; ◦ Provision (reversal) for credit losses (1) was $3.4 million, $(132) thousand and $3.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. ◦ Diluted earnings per common share was $1.74, $2.12 and $2.31 for the years ended December 31, 2024, 2023 and 2022, respectively. ◦ Net interest margin was 3.17%, 3.57% and 4.08% for the years ended December 31, 2024, 2023 and 2022, respectively. • Total assets were $3.06 billion at December 31, 2024, an increase of $274.5 million, or 9.8%, from $2.79 billion at December 31, 2023; • Loans held-for-investment were $2.63 billion at December 31, 2024, an increase of $305.9 million, or 13.2%, from $2.32 billion at December 31, 2023; • Total deposits were $2.62 billion at December 31, 2024, an increase of $264.2 million, or 11.2%, from $2.35 billion at December 31, 2023; • The Company declared and paid cash dividends of $0.72, $0.69, and $0.60 per common share for the years ended December 31, 2024, 2023 and 2022, respectively; and • The Company purchased and retired 14,947, 512,657, and 362,557 shares of common stock for the years ended December 31, 2024, 2023 and 2022, respectively.
See "Non-GAAP Measures" for a reconciliation to its most comparable GAAP measure. 44 Executive Summary Financial Highlights • Net income available for common shareholders was $37.2 million for the year ended December 31, 2025, an increase of $12.2 million, or 48.8%, from $25.0 million for the year ended December 31, 2024 and an increase of $6.4 million, or 21.0%, from $30.7 million for the year ended December 31, 2023; ◦ Provision (reversal) for credit losses was $4.0 million, $3.4 million and $(132) thousand for the years ended December 31, 2025, 2024 and 2023, respectively. ◦ Diluted earnings per common share was $2.58, $1.74 and $2.12 for the years ended December 31, 2025, 2024 and 2023, respectively. ◦ Net interest margin was 3.29%, 3.17% and 3.57% for the years ended December 31, 2025, 2024 and 2023, respectively. • Total assets were $3.28 billion at December 31, 2025, an increase of $217.8 million, or 7.1%, from $3.06 billion at December 31, 2024; • Loans held-for-investment were $2.82 billion at December 31, 2025, an increase of $191.0 million, or 7.3%, from $2.63 billion at December 31, 2024; • Total deposits were $2.80 billion at December 31, 2025, an increase of $179.6 million, or 6.9%, from $2.62 billion at December 31, 2024; • The Company declared and paid cash dividends of $0.80, $0.72 and $0.69 per common share for the years ended December 31, 2025, 2024 and 2023, respectively; and • The Company purchased and retired 358,251, 14,947 and 512,657 shares of common stock for the years ended December 31, 2025, 2024 and 2023, respectively.
Net interest income is affected by changes in the balances of interest-earning assets and interest-bearing liabilities and changes in the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. 44 The following table presents interest income, average interest-earning assets, interest expense, average interest-bearing liabilities, and their correspondent yields and costs expressed both in dollars and rates for the periods indicated: Year Ended December 31, 2024 2023 2022 ($ in thousands) Average Balance Interest Yield/Cost Average Balance Interest Yield/Cost Average Balance Interest Yield/Cost Interest-earning assets: Total loans (1) $ 2,445,080 $ 164,301 6.72 % $ 2,137,851 $ 136,029 6.36 % $ 1,872,557 $ 95,054 5.08 % Mortgage-backed securities 107,768 3,780 3.51 % 98,903 3,001 3.03 % 89,066 1,826 2.05 % Collateralized mortgage obligation 22,806 975 4.28 % 25,466 1,039 4.08 % 23,479 545 2.32 % SBA loan pool securities 6,756 283 4.19 % 8,166 325 3.98 % 10,309 208 2.02 % Municipal securities - tax exempt (2) 2,917 102 3.50 % 3,788 126 3.33 % 4,874 140 2.87 % Corporate bonds 4,208 188 4.47 % 4,273 188 4.40 % 4,810 188 3.91 % Interest-bearing deposits in other financial institutions 189,628 10,031 5.29 % 186,850 9,621 5.15 % 184,502 3,212 1.74 % FHLB and other bank stock 13,651 1,157 8.48 % 11,959 848 7.09 % 9,703 578 5.96 % Total interest-earning assets 2,792,814 180,817 6.47 % 2,477,256 151,177 6.10 % 2,199,300 101,751 4.63 % Noninterest-earning assets: Cash and due from banks 23,044 21,565 20,735 ACL on loans (28,397) (25,495) (22,125) Other assets 90,425 76,444 73,951 Total noninterest-earning assets 85,072 72,514 72,561 Total assets $ 2,877,886 $ 2,549,770 $ 2,271,861 Interest-bearing liabilities: Deposits: NOW and money market accounts $ 475,754 19,149 4.02 % $ 470,750 16,190 3.44 % $ 504,275 4,970 0.99 % Savings 6,312 16 0.25 % 7,499 18 0.24 % 14,068 9 0.06 % Time deposits 1,410,878 71,322 5.06 % 1,059,985 45,957 4.34 % 593,106 7,005 1.18 % Other borrowings 31,033 1,713 5.52 % 9,192 508 5.53 % 6,290 135 2.15 % Total interest-bearing liabilities 1,923,977 92,200 4.79 % 1,547,426 62,673 4.05 % 1,117,739 12,119 1.08 % Noninterest-bearing liabilities: Demand deposits 539,263 629,774 831,621 Other liabilities 59,026 32,061 16,061 Total noninterest-bearing liabilities 598,289 661,835 847,682 Total liabilities 2,522,266 2,209,261 1,965,421 Shareholders’ equity 355,620 340,509 306,440 Total liabilities and shareholders’ equity $ 2,877,886 $ 2,549,770 $ 2,271,861 Net interest income $ 88,617 $ 88,504 $ 89,632 Net interest spread (3) 1.68 % 2.05 % 3.55 % Net interest margin (4) 3.17 % 3.57 % 4.08 % Cost of deposits 3.72 % 2.87 % 0.62 % Cost of funds (5) 3.74 % 2.88 % 0.62 % (1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans.
Net interest income is affected by changes in the balances of interest-earning assets and interest-bearing liabilities and changes in the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. 45 The following table presents interest income, average interest-earning assets, interest expense, average interest-bearing liabilities, and their correspondent yields and costs expressed both in dollars and rates for the periods indicated: Year Ended December 31, 2025 2024 2023 ($ in thousands) Average Balance Interest Yield/Cost Average Balance Interest Yield/Cost Average Balance Interest Yield/Cost Interest-earning assets: Total loans (1) $ 2,757,090 $ 180,345 6.54 % $ 2,445,080 $ 164,301 6.72 % $ 2,137,851 $ 136,029 6.36 % Mortgage-backed securities 119,335 4,614 3.87 % 107,768 3,780 3.51 % 98,903 3,001 3.03 % Collateralized mortgage obligation 20,160 794 3.94 % 22,806 975 4.28 % 25,466 1,039 4.08 % SBA loan pool securities 5,074 177 3.49 % 6,756 283 4.19 % 8,166 325 3.98 % Municipal securities - tax exempt (2) 2,424 87 3.59 % 2,917 102 3.50 % 3,788 126 3.33 % Corporate bonds 4,660 188 4.03 % 4,208 188 4.47 % 4,273 188 4.40 % Interest-bearing deposits in other financial institutions 232,652 10,076 4.33 % 189,628 10,031 5.29 % 186,850 9,621 5.15 % FHLB and other bank stock 14,706 1,255 8.53 % 13,651 1,157 8.48 % 11,959 848 7.09 % Total interest-earning assets 3,156,101 197,536 6.26 % 2,792,814 180,817 6.47 % 2,477,256 151,177 6.10 % Noninterest-earning assets: Cash and due from banks 23,999 23,044 21,565 ACL on loans (32,267) (28,397) (25,495) Other assets 99,631 90,425 76,444 Total noninterest-earning assets 91,363 85,072 72,514 Total assets $ 3,247,464 $ 2,877,886 $ 2,549,770 Interest-bearing liabilities: Deposits: NOW and money market accounts $ 578,796 20,840 3.60 % $ 475,754 19,149 4.02 % $ 470,750 16,190 3.44 % Savings 5,448 13 0.24 % 6,312 16 0.25 % 7,499 18 0.24 % Time deposits 1,657,709 71,408 4.31 % 1,410,878 71,322 5.06 % 1,059,985 45,957 4.34 % Other borrowings 30,619 1,397 4.56 % 31,033 1,713 5.52 % 9,192 508 5.53 % Total interest-bearing liabilities 2,272,572 93,658 4.12 % 1,923,977 92,200 4.79 % 1,547,426 62,673 4.05 % Noninterest-bearing liabilities: Demand deposits 532,426 539,263 629,774 Other liabilities 65,476 59,026 32,061 Total noninterest-bearing liabilities 597,902 598,289 661,835 Total liabilities 2,870,474 2,522,266 2,209,261 Shareholders’ equity 376,990 355,620 340,509 Total liabilities and shareholders’ equity $ 3,247,464 $ 2,877,886 $ 2,549,770 Net interest income $ 103,878 $ 88,617 $ 88,504 Net interest spread (3) 2.14 % 1.68 % 2.05 % Net interest margin (4) 3.29 % 3.17 % 3.57 % Cost of deposits 3.33 % 3.72 % 2.87 % Cost of funds (5) 3.34 % 3.74 % 2.88 % (1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans.
Occupancy and equipment expense increased primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and two branches into one location in Orange County, California in 2024. Professional fees increased primarily due to additional professional fees related to a core system conversion, which was completed in April 2024.
Occupancy and equipment expense increased primarily due to an expansion of headquarters location in the second half of 2023 and a relocation of a regional office and the consolidation of two branches into one location in Orange County, California in 2024.
Director fees and expenses increased primarily due to an increase in stock-based compensation expense from stock options granted during the three months ended December 31, 2023. Regulatory assessment expense increased primarily due to an increase in balance sheet.
Data processing expense decreased primarily due to one-time new relationship credit from the aforementioned core system conversion. Director fees and expenses increased primarily due to an increase in stock-based compensation expense from stock options granted during the three months ended December 31, 2023. Regulatory assessment expense increased primarily due to an increase in balance sheet.
Other expense included other loan related legal expenses of $432 thousand and $534 thousand, respectively, armed guard expense of $867 thousand and $798 thousand, respectively, office expenses of $2.2 million and $2.2 million, respectively.
Other expense included other loan related legal expenses of $432 thousand and $534 thousand, respectively, armed guard expense of $867 thousand and $798 thousand, respectively, office expenses of $2.2 million and $2.2 million, respectively, for the years ended December 31, 2024 and 2023.
Other income included wire and remittance fees of $625 thousand and $643 thousand, respectively, and debit card interchange fees of $339 thousand and $335 thousand, respectively, for the years ended December 31, 2023 and 2022. 49 Noninterest Expense Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents the components of noninterest expense for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Salaries and employee benefits $ 35,661 $ 34,572 $ 1,089 3.1 % Occupancy and equipment 9,117 7,924 1,193 15.1 % Professional fees 3,408 3,087 321 10.4 % Marketing and business promotion 1,886 2,327 (441) (19.0) % Data processing 1,499 1,552 (53) (3.4) % Director fees and expenses 906 756 150 19.8 % Regulatory assessments 1,256 1,103 153 13.9 % Other expenses 6,290 4,736 1,554 32.8 % Total noninterest expense $ 60,023 $ 56,057 $ 3,966 7.1 % Salaries and employee benefits increased primarily due to increases in salaries, bonus accrual, and incentives tied to LPO originated SBA loan sales, partially offset by a decrease in vacation accruals.
During the year ended December 31, 2024, the Company recognized a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guarantee during the second quarter of 2024. 51 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents the components of noninterest expense for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Salaries and employee benefits $ 35,661 $ 34,572 $ 1,089 3.1 % Occupancy and equipment 9,117 7,924 1,193 15.1 % Professional fees 3,408 3,087 321 10.4 % Marketing and business promotion 1,886 2,327 (441) (19.0) % Data processing 1,499 1,552 (53) (3.4) % Director fees and expenses 906 756 150 19.8 % Regulatory assessments 1,256 1,103 153 13.9 % Other expenses 6,290 4,736 1,554 32.8 % Total noninterest expense $ 60,023 $ 56,057 $ 3,966 7.1 % Salaries and employee benefits increased primarily due to increases in salaries, bonus accrual, and incentives tied to SBA loan sales, partially offset by a decrease in vacation accruals.
Gain on sale of loans decreased primarily due to decreases in sales volume and gain margin. The Company sold SBA loans of $82.3 million with a gain of $3.6 million during the year ended December 31, 2023.
Gain on sale of loans increased primarily due to increases in gain margin and sales volume. The Company sold SBA loans of $85.8 million with a gain of $4.6 million during the year ended December 31, 2025.
The following table presents outstanding financial commitments whose contractual amount represents credit risk as of the dates indicated: December 31, 2024 2023 ($ in thousands) Fixed Rate Variable Rate Fixed Rate Variable Rate Unused lines of credit $ 12,923 $ 370,313 $ 2,808 $ 347,652 Unfunded loan commitments — 17,339 4,020 47,038 Standby letters of credit 5,279 1,516 4,638 1,786 Commercial letters of credit — — — 160 Total $ 18,202 $ 389,168 $ 11,466 $ 396,636 The Company applies an expected credit loss estimation methodology applied to each respective loan segment for determining the ACL on off-balance sheet credit exposures.
The following table presents outstanding financial commitments whose contractual amount represents credit risk as of the dates indicated: December 31, 2025 2024 ($ in thousands) Fixed Rate Variable Rate Fixed Rate Variable Rate Unused lines of credit $ 12,663 $ 348,287 $ 12,923 $ 370,313 Unfunded loan commitments — 7,132 — 17,339 Standby letters of credit 5,705 1,625 5,279 1,516 Total $ 18,368 $ 357,044 $ 18,202 $ 389,168 The Company applies an expected credit loss estimation methodology applied to each respective loan segment for determining the ACL on off-balance sheet credit exposures.
From January 1, 2020 through December 31, 2024, the Company has repurchased and retired at total of 1,998,904 shares of common stock at a weighted-average price of $16.58 per share under several stock repurchase programs. 62 Emergency Capital Investment Program On May 24, 2022, the Company issued 69,141 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference of $1,000 per share (“Series C Preferred Stock”) for the capital investment of $69.1 million from the U.S.
From January 1, 2021 through December 31, 2025, the Company has repurchased and retired at total of 1,928,681 shares of common stock at a weighted-average price of $17.51 per share under several stock repurchase programs. 63 Emergency Capital Investment Program On May 24, 2022, the Company issued 69,141 shares of Series C Preferred Stock with a liquidation preference of $1,000 per share for the capital investment of $69.1 million from the U.S.
The increase was primarily due to the net income of $25.8 million and stock options exercised of $353 thousand, partially offset by cash dividends declared on common stock of $10.3 million, preferred stock dividends of $834 thousand, an increase in other comprehensive loss from the fair value change in securities available-for-sale of $395 thousand, and repurchase of common stock of $222 thousand.
The increase was primarily due to the net income of $37.5 million, a decrease in other comprehensive loss from the fair value change in securities available-for-sale of $4.5 million and stock options exercised of $2.3 million, partially offset by cash dividends declared on common stock of $11.5 million, preferred stock dividends of $300 thousand and repurchase of common stock of $7.1 million.
Contractual Obligations The following table presents supplemental information regarding total contractual obligations as of the dates indicated: ($ in thousands) Within One Year One to Three Years Three to Five Years Over Five Years Total December 31, 2024 Time deposits $ 1,596,769 $ 4,099 $ 183 $ — $ 1,601,051 Other short-term borrowings 15,000 — — — 15,000 Operating leases 3,397 5,716 4,910 9,111 23,134 Total $ 1,615,166 $ 9,815 $ 5,093 $ 9,111 $ 1,639,185 December 31, 2023 Time deposits $ 1,330,271 $ 5,279 $ 186 $ — $ 1,335,736 FHLB advances 39,000 — — — 39,000 Operating leases 3,385 6,233 4,959 10,695 25,272 Total $ 1,372,656 $ 11,512 $ 5,145 $ 10,695 $ 1,400,008 Management believes that the Company will be able to meet its contractual obligations as they come due through the maintenance of adequate cash levels.
Contractual Obligations The following table presents supplemental information regarding total contractual obligations as of the dates indicated: ($ in thousands) Within One Year One to Three Years Three to Five Years Over Five Years Total December 31, 2025 Time deposits $ 1,559,276 $ 4,293 $ 123 $ — $ 1,563,692 FHLB advances 34,000 — — — 34,000 Operating leases 3,562 6,277 5,708 7,585 23,132 Total $ 1,596,838 $ 10,570 $ 5,831 $ 7,585 $ 1,620,824 December 31, 2024 Time deposits $ 1,596,769 $ 4,099 $ 183 $ — $ 1,601,051 Other short-term borrowings 15,000 — — — 15,000 Operating leases 3,397 5,716 4,910 9,111 23,134 Total $ 1,615,166 $ 9,815 $ 5,093 $ 9,111 $ 1,639,185 Management believes that the Company will be able to meet its contractual obligations as they come due through the maintenance of adequate cash levels.
Year Ended December 31, 2024 vs. 2023 Year Ended December 31, 2023 vs. 2022 Increase (Decrease) Due to Net Increase (Decrease) Increase (Decrease) Due to Net Increase (Decrease) ($ in thousands) Volume Rate Volume Rate Interest earned on: Total loans $ 19,549 $ 8,723 $ 28,272 $ 13,467 $ 27,508 $ 40,975 Investment securities 128 521 649 177 1,595 1,772 Other interest-earning assets 235 484 719 90 6,589 6,679 Total interest income 19,912 9,728 29,640 13,734 35,692 49,426 Interest paid on: Savings, NOW, and money market deposits 129 2,828 2,957 (385) 11,614 11,229 Time deposits 15,213 10,152 25,365 5,514 33,438 38,952 Other borrowings 1,207 (2) 1,205 62 311 373 Total interest expense 16,549 12,978 29,527 5,191 45,363 50,554 Change in net interest income $ 3,363 $ (3,250) $ 113 $ 8,543 $ (9,671) $ (1,128) Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents the components of net interest income for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Interest income: Interest and fees on loans $ 164,301 $ 136,029 $ 28,272 20.8 % Interest on investment securities 5,328 4,679 649 13.9 % Interest and dividends on other interest-earning assets 11,188 10,469 719 6.9 % Total interest income 180,817 151,177 29,640 19.6 % Interest expense: Interest on deposits 90,487 62,165 28,322 45.6 % Interest on other borrowings 1,713 508 1,205 237.2 % Total interest expense 92,200 62,673 29,527 47.1 % Net interest income $ 88,617 $ 88,504 $ 113 0.1 % Net interest income increased primarily due to a 12.7% increase in average balance of interest-earning assets and a 37 basis point increase in average yield on interest-earning assets, partially offset by a 24.3% increase in average balance of interest-bearing liabilities and a 74 basis point increase in average cost of interest-bearing liabilities.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents the components of net interest income for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Interest income: Interest and fees on loans $ 164,301 $ 136,029 $ 28,272 20.8 % Interest on investment securities 5,328 4,679 649 13.9 % Interest and dividends on other interest-earning assets 11,188 10,469 719 6.9 % Total interest income 180,817 151,177 29,640 19.6 % Interest expense: Interest on deposits 90,487 62,165 28,322 45.6 % Interest on borrowings 1,713 508 1,205 237.2 % Total interest expense 92,200 62,673 29,527 47.1 % Net interest income $ 88,617 $ 88,504 $ 113 0.1 % Net interest income increased primarily due to a 12.7% increase in average balance of interest-earning assets and a 37 basis point increase in average yield on interest-earning assets, partially offset by a 24.3% increase in average balance of interest-bearing liabilities and a 74 basis point increase in average cost of interest-bearing liabilities.
The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated: December 31, 2024 2023 ($ in thousands) Amortized Cost Fair Value Unrealized Gain (Loss) Amortized Cost Fair Value Unrealized Gain (Loss) Securities available-for-sale: U.S. government agency and U.S. government sponsored enterprise securities: Mortgage-backed securities $ 123,209 $ 112,439 $ (10,770) $ 114,485 $ 104,091 $ (10,394) Collateralized mortgage obligations 22,753 21,237 (1,516) 25,611 24,173 (1,438) SBA loan pool securities 6,328 6,008 (320) 7,773 7,450 (323) Municipal bonds 2,452 2,420 (32) 3,306 3,329 23 Corporate bonds 5,000 4,245 (755) 5,000 4,280 (720) Total securities available-for-sale $ 159,742 $ 146,349 $ (13,393) $ 156,175 $ 143,323 $ (12,852) Total carrying value of investment securities were $146.3 million at December 31, 2024, an increase of $3.0 million, or 2.1%, from $143.3 million at December 31, 2023.
The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated: December 31, 2025 2024 ($ in thousands) Amortized Cost Fair Value Unrealized Gain (Loss) Amortized Cost Fair Value Unrealized Gain (Loss) Securities available-for-sale: U.S. government agency and U.S. government sponsored enterprise securities: Mortgage-backed securities $ 135,728 $ 129,822 $ (5,906) $ 123,209 $ 112,439 $ (10,770) Collateralized mortgage obligations 19,499 18,762 (737) 22,753 21,237 (1,516) SBA loan pool securities 4,363 4,193 (170) 6,328 6,008 (320) Municipal bonds 2,463 2,484 21 2,452 2,420 (32) Corporate bonds 5,000 4,748 (252) 5,000 4,245 (755) Total securities available-for-sale $ 167,053 $ 160,009 $ (7,044) $ 159,742 $ 146,349 $ (13,393) Total carrying value of investment securities were $160.0 million at December 31, 2025, an increase of $13.7 million, or 9.3%, from $146.3 million at December 31, 2024.
For the years ended December 31, 2023 and 2022, yield on total other interest-earning assets was 5.27% and 1.95%, respectively. 47 Interest expense on deposits increased primarily due to a 38.4% increase in average balance of interest-bearing deposits and a 296 basis point increase in average cost of interest-bearing deposits.
For the years ended December 31, 2025 and 2024, yield on total other interest-earning assets was 4.58% and 5.50%, respectively. Interest expense on deposits increased primarily due to an 18.4% increase in average balance of interest-bearing deposits, partially offset by a 66 basis point decrease in average cost of interest-bearing deposits.
Although management uses the best information reasonably available to derive estimates and assumptions necessary to measure an appropriate level of the ACL, these estimates and assumptions are subject to change in future periods, which may have a material impact on the level of the ACL and the Company’s results of operations.
Although management uses the best information reasonably available to derive estimates and assumptions necessary to measure an appropriate level of the ACL, these estimates and assumptions are subject to change in future periods, which may have a material impact on the level of the ACL and the Company’s results of operations. 40 Loan portfolio segments identified by the Company include: commercial real estate (commercial property, business property, multifamily and construction), commercial and industrial, and consumer loans (residential mortgage and other consumer).
The increase was primarily due to purchases of $23.5 million, partially offset by principal paydowns and calls of $19.8 million, a decrease in fair value of securities available-for-sale of $541 thousand, and net premium amortization of $159 thousand.
The increase was primarily due to purchases of $31.7 million and an increase in fair value of securities available-for-sale of $6.3 million, partially offset by principal paydowns and calls of $24.2 million and net premium amortization of $146 thousand.
Loan portfolio segments identified by the Company include: commercial real estate (commercial property, business property, multifamily and construction), commercial and industrial, and consumer loans (residential mortgage and other consumer). 38 Each loan segment bears varying degrees of risk based on, among other things, the type of loan and collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions and interest rate changes.
Each loan segment bears varying degrees of risk based on, among other things, the type of loan and collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions and interest rate changes.
During the year ended December 31, 2024, the Company also repurchased 14,947 shares of common stock, totaling $222 thousand. Overall, the Company returned 42.0% of its earnings to common shareholders through dividends and common share repurchases during the year ended December 31, 2024.
During the year ended December 31, 2025, the Company also repurchased 358,251 shares of common stock, totaling $7.1 million. Overall, the Company returned 49.6% of its earnings to common shareholders through dividends and common share repurchases during the year ended December 31, 2025.
During the year ended December 31, 2022, the Company sold SBA loans of $122.9 million with a gain of $8.0 million and residential mortgage loans of $858 thousand with a gain of $8 thousand.
During the year ended December 31, 2024, the Company sold SBA loans of $71.1 million with a gain of $3.8 million and a residential mortgage loan of $676 thousand with no gain.
For the years ended December 31, 2023 and 2022, average yield on total investment securities was 3.33% and 2.19%, respectively. Interest income on other interest-earning assets increased primarily due to a 332 basis point increase in average yield and a 2.4% increase in average balance.
For the years ended December 31, 2025 and 2024, average yield on total investment securities was 3.86% and 3.69%, respectively. 47 Interest income on other interest-earning assets increased primarily due to a 21.7% increase in average balance, partially offset by a 92 basis point decrease in average yield.
The following table presents a summary of the Company’s liquidity position as of the dates indicated: December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Cash and cash equivalents $ 198,792 $ 242,342 $ (43,550) (18.0) % Cash and cash equivalents to total assets 6.5 % 8.7 % Available borrowing capacity: FHLB advances $ 722,439 $ 602,976 119,463 19.8 % Federal Reserve Discount Window 586,525 528,893 57,632 10.9 % Overnight federal funds lines 50,000 65,000 (15,000) (23.1) % Total $ 1,358,964 $ 1,196,869 $ 162,095 13.5 % Total available borrowing capacity to total assets 44.4 % 42.9 % The Company also maintains relationships in the capital markets with brokers and dealers to issue time deposits and money market accounts.
The following table presents a summary of the Company’s liquidity position as of the dates indicated: December 31, Amount Change Percentage Change ($ in thousands) 2025 2024 Cash and cash equivalents $ 207,142 $ 198,792 $ 8,350 4.2 % Cash and cash equivalents to total assets 6.3 % 6.5 % Available borrowing capacity: FHLB advances $ 840,607 $ 722,439 118,168 16.4 % Federal Reserve Discount Window 841,563 586,525 255,038 43.5 % Overnight federal funds lines 65,000 50,000 15,000 30.0 % Total $ 1,747,170 $ 1,358,964 $ 388,206 28.6 % Total available borrowing capacity to total assets 53.2 % 44.4 % The Company also maintains relationships in the capital markets with brokers and dealers to issue time deposits and money market accounts.
The following table presents the maturity of time deposits as of the dates indicated: ($ in thousands) Three Months or Less Three to Six Months Six Months to One Year Over One Year Total December 31, 2024 Time deposits of $250,000 or less $ 310,662 $ 286,304 $ 336,629 $ 2,332 $ 935,927 Time deposits of more than $250,000 295,977 138,664 228,533 1,950 665,124 Total $ 606,639 $ 424,968 $ 565,162 $ 4,282 $ 1,601,051 Not covered by deposit insurance $ 217,542 $ 96,493 $ 144,232 $ 1,568 $ 459,835 December 31, 2023 Time deposits of $250,000 or less $ 316,356 $ 165,091 $ 276,145 $ 2,442 $ 760,034 Time deposits of more than $250,000 207,539 140,583 224,557 3,023 575,702 Total $ 523,895 $ 305,674 $ 500,702 $ 5,465 $ 1,335,736 Not covered by deposit insurance $ 147,680 $ 107,482 $ 151,070 $ 2,405 $ 408,637 61 Shareholders’ Equity and Regulatory Capital Capital Resources Shareholders’ equity is influenced primarily by earnings, dividends paid on common stock and preferred stock, sales and redemptions of common stock and preferred stock, and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized gains or losses, net of taxes, on securities available-for-sale.
The following table presents the maturity of time deposits as of the dates indicated: ($ in thousands) Three Months or Less Three to Six Months Six Months to One Year Over One Year Total December 31, 2025 Time deposits of $250,000 or less $ 243,468 $ 316,179 $ 293,888 $ 1,524 $ 855,059 Time deposits of more than $250,000 309,465 147,875 248,401 2,892 708,633 Total $ 552,933 $ 464,054 $ 542,289 $ 4,416 $ 1,563,692 Not covered by deposit insurance $ 233,697 $ 103,783 $ 159,928 $ 2,337 $ 499,745 December 31, 2024 Time deposits of $250,000 or less $ 310,662 $ 286,304 $ 336,629 $ 2,332 $ 935,927 Time deposits of more than $250,000 295,977 138,664 228,533 1,950 665,124 Total $ 606,639 $ 424,968 $ 565,162 $ 4,282 $ 1,601,051 Not covered by deposit insurance $ 217,542 $ 96,493 $ 144,232 $ 1,568 $ 459,835 62 Shareholders’ Equity and Regulatory Capital Capital Resources Shareholders’ equity is influenced primarily by earnings, dividends paid on common stock and preferred stock, sales and redemptions of common stock and preferred stock, and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized gains or losses, net of taxes, on securities available-for-sale.
During the year ended December 31, 2022, the Company repurchased and retired 362,557 shares of common stock at a weighted-average price of $18.57 per share.
During the year ended December 31, 2024, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88 per share. During the year ended December 31, 2023, the Company repurchased and retired 512,657 shares of common stock at a weighted-average price of $17.22 per share.
Marketing and business promotion expense decreased primarily due to a higher, nonrecurring volume of advertisements in 2023 related to the Company’s 20th anniversary celebration. Data processing expense decreased primarily due to one-time new relationship credit from the aforementioned core system conversion.
Professional fees increased primarily due to additional professional fees related to a core system conversion, which was completed in April 2024. Marketing and business promotion expense decreased primarily due to a higher, nonrecurring volume of advertisements in 2023 related to the Company’s 20th anniversary celebration.
The increase in average yield was primarily due to new investment securities purchased at higher market rates and a decrease in net amortization of premium. The Company purchased $17.3 million and $57.4 million, respectively, of investment securities during the years ended December 31, 2023 and 2022.
The increase in average yield was primarily due to new investment securities purchased at higher rates and a decrease in net amortization of premium on investment securities.
Interest expense on other borrowings increased primarily due to a 46.1% increase in average balance and a 338 basis point increase in average cost. The increase in average cost was primarily due to the rising market rates.
Interest expense on other borrowings decreased primarily due to a 1.3% decrease in average balance and a 96 basis point decrease in average cost.
The Company utilizes these forecasts published by the Federal Open Market Committee (“FOMC”). The next year-end year-over-year change in forecasted real GDP increased to 2.1% in the December 2024 FOMC meeting from 1.4% in December 2023. The forecasted next year-end national unemployment rate increased to 4.3% in the December 2024 FOMC meeting from 4.1% in December 2023.
The increase in the quantitatively measured loss reserve requirement was primarily due to the changes in the macroeconomics outlook and prepayment assumption updates. The Company utilizes forecasts published by the Federal Open Market Committee (“FOMC”). The next year-end year-over-year change in forecasted real GDP increased to 2.3% in the December 2025 FOMC meeting from 2.1% in December 2024.
During the year ended December 31, 2023, SBA loans of $82.3 million with a gain of $3.6 million during the year ended December 31, 2023. Other income included wire and remittance fees of $626 thousand and $625 thousand, respectively, and debit card interchange fees of $340 thousand and $339 thousand, respectively, for the years ended December 31, 2024 and 2023.
Other income included wire and remittance fees of $699 thousand and $626 thousand, respectively, and debit card interchange fees of $396 thousand and $340 thousand, respectively, for the years ended December 31, 2025 and 2024.
Shareholders’ equity was $363.8 million at December 31, 2024, an increase of $14.9 million, or 4.3%, from $348.9 million at December 31, 2023.
Shareholders’ equity was $390.0 million at December 31, 2025, an increase of $26.2 million, or 7.2%, from $363.8 million at December 31, 2024.
Stock Repurchases During the year ended December 31, 2024, the Company repurchased and retired 14,947 shares of common stock at a weighted-average price of $14.88 per share. On July 25, 2024, the Company announced the amendment of the 2023 stock repurchase program, which extended the program expiration from August 2, 2024 to August 1, 2025.
Stock Repurchases During the year ended December 31, 2025, the Company repurchased and retired 358,251 shares of common stock at a weighted-average price of $19.82 per share under a stock repurchase program approved by the Board of Directors on August 2, 2023 authorizing the repurchase of up to 720,000 shares.
The increase in average balance of interest-earning assets was primarily due to growth in loans and investment securities, supported by deposit growth. The increases in average yield on interest-earning assets and average cost of interest-bearing liabilities were primarily due to the rising market rates during the year ended December 31, 2023.
The decreases in average yield on interest-earning assets and average cost of interest-bearing liabilities were primarily due to re-pricing at evaluated rates and originations at lower market rates during the year ended December 31, 2025.
December 31, 2024 Within One Year More than One Year through Five Years More than Five Years through Ten Years More than Ten Years Total ($ in thousands) Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Securities available-for-sale: U.S. government agency and U.S. government sponsored enterprise securities: Mortgage-backed securities $ — — % $ 1,103 1.65 % $ 6,080 2.05 % $ 116,026 3.51 % $ 123,209 3.42 % Collateralized mortgage obligations — — % 5,196 4.92 % 1,530 5.12 % 16,027 3.31 % 22,753 3.80 % SBA loan pool securities 163 2.57 % 1,341 4.82 % 1,900 2.57 % 2,924 3.85 % 6,328 3.64 % Municipal bonds — — % 82 3.01 % 1,098 3.50 % 1,272 3.58 % 2,452 3.52 % Corporate bonds — — % — — % 5,000 3.75 % — — % 5,000 3.75 % Total securities available-for-sale $ 163 2.57 % $ 7,722 4.42 % $ 15,608 3.06 % $ 136,249 3.50 % $ 159,742 3.50 % 53 Loans Held-For-Investment and Allowance for Credit Losses On January 1, 2023, the Company adopted ASU 2016-13 using the modified retrospective method through a cumulative-effect adjustment to retained earnings.
December 31, 2025 Within One Year More than One Year through Five Years More than Five Years through Ten Years More than Ten Years Total ($ in thousands) Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Amortized Cost Weighted-Average Yield Securities available-for-sale: U.S. government agency and U.S. government sponsored enterprise securities: Mortgage-backed securities $ 12 1.35 % $ 1,491 1.52 % $ 12,103 1.62 % $ 122,122 4.04 % $ 135,728 3.80 % Collateralized mortgage obligations — — % 5,686 4.20 % 8 2.43 % 13,805 3.24 % 19,499 3.52 % SBA loan pool securities — — % 639 4.05 % 1,598 2.54 % 2,126 3.26 % 4,363 3.11 % Municipal bonds — — % 83 3.00 % 1,503 3.50 % 877 3.68 % 2,463 3.55 % Corporate bonds — — % — — % 5,000 3.75 % — — % 5,000 3.75 % Total securities available-for-sale $ 12 1.35 % $ 7,899 3.67 % $ 20,212 2.36 % $ 138,930 3.95 % $ 167,053 3.74 % 54 Loans Held-For-Investment and Allowance for Credit Losses On January 1, 2023, the Company adopted ASU 2016-13 using the modified retrospective method through a cumulative-effect adjustment to retained earnings.
Provision (reversal) for Credit Losses The following table presents a composition of provision (reversal) for credit losses for the periods indicated: Year Ended December 31, ($ in thousands) 2024 2023 2022 Provision (reversal) for credit losses on loans $ 3,488 $ 497 $ 3,602 Provision (reversal) for credit losses on off-balance sheet credit exposure (1) (87) (629) 85 Total provision (reversal) for credit losses $ 3,401 $ (132) $ 3,687 (1) Provision (reversal) for credit losses on off-balance sheet credit exposures for the years ended December, 2022 was recorded in Other Expense on the Consolidated Income Statement.
Provision (reversal) for Credit Losses The following table presents a composition of provision (reversal) for credit losses for the periods indicated: Year Ended December 31, ($ in thousands) 2025 2024 2023 Provision (reversal) for credit losses on loans $ 3,675 $ 3,488 $ 497 Provision (reversal) for credit losses on off-balance sheet credit exposure 353 (87) (629) Total provision (reversal) for credit losses $ 4,028 $ 3,401 $ (132) Provision for credit losses on loans for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table presents the components of noninterest income for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2023 2022 Service charges and fees on deposits $ 1,475 $ 1,326 $ 149 11.2 % Loan servicing income 3,330 2,969 361 12.2 % Bank-owned life insurance income 753 706 47 6.7 % Gain on sale of loans 3,570 7,990 (4,420) (55.3) % Other income 1,555 1,508 47 3.1 % Total noninterest income $ 10,683 $ 14,499 $ (3,816) (26.3) % Service charges and fees on deposits increased primarily due to an increase in fee-based transactions.
See further discussion in “Allowance for Credit Losses.” 49 Noninterest Income Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The following table presents the components of noninterest income for the periods indicated: Year Ended December 31, Amount Change Percentage Change ($ in thousands) 2025 2024 Service charges and fees on deposits $ 1,540 $ 1,545 $ (5) (0.3) % Loan servicing income 2,945 3,365 (420) (12.5) % Bank-owned life insurance income 1,030 949 81 8.5 % Gain on sale of loans 4,617 3,752 865 23.1 % Other income 1,704 1,482 222 15.0 % Total noninterest income $ 11,836 $ 11,093 $ 743 6.7 % Service charges and fees on deposits decreased primarily due to a decrease in fee-based transactions.
The increase was primarily due to originations of $74.0 million and a loan transferred from loans held-for-investment of $676 thousand, partially offset by sales of $71.7 million and pay-downs and pay-offs of $1.8 million. 60 Deposits The Bank gathers deposits primarily through its branch locations.
The increase was primarily due to originations of $92.2 million, partially offset by sales of $85.8 million and pay-downs and pay-offs of $643 thousand. 61 Deposits The Bank gathers deposits primarily through its branch locations. The Bank offers a variety of deposit products including demand deposits accounts, NOW and money market accounts, savings accounts and time deposits.
The following table presents a summary of the Company’s deposits as of the dates indicated: December 31, Amount Change Percentage Change ($ in thousands) 2024 2023 Noninterest-bearing demand deposits $ 547,853 $ 594,673 $ (46,820) (7.9) % Interest-bearing deposits: Savings 5,765 6,846 (1,081) (15.8) % NOW 13,761 16,825 (3,064) (18.2) % Retail money market accounts 447,360 397,531 49,829 12.5 % Brokered money market accounts 1 1 — — % Retail time deposits of: $250,000 or less 493,644 456,293 37,351 8.2 % More than $250,000 605,124 515,702 89,422 17.3 % Brokered time deposits 442,283 303,741 138,542 45.6 % Time deposits from California State Treasurer 60,000 60,000 — — % Total interest-bearing deposits 2,067,938 1,756,939 310,999 17.7 % Total deposits $ 2,615,791 $ 2,351,612 $ 264,179 11.2 % Total deposits not covered by deposit insurance $ 1,036,451 $ 954,591 $ 81,860 8.6 % Time deposits not covered by deposit insurance $ 459,835 $ 408,637 $ 51,198 12.5 % The decrease in noninterest-bearing demand deposits was primarily due to strong deposit market competition and the migration of noninterest-bearing demand deposits to interest-bearing deposits attributable to the competitive market rates.
The following table presents a summary of the Company’s deposits as of the dates indicated: December 31, Amount Change Percentage Change ($ in thousands) 2025 2024 Noninterest-bearing demand deposits $ 555,645 $ 547,853 $ 7,792 1.4 % Interest-bearing deposits: Savings 6,077 5,765 312 5.4 % NOW 13,928 13,761 167 1.2 % Retail money market accounts 656,069 447,360 208,709 46.7 % Brokered money market accounts 1 1 — — % Retail time deposits of: $250,000 or less 574,519 493,644 80,875 16.4 % More than $250,000 648,633 605,124 43,509 7.2 % Brokered time deposits 280,540 442,283 (161,743) (36.6) % Time deposits from California State Treasurer 60,000 60,000 — — % Total interest-bearing deposits 2,239,767 2,067,938 171,829 8.3 % Total deposits $ 2,795,412 $ 2,615,791 $ 179,621 6.9 % Total deposits not covered by deposit insurance $ 1,270,159 $ 1,036,451 $ 233,708 22.5 % Time deposits not covered by deposit insurance $ 499,745 $ 459,835 $ 39,910 8.7 % The increase in retail time deposits was primarily due to new accounts of $367.4 million, renewals of the matured accounts of $898.6 million and balance increases of $44.1 million, partially offset by matured and closed accounts of $1.18 billion.
Overall changes in macroeconomic projections resulted the decreases of PD and LGD rates across majority of the loan segments leading to lower overall expected loss measurements. Loans individually evaluated for impairment totaled $52.0 million and $40.3 million, respectively, and related reserve totaled $59 thousand and $264 thousand, respectively, at December 31, 2024 and 2023.
Overall changes in macroeconomic projections resulted in the increases of PD and LGD rates across majority of the loan segments leading to higher overall expected loss measurements.
However, the Company does not currently meet any of the Threshold Conditions necessary to exercise the purchase option, and there can be no assurance if and when the Threshold Conditions will be met. 63 Liquidity Liquidity refers to the measure of ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting operating, capital and strategic cash flow needs, all at a reasonable cost.
The earliest possible date by which a Threshold Condition may be met is June 30, 2026. However, the Company does not currently meet any of the Threshold Conditions necessary to exercise the purchase option, and there can be no assurance whether and when the Threshold Conditions will be met.
The increase in average yield was primarily due to the rising market rates, partially offset by a decrease in net amortization of deferred fees on SBA PPP loans. Interest on investment securities increased primarily due to a 114 basis point increase in average yield and a 6.1% increase in average balance.
The decrease in average yield was primarily due to the lower market rates. Interest on investment securities increased primarily due to a 5.0% increase in average balance and a 17 basis point increase in average yield. The Company purchased $31.7 million and $23.5 million, respectively, of investment securities during the years ended December 31, 2025 and 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+3 added−3 removed18 unchanged
Biggest changeThe model is updated annually and was last evaluated during the three months ended September 30, 2024. 66 The following table presents the projected changes in NII at Risk and EVE that would occur upon an immediate change in interest rates based on independent analysis, but without giving effect to any steps that management might take to counteract that change as of the dates indicated: December 31, 2024 2023 Simulated Rate Changes Net Interest Income Sensitivity Economic Value of Equity Sensitivity Net Interest Income Sensitivity Economic Value of Equity Sensitivity +200 9.5 % (4.1) % 7.0 % (6.8) % +100 4.7 % (1.9) % 3.6 % (3.1) % -100 (6.2) % (1.1) % (4.3) % 1.8 % -200 (12.8) % (4.5) % (9.4) % — % On December 18, 2024, the FOMC lowered the upper range of the Fed Funds Target Rate from 4.75% to 4.50%.
Biggest changeThe model is updated annually and was last evaluated during the three months ended December 31, 2025. 67 The following table presents the projected changes in NII at Risk and EVE that would occur upon an immediate change in interest rates based on independent analysis, but without giving effect to any steps that management might take to counteract that change as of the dates indicated: December 31, 2025 2024 Simulated Rate Changes Net Interest Income Sensitivity Economic Value of Equity Sensitivity Net Interest Income Sensitivity Economic Value of Equity Sensitivity +200 8.7 % (3.8) % 9.5 % (4.1) % +100 4.5 % (1.3) % 4.7 % (1.9) % -100 (5.7) % (2.7) % (6.2) % (1.1) % -200 (10.8) % (6.1) % (12.8) % (4.5) % On December 10, 2025, the FOMC lowered the upper range of the Fed Funds Target Rate from 4.00% to 3.75%.
The Company’s EVE sensitivity reflects a slight liability sensitive profile due to the continuing deposit mix shift from non-maturity deposits to time deposits. The model result is highly sensitive to deposit behaviors as well as loan prepayment assumptions.
The Company’s EVE sensitivity reflects a slight liability sensitive profile due to the deposit mix shift away from non-maturity deposits to time deposits. The model result is highly sensitive to deposit behaviors as well as loan prepayment assumptions.
Due to the uncertainty of the current economic forecast, and timing and direction of future interest rate movements, actual results may vary from the Company’s EVE sensitivity results. 67
Due to the uncertainty of the current economic forecast, and timing and direction of future interest rate movements, actual results may vary from the Company’s EVE sensitivity results. 68
Removed
In the accompanying statement, they maintained their previous assessment that labor market conditions have generally eased while unemployment rate has moved up but remains low. They noted that inflation has made further progress towards the Committee’s 2 percent inflation objective but remain “somewhat elevated”.
Added
In the accompanying statement, noted economic activity has been expanding at a moderate pace but highlighted that unemployment rate has edged up through September. Inflation has moved up since earlier in the year and remained somewhat elevated.
Removed
They added that, “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook.
Added
The Committee reiterated that they remain attentive to the risks to both sides of its dual mandate but judged that downside risks to employment rose in recent months.
Removed
The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.” As of December 31, 2024, the Company’s net interest income sensitivity results exhibit an asset sensitive profile.
Added
In considering the extent and timing of additional adjustments to the target range of the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. As of December 31, 2025, the Company’s net interest income sensitivity results exhibit an asset sensitive profile.

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