PCB 10-Q Quarterly Report Sept. 30, 2025

PCB BANCORP

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pcb-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38621

PCB BANCORP

(Exact name of registrant as specified in its charter)


California			20-8856755
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

3701 Wilshire Boulevard , Suite 900 , Los Angeles , California 90010

(Address of principal executive offices) (Zip Code)

( 213 ) 210-2000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	PCB	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

As of October 31, 2025, the registrant had outstanding 14,260,754 shares of common stock.

PCB Bancorp and Subsidiary

Quarterly Report on Form 10-Q

September 30, 2025

Table of Contents


Part I - Financial Information

Item 1.	Consolidated Financial Statements	5

	Consolidated Balance Sheets - September 30, 2025 (Unaudited) and December 31, 2024	5
	Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2025 and 2024	6
	Consolidated Statements of Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2025 and 2024	7
	Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - Three and Nine Months Ended September 30, 2025 and 2024	8
	Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2025 and 2024	10
	Notes to Consolidated Financial Statements (Unaudited)	12

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	69

Item 4.	Controls and Procedures	71

Part II - Other Information

Item 1.	Legal Proceedings	72

Item 1A.	Risk Factors	72

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73

Item 3.	Defaults Upon Senior Securities	73

Item 4.	Mine Safety Disclosures	73

Item 5.	Other Information	73

Item 6.	Exhibits	74

Signatures		75

Forward-looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements reflect current views of PCB Bancorp (collectively, with its consolidated subsidiary, the “Company,” “we,” “us” or “our”) with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” and “annualized” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our business and industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including those factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or the following:

• business and economic conditions, particularly those affecting the financial services industry and our primary market areas and arising from recent inflationary pressures and governmental and societal responses thereto;

• our ability to successfully manage our credit risk and the sufficiency of our allowance for credit loss;

• factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance;

• governmental monetary and fiscal policies, and changes in market interest rates;

• the current inflationary environment and government and regulatory responses thereto;

• adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks and may affect our customers’ behavior and our stock price;

• a significant portion of our loan portfolio that is comprised of real estate loans;

• our ability to attract and retain Korean-American customers;

• our ability to identify and address cyber-security risks, fraud and systems errors;

• our ability to effectively execute our strategic plan and manage our growth;

• changes in our senior management team and our ability to attract, motivate and retain qualified personnel;

• cyber-attacks, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;

• liquidity issues, including fluctuations in the fair value and liquidity of the securities we hold and our ability to raise additional capital, if necessary;

• costs and obligations associated with operating as a public company;

• effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

• the effects of severe weather, natural disasters, acts of war or terrorism, health epidemics or pandemics (or expectations about them) and other external events on our business;

• the effects of sanctions, tariffs and other trade policies of the United States and its global trading partners and trade tensions related to the same;

• the impact of any claims or legal actions to which we may be subject, including any effect on our reputation;

• the effectiveness of our internal control over financial reporting and our ability to remediate any weakness in our internal control over financial reporting;

• our ability to satisfy the lending and other conditions necessary to repurchase our Series C Preferred Stock under our Option Agreement with the U.S. Treasury and to qualify to pay a lower rate of dividends on such preferred stock; and

• changes in federal tax laws or policies.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements and the risks described under “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, in “Part II, Item 1A - Risk Factors” of this Quarterly Report on Form 10-Q and in other documents that we file with the Securities and Exchange Commission (“SEC”). Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward looking statements in this report. In addition, our past results of operations are not necessarily indicative of our future results. You should not rely on any forward looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. Any forward-looking statement speaks only as of the date on which it is initially made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Part I - Financial Information

Item 1 - Consolidated Financial Statements

PCB Bancorp and Subsidiary

Consolidated Balance Sheets

($ in thousands, except share data)


	September 30, 2025		December 31, 2024
	(Unaudited)
Assets
Cash and due from banks	$	24,366	$	27,100
Interest-bearing deposits in other financial institutions	345,132		171,692
Total cash and cash equivalents	369,498		198,792
Securities available-for-sale, at fair value (amortized cost of $ 158,083 and $ 159,742 , respectively, and allowance for credit losses of $ 0 and $ 0 , respectively, at September 30, 2025 and December 31, 2024)	150,279		146,349
Loans held-for-sale, at lower of cost or fair value	9,634		6,292
Loans held-for-investment, net of deferred fees and costs	2,752,514		2,629,387
Allowance for credit losses on loans	( 32,960 )		( 30,628 )
Net loans held-for-investment	2,719,554		2,598,759
Premises and equipment, net	8,604		8,280
Federal Home Loan Bank and other restricted stock, at cost	14,978		14,042

Bank-owned life insurance	32,525		31,766
Deferred tax assets, net	7,164		7,249
Servicing assets	5,883		5,837
Operating lease assets	17,136		17,254
Accrued interest receivable	10,829		10,466
Other assets	17,422		18,885
Total assets	$	3,363,506	$	3,063,971
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	551,312	$	547,853
Savings, NOW and money market accounts	669,374		466,887
Time deposits of $250,000 or less	961,299		935,927
Time deposits of more than $250,000	731,517		665,124
Total deposits	2,913,502		2,615,791
Other short-term borrowings	—		15,000


Operating lease liabilities	18,961		18,671
Accrued interest payable and other liabilities	46,542		50,695
Total liabilities	2,979,005		2,700,157
Commitments and contingencies
Preferred stock, 10,000,000 shares authorized, no par value:
Series C, senior non-cumulative perpetual, $ 1,000 per share liquidation preference, 69,141 and 69,141 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively	69,141		69,141
Common stock, 60,000,000 shares authorized, no par value; 14,277,164 and 14,380,651 shares issued and outstanding, respectively, and included 116,900 and 119,100 shares of unvested restricted stock, respectively, at September 30, 2025 and December 31, 2024	140,580		143,195
Retained earnings	180,189		160,797
Accumulated other comprehensive loss, net	( 5,409 )		( 9,319 )
Total shareholders’ equity	384,501		363,814
Total liabilities and shareholders’ equity	$	3,363,506	$	3,063,971

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Income (Unaudited)

($ in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Interest and dividend income:
Loans, including fees	$	46,193	$	42,115	$	134,697	$	121,992
Tax-exempt investment securities	22		24		65		81
Taxable investment securities	1,452		1,360		4,279		3,859
Other interest-earning assets	3,804		2,499		8,630		8,566
Total interest income	51,471		45,998		147,671		134,498
Interest expense:
Deposits	23,995		23,057		69,064		67,560
Borrowings	498		222		1,356		1,485
Total interest expense	24,493		23,279		70,420		69,045
Net interest income	26,978		22,719		77,251		65,453
Provision (reversal) for credit losses	( 381 )		50		3,004		1,399
Net interest income after provision (reversal) for credit losses	27,359		22,669		74,247		64,054
Noninterest income:
Service charges and fees on deposits	377		399		1,124		1,141
Loan servicing income	719		786		2,204		2,504
Bank-owned life insurance income	259		239		759		703
Gain on sale of loans	1,617		750		3,969		2,591

Other income	442		446		1,235		1,111
Total noninterest income	3,414		2,620		9,291		8,050
Noninterest expense:
Salaries and employee benefits	9,293		8,801		27,212		27,244
Occupancy and equipment	2,372		2,261		7,040		6,919
Professional fees	541		599		1,974		2,656
Marketing and business promotion	669		667		1,509		1,304
Data processing	333		397		983		1,294
Director fees and expenses	223		226		674		679
Regulatory assessments	373		309		1,075		934
Other expense	1,065		1,342		3,705		5,099
Total noninterest expense	14,869		14,602		44,172		46,129
Income before income taxes	15,904		10,687		39,366		25,975
Income tax expense	4,492		2,873		11,148		7,195
Net income	11,412		7,814		28,218		18,780
Preferred stock dividends	86		346		213		488
Net income available to common shareholders	$	11,326	$	7,468	$	28,005	$	18,292

Earnings per common share, basic	$	0.79	$	0.52	$	1.95	$	1.28
Earnings per common share, diluted	$	0.78	$	0.52	$	1.94	$	1.27

Weighted-average common shares outstanding, basic	14,201,054		14,241,014		14,228,524		14,237,851
Weighted-average common shares outstanding, diluted	14,325,956		14,356,384		14,354,284		14,328,510

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Comprehensive Income (Unaudited)

($ in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income	$	11,412	$	7,814	$	28,218	$	18,780
Other comprehensive income:
Unrealized gain on securities available-for-sale arising during the period	1,573		5,256		5,589		3,527
Income tax expense related to items of other comprehensive income	( 454 )		( 1,552 )		( 1,679 )		( 1,050 )
Total other comprehensive income, net of tax	1,119		3,704		3,910		2,477
Total comprehensive income	$	12,531	$	11,518	$	32,128	$	21,257

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

($ in thousands, except share and per share data)


	Three Months Ended
	Shares Outstanding		Shareholders’ Equity
	Preferred Stock	Common Stock	Preferred Stock		Common Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at July 1, 2024	69,141	14,254,024	$	69,141	$	142,698	$	151,781	$	( 10,151 )	$	353,469
Comprehensive income
Net income	—	—	—		—		7,814		—		7,814
Other comprehensive income, net of tax	—	—	—		—		—		3,704		3,704


Issuance of restricted stock	—	1,500	—		—		—		—		—

Restricted stock surrendered due to employee tax liability	—	( 150 )	—		( 3 )		—		—		( 3 )

Share-based compensation expense	—	—	—		113		—		—		113
Stock options exercised	—	11,351	—		118		—		—		118
Preferred stock dividends	—	—	—		—		( 346 )		—		( 346 )
Cash dividends declared on common stock ($ 0.18 per share)	—	—	—		—		( 2,569 )		—		( 2,569 )
Balance at September 30, 2024	69,141	14,266,725	$	69,141	$	142,926	$	156,680	$	( 6,447 )	$	362,300

Balance at July 1, 2025	69,141	14,336,602	$	69,141	$	142,152	$	171,735	$	( 6,528 )	$	376,500
Comprehensive income
Net income	—	—	—		—		11,412		—		11,412
Other comprehensive income, net of tax	—	—	—		—		—		1,119		1,119



Issuance of restricted stock	—	6,200	—		—		—		—		—
Forfeiture of restricted stock	—	( 1,200 )	—		—		—		—		—
Restricted stock surrendered due to employee tax liability	—	( 300 )	—		( 7 )		—		—		( 7 )
Repurchase of common stock	—	( 106,463 )	—		( 2,242 )		—		—		( 2,242 )
Share-based compensation expense	—	—	—		227		—		—		227
Stock options exercised	—	42,325	—		450		—		—		450
Preferred stock dividends	—	—	—		—		( 86 )		—		( 86 )
Cash dividends declared on common stock ($ 0.20 per share)	—	—	—		—		( 2,872 )		—		( 2,872 )
Balance at September 30, 2025	69,141	14,277,164	$	69,141	$	140,580	$	180,189	$	( 5,409 )	$	384,501

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Changes in Shareholders’ Equity, Continued (Unaudited)

($ in thousands, except share and per share data)


	Nine Months Ended
	Shares Outstanding		Shareholders’ Equity
	Preferred Stock	Common Stock	Preferred Stock		Common Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at January 1, 2024	69,141	14,260,440	$	69,141	$	142,563	$	146,092	$	( 8,924 )	$	348,872
Comprehensive income (loss)
Net income	—	—	—		—		18,780		—		18,780
Other comprehensive loss, net of tax	—	—	—		—		—		2,477		2,477


Issuance of restricted stock	—	1,500	—		—		—		—		—
Forfeiture of restricted stock	—	( 420 )	—		—		—		—		—
Restricted stock surrendered due to employee tax liability	—	( 150 )	—		( 3 )		—		—		( 3 )
Repurchase of common stock	—	( 14,947 )	—		( 222 )		—		—		( 222 )
Share-based compensation expense	—	—	—		378		—		—		378
Stock options exercised	—	20,302	—		210		—		—		210
Preferred stock dividends	—	—	—		—		( 488 )		—		( 488 )
Cash dividends declared on common stock ($ 0.54 per share)	—	—	—		—		( 7,704 )		—		( 7,704 )
Balance at September 30, 2024	69,141	14,266,725	$	69,141	$	142,926	$	156,680	$	( 6,447 )	$	362,300

Balance at January 1, 2025	69,141	14,380,651	$	69,141	$	143,195	$	160,797	$	( 9,319 )	$	363,814
Comprehensive income
Net income	—	—	—		—		28,218		—		28,218
Other comprehensive income, net of tax	—	—	—		—		—		3,910		3,910



Issuance of restricted stock	—	6,200	—		—		—		—		—
Forfeiture of restricted stock	—	( 1,200 )	—		—		—		—		—
Restricted stock surrendered due to employee tax liability	—	( 300 )	—		( 7 )		—		—		( 7 )
Repurchase of common stock	—	( 255,767 )	—		( 4,965 )		—		—		( 4,965 )
Share-based compensation expense	—	—	—		689		—		—		689
Stock options exercised	—	147,580	—		1,668		—		—		1,668
Preferred stock dividends	—	—	—		—		( 213 )		—		( 213 )
Cash dividends declared on common stock ($ 0.60 per share)	—	—	—		—		( 8,613 )		—		( 8,613 )
Balance at September 30, 2025	69,141	14,277,164	$	69,141	$	140,580	$	180,189	$	( 5,409 )	$	384,501

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)

($ in thousands)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities
Net income	$	28,218	$	18,780
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment	1,677		1,677
Net amortization of premiums on securities	108		123
Net accretion of discounts on loans	( 2,045 )		( 2,137 )
Net accretion of deferred loan fees	( 1,113 )		( 919 )
Amortization of servicing assets	1,567		1,372
Provision for credit losses	3,004		1,399
Bank-owned life insurance income	( 759 )		( 703 )
Deferred tax benefit	( 1,594 )		( 459 )
Stock-based compensation	689		378

Gain on sale of loans	( 3,969 )		( 2,591 )
Originations of loans held-for-sale	( 76,159 )		( 48,328 )
Proceeds from sales of and principal collected on loans held-for-sale	76,692		51,761
Change in accrued interest receivable and other assets	1,491		( 3,409 )
Change in accrued interest payable and other liabilities	( 4,144 )		17,818
Net cash provided by operating activities	23,663		34,762
Cash flows from investing activities
Purchase of securities available-for-sale	( 14,855 )		( 14,774 )

Proceeds from maturities and paydowns of securities available-for-sale	16,406		13,866
Proceeds from principal collected on loans held-for-sale previously classified as held-for-investment	—		676
Net change in loans held-for-investment	( 122,040 )		( 141,948 )

Purchase of Federal Home Loan Bank stock	( 936 )		( 1,326 )
Proceeds from sale of other real estate owned	—		2,571
Purchases of premises and equipment	( 2,067 )		( 4,029 )

Net cash used in investing activities	( 123,492 )		( 144,964 )
Cash flows from financing activities
Net change in deposits	297,711		108,070
Net change in short-term Federal Home Loan Bank advances and other borrowings	( 15,000 )		—
Proceeds from long-term Federal Home Loan Bank advances	—		50,000
Repayment of long-term Federal Home Loan Bank advances	—		( 89,000 )
Stock options exercised	1,668		210
Restricted stock surrendered due to employee tax liability	( 7 )		( 3 )



Repurchase of common stock	( 4,965 )		( 222 )
Cash dividends paid on preferred stock	( 259 )		( 427 )
Cash dividends paid on common stock	( 8,613 )		( 7,704 )
Net cash provided by financing activities	270,535		60,924
Net increase (decrease) in cash and cash equivalents	170,706		( 49,278 )
Cash and cash equivalents at beginning of period	198,792		242,342
Cash and cash equivalents at end of period	$	369,498	$	193,064

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Consolidated Statements of Cash Flows, Continued (Unaudited)

($ in thousands)


	Nine Months Ended September 30,
	2025		2024
Supplemental disclosures of cash flow information:
Interest paid	$	64,957	$	59,112
Income taxes paid	19,133		4,187
Supplemental disclosures of non-cash investment activities:
Loans transferred to loans held-for-sale	$	—	$	676
Loans transferred to other real estate owned	—		94
Right of use assets obtained in exchange for lease obligations	2,223		973

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

PCB Bancorp and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Note 1 - Basis of Presentation and Significant Accounting Policies

Nature of Operations

PCB Bancorp is a bank holding company whose subsidiary is PCB Bank (the “Bank”), which is a single operating segment. As of September 30, 2025, the Bank operated 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), one full-service branch in Georgia (Suwanee), and three loan production offices (“LPOs”) in Los Angeles and Orange Counties, California; and Bellevue, Washington. The Bank offers a broad range of loans, deposits, and other products and services predominantly to small and middle market businesses and individuals.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to Article 10 of SEC Regulation S-X and other SEC rules and regulations for reporting on the Quarterly Report on Form 10-Q. Accordingly, certain disclosures required by U.S. generally accepted accounting principles (“GAAP”) are not included herein. These interim statements should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed by the Company with the SEC. The December 31, 2024 balance sheet presented herein has been derived from the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC, but does not include all of the disclosures required by GAAP for complete financial statements.

In the opinion of management of the Company, the accompanying unaudited interim consolidated financial statements reflect all of the adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial condition and consolidated results of operations as of the dates and for the periods presented. Certain reclassifications have been made in the prior period financial statements to conform to the current period presentation. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Principles of Consolidation

The consolidated financial statements include the accounts of PCB Bancorp and its wholly owned subsidiary as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025 and 2024. Significant inter-company accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, all references to the Company include its wholly owned subsidiary.

Significant Accounting Policies

The accounting and reporting policies of the Company are based upon GAAP and conform to predominant practices within the banking industry. Other than as disclosed below, the Company has not made any significant changes in its critical accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.

Use of Estimates in the Preparation of Financial Statements

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates are subject to change and such change could have a material effect on the consolidated financial statements. Actual results may differ from those estimates.

Adopted Accounting Pronouncements

During the nine months ended September 30, 2025, there were no significant accounting pronouncements applicable to the Company that were adopted or became effective.

Recent Accounting Pronouncements Not Yet Adopted

The following recently issued accounting pronouncement applicable to the Company has not yet been adopted:

In December 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU requires public business entities to disclose in the rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. It also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for periods for which financial statements have not yet been issued. This ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires disaggregated disclosure of income statement expenses for public business entities. This ASU requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within fiscal years beginning after December 15, 2027. The guidance can be applied prospectively with an option for retrospective application and early adoption is permitted. This ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.

Note 2 - Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (i.e. an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are defined as follows:

• Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

• Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair value is measured on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate certain assets or liabilities for impairment or for disclosure purposes. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records securities available-for-sale at fair value on a recurring basis. Certain other assets, such as loans held-for-sale, loans individually evaluated, servicing assets and other real estate owned (“OREO”) are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value:

Investment securities : The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1) or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2). Management reviews the valuation techniques and assumptions used by the provider and determines that the provider uses widely accepted valuation techniques based on observable market inputs appropriate for the type of security being measured. Securities held-to-maturity are not measured at fair value on a recurring basis.

Loans held-for-sale : The Company records SBA loans held-for-sale, residential property loans held-for-sale and certain non-residential real estate loans held-for-sale at the lower of cost or fair value, on an aggregate basis. The Company obtains fair values from a third party independent valuation service provider. Loans held-for-sale accounted for at the lower of cost or fair value are considered to be recognized at fair value when they are recorded at below cost, on an aggregate basis, and are classified as Level 2.

Loans individually evaluated : Certain collateral-dependent loans individually evaluated are recognized at fair value when they reflect partial write-downs, through charge-offs or specific reserve allowances, that are based on the current appraised or market-quoted value of the underlying collateral. In some cases, the properties for which market quotes or appraised values have been obtained are located in areas where comparable sales data is limited, outdated, or unavailable. Fair value estimates for collateral-dependent loans individually evaluated are obtained from real estate brokers or other third-party consultants, and are classified as Level 3.

Other real estate owned : The Company initially records OREO at fair value at the time of foreclosure. Thereafter, OREO is recorded at the lower of cost or fair value based on their subsequent changes in fair value. The fair value of OREO is generally based on recent real estate appraisals adjusted for estimated selling costs. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and result in a Level 3 classification due to the unobservable inputs used for determining fair value. Only OREO with a valuation allowance are considered to be carried at fair value.

Servicing Assets: Servicing assets represent the value associated with servicing loans that have been sold. The fair value for servicing assets is determined through discounted cash flow analysis and utilizes discount rates and prepayment speed assumptions as inputs. All of these assumptions require a significant degree of management estimation and judgment. The fair market valuation is performed on a quarterly basis for servicing assets. Servicing assets are accounted for at the lower of cost or market value and considered to be recognized at fair value when they are recorded at below cost and are classified as Level 3.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of dates indicated:


	Fair Value Measurement Level
($ in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 30, 2025
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	—	$	119,320	$	—	$	119,320
Residential collateralized mortgage obligations	—		19,263		—		19,263
SBA loan pool securities	—		4,428		—		4,428
Municipal bonds	—		2,467		—		2,467
Corporate bonds	—		4,801		—		4,801
Total securities available-for-sale	—		150,279		—		150,279
Total assets measured at fair value on a recurring basis	$	—	$	150,279	$	—	$	150,279
Total liabilities measured at fair value on a recurring basis	$	—	$	—	$	—	$	—
December 31, 2024
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	—	$	112,439	$	—	$	112,439
Residential collateralized mortgage obligations	—		21,237		—		21,237
SBA loan pool securities	—		6,008		—		6,008
Municipal bonds	—		2,420		—		2,420
Corporate bonds	—		4,245		—		4,245
Total securities available-for-sale	—		146,349		—		146,349
Total assets measured at fair value on a recurring basis	$	—	$	146,349	$	—	$	146,349
Total liabilities measured at fair value on a recurring basis	$	—	$	—	$	—	$	—

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents the Company’s assets and liabilities measured at fair value on a non-recurring basis as of dates indicated:


	Fair Value Measurement Level
($ in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 30, 2025
Loans individually evaluated:
Business property	$	—	$	—	$	325	$	325


Total loans individually evaluated	—		—		325		325


Total assets measured at fair value on a non-recurring basis	$	—	$	—	$	325	$	325
Total liabilities measured at fair value on a non-recurring basis	$	—	$	—	$	—	$	—
December 31, 2024
Loans individually evaluated:
Business property	$	—	$	—	$	994	$	994


Total loans individually evaluated	—		—		994		994
Total assets measured at fair value on a non-recurring basis	$	—	$	—	$	994	$	994
Total liabilities measured at fair value on a non-recurring basis	$	—	$	—	$	—	$	—

The following table presents quantitative information about level 3 fair value measurements for assets measured at fair value on a non-recurring basis as of the date indicated:

($ in thousands)

Fair Value

Valuation Technique(s)

Unobservable Input(s)

Weighted-Average

September 30, 2025

Loans individually evaluated:

Business property

325

Fair value of collateral

Selling cost

6 %

December 31, 2024

Loans individually evaluated:

Business property

994

Fair value of collateral

Selling Cost

6 %

The following table presents gains or losses, including charge-offs, recoveries, and specific reserves recorded, for assets measured at fair value for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Loans individually evaluated:

Business property	$	( 6 )	$	3	$	( 132 )	$	47
Commercial and industrial	—		( 1 )		( 37 )		31




Net gains recognized	$	( 6 )	$	2	$	( 169 )	$	78

Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair values of financial assets and liabilities as of the dates indicated:


	Carrying Value		Fair Value		Fair Value Measurements
($ in thousands)					Level 1		Level 2		Level 3
September 30, 2025
Financial assets:
Interest-bearing deposits in other financial institutions	$	345,132	$	345,132	$	345,132	$	—	$	—
Securities available-for-sale	150,279		150,279		—		150,279		—
Loans held-for-sale	9,634		10,256		—		10,256		—
Net loans held-for-investment	2,719,554		2,709,523		—		—		2,709,523
Federal Home Loan Bank (“FHLB”) and other restricted stock	14,978		N/A		N/A		N/A		N/A
Accrued interest receivable	10,829		10,829		523		515		9,791
Financial liabilities:
Deposits	$	2,913,502	$	2,924,651	$	—	$	—	$	2,924,651


Accrued interest payable	29,870		29,870		—		—		29,870
December 31, 2024
Financial assets:
Interest-bearing deposits in other financial institutions	$	171,692	$	171,692	$	171,692	$	—	$	—
Securities available-for-sale	146,349		146,349		—		146,349		—
Loans held-for-sale	6,292		6,783		—		6,783		—
Net loans held-for-investment	2,598,759		2,593,839		—		—		2,593,839
FHLB and other restricted stock	14,042		N/A		N/A		N/A		N/A
Accrued interest receivable	10,466		10,466		139		548		9,779
Financial liabilities:
Deposits	$	2,615,791	$	2,620,750	$	—	$	—	$	2,620,750
Other short-term borrowings	15,000		15,000		—		15,000		—

Accrued interest payable	24,407		24,407		—		2		24,405

Note 3 - Investment Securities

The following table presents the amortized cost and fair value of the securities available-for-sale as of the dates indicated:


($ in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
September 30, 2025
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	125,921	$	884	$	( 7,485 )	$	119,320
Residential collateralized mortgage obligations	20,071		65		( 873 )		19,263
SBA loan pool securities	4,631		—		( 203 )		4,428
Municipal bonds	2,460		8		( 1 )		2,467
Corporate bonds	5,000		—		( 199 )		4,801
Total securities available-for-sale	$	158,083	$	957	$	( 8,761 )	$	150,279
December 31, 2024
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	123,209	$	168	$	( 10,938 )	$	112,439
Residential collateralized mortgage obligations	22,753		1		( 1,517 )		21,237
SBA loan pool securities	6,328		—		( 320 )		6,008
Municipal bonds	2,452		—		( 32 )		2,420
Corporate bonds	5,000		—		( 755 )		4,245
Total securities available-for-sale	$	159,742	$	169	$	( 13,562 )	$	146,349

As of September 30, 2025 and December 31, 2024, pledged securities were $ 74.8 million and $ 72.5 million, respectively. These securities were pledged as collateral securing deposits from the California State Treasurer.

The Company elected to exclude accrued interest receivable from the amortized cost of its securities available-for-sale. Accrued interest receivable on securities available-for-sale totaled $ 515 thousand and $ 548 thousand at September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, there were no holdings of securities available-for-sale of any one issuer, other than U.S. government agencies and U.S. government sponsored enterprise securities, in an amount greater than 10% of shareholders’ equity.

The following table presents the amortized cost and fair value of the securities available-for-sale by contractual maturity as of the date indicated. Expected maturities may differ from contractual maturities, if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	September 30, 2025
($ in thousands)	Amortized Cost		Fair Value
Within one year	$	—	$	—
One to five years	83		83
Five to ten years	6,501		6,310
Greater than ten years	876		875
Residential mortgage-backed securities, residential collateralized mortgage obligations and SBA loan pool securities	150,623		143,011
Total	$	158,083	$	150,279

The Company had no proceeds from sales and calls of securities available-for-sale for the three and nine months ended September 30, 2025 or 2024.

The following table presents the investment securities with unrealized losses by security type and length of time in a continuous unrealized loss position for which an allowance for credit losses (“ACL”) was not recorded as of the dates indicated:


	Length of Time that Individual Securities Have Been In a Continuous Unrealized Loss Position
	Less Than 12 Months					12 Months or Longer					Total
($ in thousands)	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities
September 30, 2025
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	—	$	—	—	$	65,031	$	( 7,485 )	112	$	65,031	$	( 7,485 )	112
Residential collateralized mortgage obligations	3,130		( 7 )		3	12,512		( 866 )		34	15,642		( 873 )		37
SBA loan pool securities	360		( 1 )		4	4,068		( 202 )		12	4,428		( 203 )		16
Municipal bonds	83		—		1	415		( 1 )		1	498		( 1 )		2
Corporate bonds	—		—		—	4,801		( 199 )		1	4,801		( 199 )		1
Total securities available-for-sale	$	3,573	$	( 8 )	8	$	86,827	$	( 8,753 )	160	$	90,400	$	( 8,761 )	168
December 31, 2024
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	26,250	$	( 392 )	17	$	67,640	$	( 10,546 )	109	$	93,890	$	( 10,938 )	126
Residential collateralized mortgage obligations	4,963		( 26 )		3	13,375		( 1,491 )		36	18,338		( 1,517 )		39
SBA loan pool securities	396		( 1 )		3	5,316		( 319 )		13	5,712		( 320 )		16
Municipal bonds	2,050		( 32 )		6	—		—		—	2,050		( 32 )		6
Corporate bonds	—		—		—	4,245		( 755 )		1	4,245		( 755 )		1
Total securities available-for-sale	$	33,659	$	( 451 )	29	$	90,576	$	( 13,111 )	159	$	124,235	$	( 13,562 )	188

As of September 30, 2025 and December 31, 2024, 95.3 % 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. 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 September 30, 2025 and December 31, 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 September 30, 2025 and December 31, 2024. These securities have fluctuated in value since their purchase dates as market interest rates fluctuated. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell before the recovery of its amortized cost basis. The Company therefore determined that the investment securities with unrealized losses did not warrant an ACL as of September 30, 2025 and December 31, 2024.

As of September 30, 2025 and December 31, 2024, the Company recorded no ACL on securities available-for-sale.

Note 4 - Loans and Allowance for Credit Losses on Loans

Loans Held-For-Investment

The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated.


($ in thousands)	September 30, 2025		December 31, 2024
Commercial real estate:
Commercial property	$	1,039,965	$	940,931
Business property	639,596		595,547
Multifamily	172,098		194,220
Construction	25,911		21,854
Total commercial real estate	1,877,570		1,752,552
Commercial and industrial	465,424		472,763
Consumer:
Residential mortgage	401,653		392,456
Other consumer	7,867		11,616
Total consumer	409,520		404,072
Loans held-for-investment	2,752,514		2,629,387
Allowance for credit losses on loans	( 32,960 )		( 30,628 )
Net loans held-for-investment	$	2,719,554	$	2,598,759

In the ordinary course of business, the Company may grant loans to certain of its officers and directors, and the companies with which they are associated. As of September 30, 2025 and December 31, 2024, the Company had no such loans outstanding.

Allowance for Credit Losses on Loans

The following table presents a composition of provision for credit losses for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Provision (reversal) for credit losses on loans	$	( 428 )	$	193	$	2,884	$	1,444
Provision (reversal) for credit losses on off-balance sheet credit exposures	47		( 143 )		120		( 45 )
Total provision (reversal) for credit losses	$	( 381 )	$	50	$	3,004	$	1,399

The following tables present the activities in ACL on loans for the periods indicated:


($ in thousands)	Commercial Property		Business Property		Multifamily		Construction		Commercial and Industrial		Residential Mortgage		Other Consumer		Total
Balance at July 1, 2025	$	10,756	$	5,206	$	2,993	$	79	$	11,215	$	3,264	$	41	$	33,554
Charge-offs	—		( 307 )		—		—		( 147 )		—		—		( 454 )
Recoveries	—		1		—		—		287		—		—		288
Provision (reversal) for credit losses on loans	( 128 )		460		( 1,488 )		80		883		( 250 )		15		( 428 )
Balance at September 30, 2025	$	10,628	$	5,360	$	1,505	$	159	$	12,238	$	3,014	$	56	$	32,960

Balance at July 1, 2024	$	11,900	$	4,848	$	1,661	$	131	$	7,186	$	2,957	$	64	$	28,747
Charge-offs	—		( 104 )		—		—		—		—		( 7 )		( 111 )
Recoveries	—		1		—		—		8		—		92		101
Provision (reversal) for credit losses on loans	( 1,515 )		779		( 14 )		( 38 )		1,056		6		( 81 )		193
Balance at September 30, 2024	$	10,385	$	5,524	$	1,647	$	93	$	8,250	$	2,963	$	68	$	28,930

($ in thousands)	Commercial Property		Business Property		Multifamily		Construction		Commercial and Industrial		Residential Mortgage		Other Consumer		Total
Balance at January 1, 2025	$	12,923	$	3,967	$	2,371	$	81	$	8,713	$	2,506	$	67	$	30,628
Charge-offs	—		( 307 )		—		—		( 544 )		—		( 76 )		( 927 )
Recoveries	—		3		—		—		367		—		5		375
Provision (reversal) for credit losses on loans	( 2,295 )		1,697		( 866 )		78		3,702		508		60		2,884
Balance at September 30, 2025	$	10,628	$	5,360	$	1,505	$	159	$	12,238	$	3,014	$	56	$	32,960

Balance at January 1, 2024	$	12,665	$	4,739	$	1,441	$	135	$	6,245	$	2,226	$	82	$	27,533
Charge-offs	—		( 104 )		—		—		( 155 )		—		( 37 )		( 296 )
Recoveries	—		3		—		—		87		—		159		249
Provision (reversal) for credit losses on loans	( 2,280 )		886		206		( 42 )		2,073		737		( 136 )		1,444
Balance at September 30, 2024	$	10,385	$	5,524	$	1,647	$	93	$	8,250	$	2,963	$	68	$	28,930

The decrease in overall ACL for the three months ended September 30, 2025 was primarily due to decreases in loans held-for-investment. The increase for the nine months ended September 30, 2025 was primarily due to increases in loans held-for-investment and quantitatively measured loss reserve requirement from the worsened year-over-year change in real GDP forecast and the increased unemployment rate forecast, partially offset by a decrease in qualitative adjustment factors.

Credit Quality Indicators

The Company classifies loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans in regards to credit risk. This analysis typically includes non-homogeneous loans, such as commercial property and commercial and industrial loans, and is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings:

Pass - Loans classified as pass include non-homogeneous loans not meeting the risk ratings defined below and smaller, homogeneous loans not assessed on an individual basis.

Special Mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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

The following table presents the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of September 30, 2025 and gross write offs for the nine months ended September 30, 2025. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from the Term Loans by Origination Year columns.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2025		2024		2023		2022		2021		Prior						Total
September 30, 2025
Commercial Real Estate:
Commercial property
Pass	$	207,514	$	191,411	$	141,636	$	244,202	$	118,421	$	116,990	$	13,738	$	2,138	$	1,036,050
Special mention	—		—		—		924		—		—		—		—		924
Substandard	—		—		120		367		238		2,266		—		—		2,991
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	207,514	$	191,411	$	141,756	$	245,493	$	118,659	$	119,256	$	13,738	$	2,138	$	1,039,965
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Business property
Pass	$	138,560	$	91,679	$	95,875	$	85,952	$	120,220	$	91,095	$	5,558	$	3,671	$	632,610
Special mention	—		—		—		—		5,553		—		—		—		5,553
Substandard	—		—		—		444		381		608		—		—		1,433
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	138,560	$	91,679	$	95,875	$	86,396	$	126,154	$	91,703	$	5,558	$	3,671	$	639,596
Year-to-date period gross write offs	$	—	$	—	$	—	$	307	$	—	$	—	$	—	$	—	$	307
Multifamily
Pass	$	30,853	$	30,527	$	13,886	$	38,781	$	37,333	$	19,718	$	1,000	$	—	$	172,098
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	30,853	$	30,527	$	13,886	$	38,781	$	37,333	$	19,718	$	1,000	$	—	$	172,098
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction
Pass	$	—	$	—	$	9,226	$	16,685	$	—	$	—	$	—	$	—	$	25,911
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	9,226	$	16,685	$	—	$	—	$	—	$	—	$	25,911
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2025		2024		2023		2022		2021		Prior						Total
September 30, 2025 (Continued)
Commercial and Industrial
Pass	$	25,585	$	37,323	$	29,090	$	17,057	$	5,533	$	6,962	$	326,801	$	16,695	$	465,046
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		208		—		—		170		—		—		378
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	25,585	$	37,323	$	29,298	$	17,057	$	5,533	$	7,132	$	326,801	$	16,695	$	465,424
Year-to-date period gross write offs	$	74	$	—	$	125	$	—	$	149	$	196	$	—	$	—	$	544
Consumer
Residential mortgage
Pass	$	48,626	$	33,551	$	57,822	$	140,290	$	68,039	$	47,955	$	—	$	—	$	396,283
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		4,726		—		—		644		—		—		5,370
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	48,626	$	33,551	$	62,548	$	140,290	$	68,039	$	48,599	$	—	$	—	$	401,653
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other consumer
Pass	$	121	$	—	$	2,064	$	2,445	$	627	$	72	$	2,538	$	—	$	7,867
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	121	$	—	$	2,064	$	2,445	$	627	$	72	$	2,538	$	—	$	7,867
Year-to-date period gross write offs	$	—	$	71	$	1	$	—	$	4	$	—	$	—	$	—	$	76
Total loans held-for-investment
Pass	$	451,259	$	384,491	$	349,599	$	545,412	$	350,173	$	282,792	$	349,635	$	22,504	$	2,735,865
Special mention	—		—		—		924		5,553		—		—		—		6,477
Substandard	—		—		5,054		811		619		3,688		—		—		10,172
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	451,259	$	384,491	$	354,653	$	547,147	$	356,345	$	286,480	$	349,635	$	22,504	$	2,752,514
Year-to-date period gross write offs	$	74	$	71	$	126	$	307	$	153	$	196	$	—	$	—	$	927

The following table presents the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2024. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2024		2023		2022		2021		2020		Prior						Total
December 31, 2024
Commercial Real Estate:
Commercial property
Pass	$	196,454	$	142,455	$	259,222	$	138,837	$	76,462	$	102,666	$	21,031	$	385	$	937,512
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		131		399		258		—		2,631		—		—		3,419
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	196,454	$	142,586	$	259,621	$	139,095	$	76,462	$	105,297	$	21,031	$	385	$	940,931
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Business property
Pass	$	93,973	$	100,337	$	95,024	$	148,382	$	44,239	$	95,372	$	6,431	$	3,750	$	587,508
Special mention	—		—		5,034		—		—		—		—		—		5,034
Substandard	—		—		447		859		—		1,699		—		—		3,005
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	93,973	$	100,337	$	100,505	$	149,241	$	44,239	$	97,071	$	6,431	$	3,750	$	595,547
Year-to-date period gross write offs	$	—	$	—	$	77	$	—	$	—	$	27	$	—	$	—	$	104
Multifamily
Pass	$	34,104	$	53,020	$	39,870	$	38,104	$	25,751	$	2,370	$	1,001	$	—	$	194,220
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	34,104	$	53,020	$	39,870	$	38,104	$	25,751	$	2,370	$	1,001	$	—	$	194,220
Year-to-date period gross write offs	$	—	$	—	$	—	$	20	$	—	$	—	$	—	$	—	$	20
Construction
Pass	$	886	$	7,589	$	13,379	$	—	$	—	$	—	$	—	$	—	$	21,854
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	886	$	7,589	$	13,379	$	—	$	—	$	—	$	—	$	—	$	21,854
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term
($ in thousands)	2024		2023		2022		2021		2020		Prior						Total
December 31, 2024 (Continued)
Commercial and Industrial
Pass	$	46,644	$	34,737	$	21,700	$	7,312	$	3,125	$	8,044	$	347,605	$	3,517	$	472,684
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		8		—		71		—		—		79
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	46,644	$	34,737	$	21,700	$	7,320	$	3,125	$	8,115	$	347,605	$	3,517	$	472,763
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	126	$	248	$	150	$	524
Consumer
Residential mortgage
Pass	$	37,548	$	73,833	$	151,922	$	73,183	$	10,840	$	44,727	$	—	$	—	$	392,053
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		403		—		—		403
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	37,548	$	73,833	$	151,922	$	73,183	$	10,840	$	45,130	$	—	$	—	$	392,456
Year-to-date period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other consumer
Pass	$	346	$	2,914	$	4,243	$	1,530	$	394	$	8	$	2,157	$	—	$	11,592
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		23		—		1		—		—		—		24
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	346	$	2,914	$	4,266	$	1,530	$	395	$	8	$	2,157	$	—	$	11,616
Year-to-date period gross write offs	$	—	$	18	$	15	$	—	$	10	$	—	$	—	$	—	$	43
Total loans held-for-investment
Pass	$	409,955	$	414,885	$	585,360	$	407,348	$	160,811	$	253,187	$	378,225	$	7,652	$	2,617,423
Special mention	—		—		5,034		—		—		—		—		—		5,034
Substandard	—		131		869		1,125		1		4,804		—		—		6,930
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	409,955	$	415,016	$	591,263	$	408,473	$	160,812	$	257,991	$	378,225	$	7,652	$	2,629,387
Year-to-date period gross write offs	$	—	$	18	$	92	$	20	$	10	$	153	$	248	$	150	$	691

Nonaccrual Loans

The following table presents the loans on nonaccrual status by loan segments as of the date indicated:


($ in thousands)	Total Nonaccrual Loans		Nonaccrual Loans with ACL		ACL on Nonaccrual Loans		Collateral Dependent Nonaccrual Loans		ACL on Collateral Dependent Nonaccrual Loans
September 30, 2025
Commercial real estate:
Commercial property	$	1,448	$	—	$	—	$	1,448	$	—
Business property	962		458		132		962		132


Total commercial real estate	2,410		458		132		2,410		132
Commercial and industrial	378		280		283		305		209
Consumer:
Residential mortgage	5,370		—		—		5,370		—

Total consumer	5,370		—		—		5,370		—
Total	$	8,158	$	738	$	415	$	8,085	$	341
December 31, 2024
Commercial real estate:
Commercial property	$	1,851	$	—	$	—	$	1,851	$	—
Business property	2,336		1,032		38		2,336		38


Total commercial real estate	4,187		1,032		38		4,187		38
Commercial and industrial	79		8		8		79		8
Consumer:
Residential mortgage	403		—		—		403		—
Other consumer	24		24		—		—		—
Total consumer	427		24		—		403		—
Total	$	4,693	$	1,064	$	46	$	4,669	$	46

There were no nonaccrual loans guaranteed by a U.S. government agency at September 30, 2025 and December 31, 2024.

Collateral Dependent Loans

Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the collateral dependent loans by loan segments as of the date indicated:


($ in thousands)	Hotel / Motel		Restaurant		Car Wash		Retail		Single Family Residential		Other		Total
September 30, 2025
Commercial real estate:
Commercial property	$	1,448	$	—	$	—	$	—	$	—	$	—	$	1,448
Business property	—		382		—		547		—		33		962


Total commercial real estate	1,448		382		—		547		—		33		2,410
Commercial and industrial	8		—		—		—		297		—		305
Consumer:
Residential mortgage	—		—		—		—		5,370		—		5,370

Total consumer	—		—		—		—		5,370		—		5,370
Total	$	1,456	$	382	$	—	$	547	$	5,667	$	33	$	8,085
December 31, 2024
Commercial real estate:
Commercial property	$	1,851	$	—	$	—	$	—	$	—	$	—	$	1,851
Business property	—		—		1,695		606		—		35		2,336


Total commercial real estate	1,851		—		1,695		606		—		35		4,187
Commercial and industrial	11		—		8		—		60		—		79
Consumer:
Residential mortgage	—		—		—		—		403		—		403

Total consumer	—		—		—		—		403		—		403
Total	$	1,862	$	—	$	1,703	$	606	$	463	$	35	$	4,669

Past Due Loans

The following table presents the aging of past due in accruing loans and nonaccrual loans by loan segments as of date indicated:


	Still Accruing								Nonaccrual
($ in thousands)	30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Total		30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Total		Total Loans Past Due
September 30, 2025
Commercial real estate:
Commercial property	$	899	$	—	$	—	$	899	$	305	$	777	$	—	$	1,082	$	1,981
Business property	141		—		—		141		89		—		415		504		645


Total commercial real estate	1,040		—		—		1,040		394		777		415		1,586		2,626
Commercial and industrial	7		—		—		7		105		8		208		321		328
Consumer:
Residential mortgage	430		—		—		430		—		369		2,419		2,788		3,218
Other consumer	71		—		—		71		—		—		—		—		71
Total consumer	501		—		—		501		—		369		2,419		2,788		3,289
Total	$	1,548	$	—	$	—	$	1,548	$	499	$	1,154	$	3,042	$	4,695	$	6,243
December 31, 2024
Commercial real estate:
Commercial property	$	433	$	—	$	—	$	433	$	—	$	984	$	269	$	1,253	$	1,686
Business property	333		—		—		333		508		—		698		1,206		1,539


Total commercial real estate	766		—		—		766		508		984		967		2,459		3,225
Commercial and industrial	—		—		—		—		—		71		—		71		71
Consumer:
Residential mortgage	3,679		303		—		3,982		—		403		—		403		4,385
Other consumer	154		—		—		154		—		—		24		24		178
Total consumer	3,833		303		—		4,136		—		403		24		427		4,563
Total	$	4,599	$	303	$	—	$	4,902	$	508	$	1,458	$	991	$	2,957	$	7,859

Loan Modification

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or combination of at above mentioned modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. These loans are placed on nonaccrual status at the time of such modification.

The following tables present loans that the borrowers were both experiencing financial difficulty and modified during the period indicated by loan segments and modification type:


	Three Months Ended
($ in thousands)	Combination of Other-Than-Insignificant Payment Delay and Term Extension		Total		Percentage to Each Loan Segment
September 30, 2025











Total	$	—	$	—	—	%
September 30, 2024
Commercial real estate:

Business property	$	1,183	$	1,183	0.2	%


Total commercial real estate	1,183		1,183		0.1	%





Total	$	1,183	$	1,183	0.1	%

	Nine Months Ended
($ in thousands)	Combination of Other-Than-Insignificant Payment Delay and Term Extension		Total		Percentage to Each Loan Segment
September 30, 2025






Commercial and industrial	50		50		0.1	%




Total	$	50	$	50	0.1	%
September 30, 2024
Commercial real estate:
Commercial property	$	410	$	410	0.1	%
Business property	2,230		2,230		0.4	%


Total commercial real estate	2,640		2,640		0.2	%
Commercial and industrial	44		44		0.1	%




Total	$	2,684	$	2,684	0.1	%

The Company had no commitments to lend to any borrower included in the above table.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods indicates:

Three Months Ended

Nine Months Ended

Combination of Other-Than-Insignificant Payment Delay and Term Extension

September 30, 2025

Commercial and industrial

6 -month interest-only payment and 6 -month term extension

September 30, 2024

Commercial property

6 -month fixed payment and 6 -month term extension

Business property

6 -month fixed payment and 6 -month term extension

Commercial and industrial

6 -month interest-only payment and 6 -month term extension

The following table presents the performance of loans that the borrowers were both experiencing financial difficulty and modified in the last 12 months:


($ in thousands)	30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Total
September 30, 2025











Total	$	—	$	—	$	—	$	—
December 31, 2024
Commercial real estate:

Business property	$	508	$	—	$	664	$	1,172


Total commercial real estate	508		—		664		1,172





Total	$	508	$	—	$	664	$	1,172

Purchases, Sales, and Transfers

The following table presents a summary of loans that were transferred from loans held-for-investment to loans held-for-sale for the periods indicate:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024







Consumer:
Residential mortgage	$	—	$	676	$	—	$	676

Total consumer	—		676		—		676
Total	$	—	$	676	$	—	$	676

The Company had no loans that were transferred from loans held-for-sale to loans held-for investment during the three and nine months ended September 30, 2025 or 2024.

The Company had no purchases of loans held-for-investment during the three and nine months ended September 30, 2025 or 2024.

Loans Held-For-Sale

The following table presents a composition of loans held-for-sale as of the date indicated:


($ in thousands)	September 30, 2025		December 31, 2024
Commercial real estate:
Commercial property	$	435	$	3,307
Business property	5,927		713


Total commercial real estate	6,362		4,020
Commercial and industrial	3,272		2,272




Total	$	9,634	$	6,292

Loans held-for-sale are carried at the lower of cost or fair value. When a determination is made at the time of commitment to originate as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s management evaluation processes, including asset/liability management and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred to held-for-sale at the lower of cost or fair value. Certain loans are transferred to held-for-sale with write-downs to ACL on loans.

Note 5. Other Real Estate Owned

The following table presents activity in OREO for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Balance at beginning of year	$	—	$	—	$	—	$	2,558
Additions	—		466		—		466
Sales	—		—		—		( 2,558 )

Balance at end of year	$	—	$	466	$	—	$	466

The following table presents activity in OREO valuation allowance for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Balance at beginning of year	$	—	$	—	$	—	$	—
Additions	—		—		—		—
Net direct write-downs and removal from sale	—		—		—		—
Balance at end of year	$	—	$	—	$	—	$	—

The following table presents expenses related to OREO for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Net gain on sales	$	—	$	—	$	—	$	( 13 )
Operating expenses, net of rental income	—		5		—		7
Total expenses	$	—	$	5	$	—	$	( 6 )

The Company did not provide loans to finance the sale of its OREO properties during the nine months ended September 30, 2024.

Note 6 - Servicing Assets

The Company sells SBA and certain residential mortgage loans with servicing retained. SBA loans are included in commercial real estate loans (“CRE SBA”) and commercial and industrial loans (“C&I SBA”). The Company sold loans of $ 29.0 million and $ 13.5 million, respectively, with the servicing rights retained and recognized a net gain on sale of $ 1.6 million and $ 750 thousand, respectively, during the three months ended September 30, 2025 and 2024. For the nine months ended September 30, 2025 and 2024, the Company sold loans of $ 72.6 million and $ 46.5 million, respectively, with the servicing rights retained and recognized a net gain on sale of $ 4.0 million and $ 2.6 million, respectively. Loan servicing income was $ 719 thousand and $ 786 thousand, respectively, for the three months ended September 30, 2025 and 2024, and $ 2.2 million and $ 2.5 million, respectively, for the nine months ended September 30, 2025 and 2024.

The following table presents the composition of servicing assets with key assumptions used to estimate the fair value as of the dates indicated:


	September 30, 2025											December 31, 2024
($ in thousands)	Residential Mortgage			CRE SBA			C&I SBA			Total		Residential Mortgage			CRE SBA			C&I SBA			Total
Carrying amount	$	36		$	5,162		$	685		$	5,883	$	42		$	5,226		$	569		$	5,837
Fair value	$	79		$	9,152		$	1,133		$	10,364	$	84		$	7,750		$	894		$	8,728
Discount rate	7.85		%	13.50		%	13.50		%			7.85		%	12.14		%	15.85		%
Prepayment speed	13.80		%	16.64		%	16.00		%			13.93		%	17.82		%	13.02		%
Weighted-average remaining life	17.6 years			20.1 years			7.5 years					23.8 years			20.7 years			7.4 years
Underlying loans being serviced	$	7,838		$	440,584		$	69,887		$	518,309	$	9,072		$	445,601		$	70,909		$	525,582

The following tables present activity in servicing assets for the periods indicated:


	Three Months Ended September 30,
	2025								2024
($ in thousands)	Residential Mortgage		CRE SBA		C&I SBA		Total		Residential Mortgage		CRE SBA		C&I SBA		Total
Balance at beginning of period	$	36	$	5,107	$	613	$	5,756	$	45	$	5,656	$	504	$	6,205
Additions	—		520		135		655		—		107		69		176
Amortization	—		( 465 )		( 63 )		( 528 )		( 2 )		( 420 )		( 57 )		( 479 )

Balance at end of period	$	36	$	5,162	$	685	$	5,883	$	43	$	5,343	$	516	$	5,902

	Nine Months Ended September 30,
	2025								2024
($ in thousands)	Residential Mortgage		CRE SBA		C&I SBA		Total		Residential Mortgage		CRE SBA		C&I SBA		Total
Balance at beginning of period	$	42	$	5,226	$	569	$	5,837	$	49	$	6,135	$	482	$	6,666
Additions	—		1,251		362		1,613		—		427		181		608
Amortization	( 6 )		( 1,315 )		( 246 )		( 1,567 )		( 6 )		( 1,219 )		( 147 )		( 1,372 )

Balance at end of period	$	36	$	5,162	$	685	$	5,883	$	43	$	5,343	$	516	$	5,902

Note 7 - Operating Leases

The following table presents operating lease cost and supplemental cash flow information related to leases for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Operating lease cost (1)	$	960	$	889	$	2,833	$	2,716
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	940	$	849	$	2,756	$	2,577
Right of use assets obtained in exchange for lease obligations	$	—	$	973	$	2,223	$	973
Right of use assets impairment (2)	$	10	$	—	$	238	$	—

(1) Included in Occupancy and Equipment on the Consolidated Statements of Income (Unaudited).

(2) Included in Other Expense on the Consolidated Statements of Income (Unaudited).

The Company used the incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The following table presents supplemental balance sheet information related to leases as of the dates indicated:


($ in thousands)	September 30, 2025			December 31, 2024
Operating leases:
Operating lease assets	$	17,136		$	17,254
Operating lease liabilities	$	18,961		$	18,671
Weighted-average remaining lease term	7.3 years			7.8 years
Weighted-average discount rate	4.79		%	4.72		%

The following table presents maturities of operating lease liabilities as of the date indicated:


($ in thousands)	September 30, 2025
Maturities:
2025	$	912
2026	3,406
2027	3,031
2028	2,920
2029	2,760
After 2029	10,217
Total lease payment	23,246
Imputed Interest	( 4,285 )
Present value of operating lease liabilities	$	18,961

Note 8 - Federal Home Loan Bank Advances and Other Borrowings

FHLB Advances

The Company had no FHLB advances at September 30, 2025 and December 31, 2024.

At September 30, 2025 and December 31, 2024, loans pledged to secure borrowings from the FHLB were $ 1.11 billion and $ 977.6 million, respectively. The Company’s investment in capital stock of the FHLB of San Francisco totaled $ 14.8 million and $ 13.9 million at September 30, 2025 and December 31, 2024, respectively. The Company had additional borrowing capacity of $ 826.1 million and $ 722.4 million from the FHLB as of September 30, 2025 and December 31, 2024, respectively.

Federal Reserve Discount Window

The Company had $ 808.7 million of unused borrowing capacity from the Federal Reserve Discount Window, to which the Company pledged loans with a carrying value of $ 1.00 billion with no outstanding borrowings at September 30, 2025. At December 31, 2024, the Company had $ 586.5 million of unused borrowing capacity from the Federal Reserve Discount Window, to which the Company pledged loans with a carrying value of $ 724.0 million with no outstanding borrowings.

Overnight Federal Funds Lines

The Company maintains overnight federal funds lines with correspondent financial institutions. The Company maintained available borrowing capacity of $ 65.0 million and had no borrowings at September 30, 2025. At December 31, 2024, the Company had an overnight borrowing of $ 15.0 million with an interest rate of 4.65 % and unused borrowing capacity of $ 50.0 million.

Note 9 - Shareholders’ Equity

Series C, Senior Non-Cumulative Perpetual Preferred Stock

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. Treasury under the Emergency Capital Investment Program (“ECIP”). The ECIP investment qualifies as tier 1 capital for purposes of the bank regulatory capital requirements.

The Series C Preferred Stock accrued no dividend for the first 24 months following the investment date. 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. Dividends are payable quarterly in arrears on March 15, June 15, September 15, and December 15.

Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions to provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effect of the COVID-19 pandemic by providing direct and indirect capital investments in low- and moderate-income community financial institutions.

The Series C Preferred Stock may be redeemed at the option of the Company according to its terms on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.

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 Option Agreement provides that if the Company meets certain conditions, the Company or the Company ’ s qualifying designee may repurchase the Series C Preferred Stock, potentially at a substantial discount (the “Repurchase Option”). The purchase price for the Preferred Stock under the Option Agreement is based on a formula equal to the present value of the Preferred Stock, calculated as set forth in the Option Agreement, together with any accrued and unpaid dividends thereon and could represent a discount from the Series C Preferred Stock’s liquidation amount.

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 loan 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. In addition to satisfying a Threshold Condition, the Option Agreement requires that the Company meet certain other eligibility conditions in order to exercise the purchase option in the future, including compliance with the terms of the original ECIP purchase agreement and the terms of the Series C Preferred Stock, maintaining qualification as either a certified community development financial institution or a minority depository institution and satisfying other legal and regulatory criteria.

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 following table presents the estimated purchase price based on the formula set forth in the Option Agreement as if the Company meet all Threshold Conditions as of September 30, 2025:


	Dividend Rate at the Reset Date Immediately Preceding the Purchase Date
($ in thousands)	0.50 %		1.25 %		2.00 %
Purchase price	$	4,795	$	11,987	$	19,179
Discount	64,346		57,154		49,962

The Company began paying quarterly dividends on the Series C Preferred Stock beginning in the three months ended June 30, 2024. Dividends on the Series C Preferred Stock totaled $ 86 thousand and $ 346 thousand for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, Dividends on the Series C Preferred Stock totaled $ 213 thousand and $ 488 thousand, respectively.

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 under a stock repurchase program approved by the Board of Directors on August 2, 2023 authorizing the repurchase of up to 720,000 shares. On July 23, 2025, the Company announced that the term of the stock repurchase program would be extended to July 31, 2026.

During the nine months ended September 30, 2025, the Company repurchased and retired 255,767 shares of common stock at a weighted-average price of $ 19.41 per share. As of September 30, 2025, the Company was authorized to purchase 322,010 additional shares under the stock repurchase program .

Note 10 - Share-Based Compensation

On May 25, 2023, the Company adopted the 2023 Equity Based Compensation Plan (“2023 EBC Plan”) approved by its shareholders to replace the 2013 Equity Based Stock Compensation Plan. The 2023 EBC Plan provides 700,000 shares of common stock for share-based compensation awards including incentive and non-qualified stock options, and restricted stock awards. As of September 30, 2025, there were 377,800 shares available for future grants.

Share-Based Compensation Expense

The following table presents share-based compensation expense and the related tax benefits for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Share-based compensation expense related to:
Stock options	$	69	$	69	$	206	$	213
Restricted stock awards	158		44		483		165
Total share-based compensation expense	$	227	$	113	$	689	$	378
Related tax benefits	$	60	$	26	$	182	$	89

The following table presents unrecognized share-based compensation expense as of the date indicated:

September 30, 2025

($ in thousands)

Unrecognized Expense

Weighted-Average Remaining Expected Recognition Period

Unrecognized share-based compensation expense related to:

Stock options

316

1.3 years

Restricted stock awards

1,935

3.1 years

Total unrecognized share-based compensation expense

2,251

2.8 years

Stock Options

The following tables represent stock option activity for the periods indicated:


	Three Months Ended September 30, 2025
($ in thousands except per share data)	Number of Shares	Weighted-Average Exercise Price Per Share		Weighted-Average Contractual Term	Aggregated Intrinsic Value
Outstanding at beginning of period	471,157	$	14.79	5.0 years	$	2,917

Exercised	( 42,325 )	$	10.64	0.2 years

Outstanding at end of period	428,832	$	15.20	5.2 years	$	2,488
Exercisable at end of period	260,173	$	14.82	3.4 years	$	1,609

	Nine Months Ended September 30, 2025
($ in thousands except per share data)	Number of Shares	Weighted-Average Exercise Price Per Share		Weighted-Average Contractual Term	Aggregated Intrinsic Value
Outstanding at beginning of period	576,412	$	14.20	5.0 years	$	3,481

Exercised	( 147,580 )	$	11.57	1.6 years

Outstanding at end of period	428,832	$	15.20	5.2 years	$	2,488
Exercisable at end of period	260,173	$	14.82	3.4 years	$	1,609

The following table represents information regarding unvested stock options for the periods indicated:


	Three Months Ended September 30, 2025			Nine Months Ended September 30, 2025
	Number of Shares	Weighted-Average Exercise Price Per Share		Number of Shares	Weighted-Average Exercise Price Per Share
Outstanding at beginning of period	171,659	$	15.87	179,659	$	15.93

Vested	( 3,000 )	$	20.28	( 11,000 )	$	18.19

Outstanding at end of period	168,659	$	15.79	168,659	$	15.79

Restricted Stock Awards

The following table represents restricted stock award activity for the periods indicated:


	Three Months Ended September 30, 2025			Nine Months Ended September 30, 2025
	Number of Shares	Weighted-Average Grant Date Fair Value Per Share		Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at beginning of period	114,100	$	20.34	119,100	$	20.40
Granted	6,200	$	21.91	6,200	$	21.91
Vested	( 2,200 )	$	17.61	( 7,200 )	$	20.63
Forfeited	( 1,200 )	$	20.29	( 1,200 )	$	20.29
Outstanding at end of period	116,900	$	20.47	116,900	$	20.47

Note 11 - Income Taxes

Income tax expense was $ 4.5 million and $ 2.9 million, respectively, and the effective tax rate was 28.2 % and 26.9 %, respectively, for the three months ended September 30, 2025 and 2024. For the nine months ended September 30, 2025 and 2024, income tax expense was $ 11.1 million and $ 7.2 million, respectively, and the effective tax rate was 28.3 % and 27.7 %, respectively.

At September 30, 2025 and December 31, 2024, the Company had no unrecognized tax benefits or related accrued interest.

The Company and its subsidiaries are subject to U.S. federal and various state jurisdictions income tax examinations. As of September 30, 2025, the Company is no longer subject to examination by taxing authorities for tax years before 2022 for federal taxes and before 2021 for various state jurisdictions. The statute of limitations vary by state, and state taxes other than California have been minimal and immaterial to the Company’s financial results.

No te 12 - Earnings Per Share

The following table presents the computations of basic and diluted earnings per share (“EPS”) for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands, except per share)	2025		2024		2025		2024
Basic earnings per share:
Net income available to common shareholders	$	11,326	$	7,468	$	28,005	$	18,292
Less: income allocated to unvested restricted stock	( 91 )		( 11 )		( 223 )		( 31 )
Net income allocated to common stock	$	11,235	$	7,457	$	27,782	$	18,261
Weighted-average total common shares outstanding	14,315,708		14,262,513		14,342,828		14,262,340
Less: weighted-average unvested restricted stock	( 114,654 )		( 21,499 )		( 114,304 )		( 24,489 )
Weighted-average common shares outstanding, basic	14,201,054		14,241,014		14,228,524		14,237,851
Basic earnings per share	$	0.79	$	0.52	$	1.95	$	1.28
Diluted earnings per share:
Net income allocated to common stock	$	11,235	$	7,457	$	27,782	$	18,261
Weighted-average common shares outstanding, basic	14,201,054		14,241,014		14,228,524		14,237,851
Diluted effect of stock options	124,902		115,370		125,760		90,659
Weighted-average common shares outstanding, diluted	14,325,956		14,356,384		14,354,284		14,328,510
Diluted earnings per share	$	0.78	$	0.52	$	1.94	$	1.27

There were 35,000 and 291,700 stock options excluded in computing diluted EPS because they were anti-dilutive for three months ended September 30, 2025 and 2024, respectively. For nine months ended September 30, 2025 and 2024, there were 55,000 and 283,000 stock options excluded in computing diluted EPS because they were anti-dilutive, respectively.

Note 13 - Off-Balance Sheet Credit Exposures, Commitments and Other Contingencies

In the ordinary course of business, the Company enters into financial commitments to meet the financing needs of its customers. These financial commitments include commitments to extend credit and letters of credit. Those instruments involve to varying degrees, elements of credit, and interest rate risk not recognized in the Company’s consolidated financial statements.

The following table presents outstanding financial commitments whose contractual amount represents credit risk as of the dates indicated:


	September 30, 2025				December 31, 2024
($ in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Unused lines of credit	$	13,127	$	383,376	$	12,923	$	370,313
Unfunded loan commitments	—		10,614		—		17,339
Standby letters of credit	5,479		1,595		5,279		1,516

Total	$	18,606	$	395,585	$	18,202	$	389,168

Unfunded loan commitments are generally made for periods of 90 days or less, except for SBA loans that are generally made for periods of 180 days or less.

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 loss estimation process includes assumptions for utilization at default. These assumptions are based on the Company’s own historical internal loan data. As of September 30, 2025 and December 31, 2024, the Company maintained an ACL on off-balance sheet credit exposures of $ 1.3 million and $ 1.2 million in Accrued Interest Payable and Other Liabilities in the Consolidated Balance Sheets, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. The Company evaluates each client’s credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company is based on management’s credit evaluation of the customer.

Litigation

The Company is involved in various matters of litigation, which have arisen in the ordinary course of business. In the opinion of management, the disposition of pending matters of litigation will not have a material effect on the Company’s consolidated financial statements.

Note 14 - Regulatory Matters

Under the final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks, the Company and Bank must hold a capital conservation buffer of 2.50% above the adequately capitalized risk-based capital ratios to avoid restrictions on dividends, stock repurchase, discretionary bonuses and other payments. Management believes as of September 30, 2025 and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they are subject. Historically, the Company has operated under the Federal Reserve’s Small Bank Holding Company Policy Statement, which exempts bank holding companies with total consolidated assets of less than $3.0 billion from the Federal Reserve's risk-based and leverage consolidated capital requirements. Because the Company's total consolidated assets exceeded $3.0 billion as of December 31, 2024, the Company is now subject to the Federal Reserve's consolidated capital requirements separate in addition to those of the Bank. The Company and the Bank’s capital conservation buffers were 7.02 % and 6.85 %, respectively, as of September 30, 2025, and 6.94 % and 6.92 %, respectively, as of December 31, 2024. Unrealized gain or loss on securities available-for-sale is not included in computing regulatory capital. The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:


	Actual				Minimum Capital Adequacy Requirement				To Be Well Capitalized Under Prompt Corrective Provisions
($ in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2025
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	$	320,083	11.52	%	$	125,085	4.5	%	N/A		N/A
Total capital (to risk-weighted assets)	423,495		15.24	%	222,373		8.0	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	389,224		14.00	%	166,780		6.0	%	N/A		N/A
Tier 1 capital (to average assets)	389,224		11.57	%	134,543		4.0	%	N/A		N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)	$	378,284	13.61	%	$	125,036	4.5	%	$	180,608	6.5	%
Total capital (to risk-weighted assets)	412,555		14.85	%	222,287		8.0	%	277,859		10.0	%
Tier 1 capital (to risk-weighted assets)	378,284		13.61	%	166,715		6.0	%	222,287		8.0	%
Tier 1 capital (to average assets)	378,284		11.25	%	134,500		4.0	%	168,125		5.0	%
December 31, 2024
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	$	303,423	11.44	%	$	119,387	4.5	%	N/A		N/A
Total capital (to risk-weighted assets)	404,383		15.24	%	212,243		8.0	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	372,564		14.04	%	159,182		6.0	%	N/A		N/A
Tier 1 capital (to average assets)	372,564		12.45	%	119,666		4.0	%	N/A		N/A
PCB Bank
Common tier 1 capital (to risk-weighted assets)	$	363,786	13.72	%	$	119,340	4.5	%	$	172,380	6.5	%
Total capital (to risk-weighted assets)	395,606		14.92	%	212,160		8.0	%	265,200		10.0	%
Tier 1 capital (to risk-weighted assets)	363,786		13.72	%	159,120		6.0	%	212,160		8.0	%
Tier 1 capital (to average assets)	363,786		12.16	%	119,636		4.0	%	149,545		5.0	%

The California Financial Code provides that a bank generally may not make a cash distribution to its shareholders in excess of the lesser of the bank’s undivided profits or the bank’s net income for its last three fiscal years less the amount of any distribution made to the bank’s shareholders during the same period. This law limits the distributions the Bank is permitted to make to the Company. As a California corporation, the Company is subject to the limitations of the California Corporations Code, which allows a corporation to distribute cash or property to shareholders, including a dividend or repurchase or redemption of shares, if the corporation meets either a retained earnings test or a balance sheet test. Under the retained earnings test, the Company may make a distribution from retained earnings to the extent that its retained earnings exceed the sum of (a) the amount of the distribution plus (b) the amount, if any, of dividends in arrears on shares with preferential dividend rights. Under the balance sheet test, the Company may also make a distribution if, immediately after the distribution, the value of its assets equals or exceeds the sum of (a) its total liabilities plus (b) the liquidation preference of any shares which have a preference upon dissolution over the rights of shareholders receiving the distribution. Indebtedness is not considered a liability if the terms of such indebtedness provide that payment of principal and interest thereon are to be made only if, and to the extent that, a distribution to shareholders could be made under the balance sheet test.

The Federal Reserve, the Federal Deposit Insurance Corporation (the “FDIC”) and the California Department of Financial Protection and Innovation periodically examine the Company, the Bank and their businesses, including for compliance with laws and regulations. If, as a result of an examination, a banking agency were to determine that the Company’s or the Bank’s financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of their operations had become unsatisfactory, or that the Company or the Bank was in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in the Company’s or the Bank’s capital, to restrict growth, to assess civil money penalties, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate the Bank’s deposit insurance and place the Bank into receivership or conservatorship.

Note 15 - Revenue Recognition

The following table presents revenue from contracts with customers within the scope of ASC 606, Revenue from Contracts with Customers, for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
Noninterest income in-scope of Topic 606
Service charges and fees on deposits:
Monthly service fees	$	31	$	27	$	90	$	77
Account analysis fees	217		250		660		715
Non-sufficient funds charges	102		96		297		272
Other deposit related fees	27		26		77		77
Total service charges and fees on deposits	377		399		1,124		1,141
Debit card fees	100		154		303		253
Gain on sale of other real estate owned	—		—		—		13
Wire transfer fees	180		156		506		462
Other service charges	78		61		190		177
Total	$	735	$	770	$	2,123	$	2,046

Note 16 - Segment Information

The Company operates as a single operating segment, the banking segment or the Bank, providing financial services within the U.S. The Bank provides a full range of deposit products, and commercial and residential loans, primarily to individuals, small businesses and commercial clients. All operations are domestic.

The Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, evaluates the performance and allocates resources to the Bank as a whole. The CODM relies on the Executive Management Team, which includes the Chief Financial Officer, Chief Risk Officer, Chief Banking Officer, Chief Credit Officer and others, to provide detailed financial and operational reports. These reports help the CODM assess the performance of the Bank and determine the appropriate allocation of resources. Although the Bank management team provides valuable insights into various functional areas, all significant decisions related to performance evaluation and resource allocation are ultimately made by the CODM in the context of the Bank as a single operating segment.

The CODM evaluates the performance of the Bank based on both financial and non-financial measures. The CODM reviews revenue to evaluate product pricing and net income, including significant expenses, to assess performance and profitability. In conjunction with these measures, the CODM utilizes profitability ratios, EPS, net interest margin, loan and deposit growth, credit quality, capital adequacy, and liquidity as these measures provide additional insight of the Bank's business activities. The CODM also considers non-financial factors such as the Bank’s reputation, regulatory compliance and human resources.

The following table presents financial measures the CODM reviews to allocate resources to the Bank as of the dates or for the periods indicated:


	As of or For the Three Months Ended September 30,						As of or For the Nine Months Ended September 30,
($ in thousands)	2025			2024			2025			2024
Revenue
Interest income	$	51,471		$	45,998		$	147,671		$	134,498
Interest expense	24,493			23,279			70,420			69,045
Net interest income	26,978			22,719			77,251			65,453
Gain on sale of loans	1,617			750			3,969			2,591
Other income	1,797			1,870			5,322			5,459
Total revenue, net of interest expense	30,392			25,339			86,542			73,503
Expenses
Provision for credit losses	( 381 )			50			3,004			1,399
Salaries and employee benefits	9,293			8,801			27,212			27,244
Premises expense	1,807			1,684			5,363			5,242
Depreciation expense	565			577			1,677			1,677
Other expense	3,204			3,540			9,920			11,966
Total expense	14,488			14,652			47,176			47,528
Income before income taxes	15,904			10,687			39,366			25,975
Income taxes	4,492			2,873			11,148			7,195
Net income	$	11,412		$	7,814		$	28,218		$	18,780

Earnings per share, diluted	$	0.78		$	0.52		$	1.94		$	1.27
Return on average assets	1.35		%	1.08		%	1.17		%	0.88		%
Return on average shareholders’ equity	11.92		%	8.70		%	10.10		%	7.11		%
Net interest margin	3.28		%	3.25		%	3.29		%	3.17		%
Loans held-for-investment growth percentage	( 1.5 )		%	0.7		%	4.7		%	6.1		%
Total deposits growth percentage	3.2		%	2.2		%	11.4		%	4.6		%
Tier 1 leverage ratio (consolidated)	11.57		%	12.79		%	11.57		%	12.79		%
ACL on loans to loans held-for-investment	1.20		%	1.17		%	1.20		%	1.17		%

Note 17 - Subsequent Events

Dividend Declared on Common Stock

On October 22, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $ 0.20 per common share. The dividend will be paid on or about November 14, 2025, to shareholders of record as of the close of business on November 7, 2025.

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis of the major factors that influenced the Company’s results of operations and financial condition as of and for the three and nine months ended September 30, 2025. This analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and with the unaudited consolidated financial statements and notes (unaudited) thereto set forth in this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

The Company’s consolidated financial statements are prepared in accordance with GAAP and general practices within the banking industry. Within these financial statements, certain financial information contains approximate measurements of financial effects of transactions and impacts at the consolidated statements of financial condition dates and the Company’s results of operations for the reporting periods. As certain accounting policies require significant estimates and assumptions that have a material impact on the carrying value of assets and liabilities, the Company has established critical accounting policies to facilitate making the judgment necessary to prepare financial statements. The Company’s critical accounting policies are described in Note 1 to Consolidated Financial Statements and in the “Critical Accounting Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in its Annual Report on Form 10-K for the year ended December 31, 2024 and in Note 1 to Consolidated Financial Statements (unaudited) included in Part I of this Quarterly Report on Form 10-Q.

Allowance for Credit Losses

The Company accounts for credit losses on loans, off-balance sheet credit exposures and securities available-for-sale in accordance with ASC 326, “Financial Instruments - Credit Losses (Topic 326).” Measuring credit losses under the current expected credit losses (“CECL”) framework requires a significant amount of judgment, including the incorporation of reasonable and supportable forecasts about future conditions that may ultimately impact the level of credit losses the Company may recognize. Under the CECL framework, current expected credit losses are recorded on financial assets within the scope of ASC 326 at the time of their origination or acquisition.

Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics. The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts.

The use of reasonable and supportable forecasts requires significant judgment, such as selecting forecast scenarios, as well as determining the appropriate length of the forecast horizon. Management leverages economic projections from a reputable and independent third party to inform and provide its reasonable and supportable economic forecasts. Although no one economic variable can fully demonstrate the sensitivity of the ACL estimate to changes in economic variables used in the ACL model, the Company utilized changes in U.S. unemployment rate and year-over-year change in real gross domestic product (“GDP”) growth rate as its key economic variables. Other internal and external indicators of economic forecasts may also be considered by management when developing the forecast metrics. The Company’s ACL model reverts to long-term average loss rates for purposes of estimating expected cash flows beyond a period deemed reasonable and supportable. The Company forecasts economic conditions and expected credit losses over a one-year time horizon. 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 September 30, 2025, the quantitative estimate of the ACL would increase by approximately $18.0 million under sole consideration of a more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but is absent of qualitative overlays and other qualitative adjustments that are part of the quarterly reserving process and does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.

A portion of the collectively evaluated ACL on loans also includes qualitative adjustments for risk factors not reflected or captured by the quantitative modeled ACL but are relevant in estimating future expected credit losses. Qualitative adjustments may be related to and include, but are not limited to factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization-specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation, and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of ACL model data inputs.

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.

Non-GAAP Measures

The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated, and presented in accordance with GAAP. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures and may not be comparable to non-GAAP financial measures that may be presented by other companies.

The following tables present reconciliation of return on average tangible common equity, tangible common equity per common share and tangible common equity to tangible assets ratios to their most comparable GAAP measures as of the dates or for the periods indicated. These non-GAAP measures, which are presented in this Quarterly Report on Form 10-Q, are used by management in its analysis of the Company's performance.


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2025			2024			2025			2024
Average total shareholders' equity	$	379,834		$	357,376		$	373,439		$	352,866
Less: average preferred stock	69,141			69,141			69,141			69,141
Average tangible common equity	$	310,693		$	288,235		$	304,298		$	283,725
Net income	$	11,412		$	7,814		$	28,218		$	18,780
Annualized return on average shareholders’ equity	11.92		%	8.70		%	10.10		%	7.11		%
Net income available to common shareholders	$	11,326		$	7,468		$	28,005		$	18,292
Annualized return on average tangible common equity	14.46		%	10.31		%	12.30		%	8.61		%


($ in thousands, except per share data)	September 30, 2025			December 31, 2024			September 30, 2024
Total shareholders' equity	$	384,501		$	363,814		$	362,300
Less: preferred stock	69,141			69,141			69,141
Tangible common equity	$	315,360		$	294,673		$	293,159
Outstanding common shares	14,277,164			14,380,651			14,266,725
Book value per common share	$	26.93		$	25.30		$	25.39
Tangible common equity per common share	$	22.09		$	20.49		$	20.55
Total assets	$	3,363,506		$	3,063,971		$	2,889,833
Total shareholders' equity to total assets	11.43		%	11.87		%	12.54		%
Tangible common equity to total assets	9.38		%	9.62		%	10.14		%

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 Three Months Ended September 30,						As of or For the Nine Months Ended September 30,
($ in thousands, except per share data)	2025			2024			2025			2024
Selected balance sheet data:
Cash and cash equivalents	$	369,498		$	193,064		$	369,498		$	193,064
Securities available-for-sale	150,279			147,635			150,279			147,635
Loans held-for-sale	9,634			5,170			9,634			5,170
Loans held-for-investment	2,752,514			2,466,174			2,752,514			2,466,174
ACL on loans	(32,960)			(28,930)			(32,960)			(28,930)
Total assets	3,363,506			2,889,833			3,363,506			2,889,833
Total deposits	2,913,502			2,459,682			2,913,502			2,459,682
Shareholders’ equity	384,501			362,300			384,501			362,300
Selected income statement data:
Interest income	$	51,471		$	45,998		$	147,671		$	134,498
Interest expense	24,493			23,279			70,420			69,045
Net interest income	26,978			22,719			77,251			65,453
Provision for credit losses	(381)			50			3,004			1,399
Noninterest income	3,414			2,620			9,291			8,050
Noninterest expense	14,869			14,602			44,172			46,129
Income before income taxes	15,904			10,687			39,366			25,975
Income tax expense	4,492			2,873			11,148			7,195
Net income	11,412			7,814			28,218			18,780
Preferred stock dividends	86			346			213			488
Net income available to common shareholders	11,326			7,468			28,005			18,292
Per share data:
Earnings per common share, basic	$	0.79		$	0.52		$	1.95		$	1.28
Earnings per common share, diluted	0.78			0.52			1.94			1.27
Book value per common share (1)	26.93			25.39			26.93			25.39
Tangible common equity per common share (9)	22.09			20.55			22.09			20.55
Cash dividends declared per common share	0.20			0.18			0.60			0.54
Outstanding share data:
Number of common shares outstanding	14,277,164			14,266,725			14,277,164			14,266,725
Weighted-average common shares outstanding, basic	14,201,054			14,241,014			14,228,524			14,237,851
Weighted-average common shares outstanding, diluted	14,325,956			14,356,384			14,354,284			14,328,510
Selected performance ratios:
Return on average assets (2)	1.35		%	1.08		%	1.17		%	0.88		%
Return on average shareholders’ equity (2)	11.92		%	8.70		%	10.10		%	7.11		%
Dividend payout ratio (3)	25.32		%	34.62		%	30.77		%	42.19		%
Efficiency ratio (4)	48.92		%	57.63		%	51.04		%	62.76		%
Yield on average interest-earning assets (2)	6.26		%	6.58		%	6.30		%	6.51		%
Cost of average interest-bearing liabilities (2)	4.10		%	4.85		%	4.17		%	4.86		%
Net interest spread (2)	2.16		%	1.73		%	2.13		%	1.65		%
Net interest margin (2), (5)	3.28		%	3.25		%	3.29		%	3.17		%
Total loans to total deposits ratio (6)	94.81		%	100.47		%	94.81		%	100.47		%


	As of or For the Three Months Ended September 30,						As of or For the Nine Months Ended September 30,
($ in thousands, except per share data)	2025			2024			2025			2024















Asset quality:
Loans 30 to 89 days past due and still accruing	$	1,548		$	2,994		$	1,548		$	2,994

Nonperforming loans (7)	8,158			6,614			8,158			6,614
Nonperforming assets (8)	8,158			7,080			8,158			7,080
Net charge-offs	166			10			552			47
Loans 30 to 89 days past due and still accruing to loans held-for-investment	0.06		%	0.12		%	0.06		%	0.12		%


Nonperforming loans to loans held-for-investment	0.30		%	0.27		%	0.30		%	0.27		%
Nonperforming loans to ACL on loans	24.75		%	22.86		%	24.75		%	22.86		%
Nonperforming assets to total assets	0.24		%	0.24		%	0.24		%	0.24		%
ACL on loans to loans held-for-investment	1.20		%	1.17		%	1.20		%	1.17		%


ACL on loans to nonperforming loans	404.02		%	437.41		%	404.02		%	437.41		%
Net charge-offs (recoveries) to average loans held-for-investment (2)	0.02		%	0.01		%	0.03		%	0.01		%
Capital ratios:
Shareholders’ equity to total assets	11.43		%	12.54		%	11.43		%	12.54		%
Tangible common equity to total assets (9)	9.38		%	10.14		%	9.38		%	10.14		%
Average shareholders’ equity to average total assets	11.32		%	12.47		%	11.57		%	12.41		%
PCB Bancorp
Common tier 1 capital (to risk-weighted assets)	11.52		%	11.92		%	11.52		%	11.92		%
Total capital (to risk-weighted assets)	15.24		%	15.88		%	15.24		%	15.88		%
Tier 1 capital (to risk-weighted assets)	14.00		%	14.68		%	14.00		%	14.68		%
Tier 1 capital (to average assets)	11.57		%	12.79		%	11.57		%	12.79		%
PCB Bank
Common tier 1 capital (to risk-weighted assets)	13.61		%	14.33		%	13.61		%	14.33		%
Total capital (to risk-weighted assets)	14.85		%	15.54		%	14.85		%	15.54		%
Tier 1 capital (to risk-weighted assets)	13.61		%	14.33		%	13.61		%	14.33		%
Tier 1 capital (to average assets)	11.25		%	12.49		%	11.25		%	12.49		%

(1) Shareholders’ equity divided by common shares outstanding.

(2) Annualized.

(3) Dividends declared per common share divided by basic earnings per common share.

(4) Noninterest expenses divided by the sum of net interest income and noninterest income.

(5) Net interest income divided by average total interest-earning assets.

(6) Total loans include both loans held-for-sale and loans held-for-investment.

(7) Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing.

(8) Nonperforming assets include nonperforming loans and other real estate owned.

(9) Non-GAAP measure. See "Non-GAAP Measures" for a reconciliation to its most comparable GAAP measure.

Executive Summary

Q3 2025 Financial Highlights

• Net income available for common shareholders was $11.3 million for the three months ended September 30, 2025, an increase of $3.9 million, or 51.7%, from $7.5 million for the three months ended September 30, 2024;

▪ Recorded a provision (reversal) for credit losses of $(381) thousand for the three months ended September 30, 2025 compared with $50 thousand for the three months ended September 30, 2024;

▪ ACL on loans to loans held-for-investment ratio was 1.20% at September 30, 2025 compared with 1.16% at December 31, 2024;

• Net interest income was $27.0 million for the three months ended September 30, 2025 compared with $22.7 million for the three months ended September 30, 2024. Net interest margin was 3.28% for the three months ended September 30, 2025 compared with 3.25% for the three months ended September 30, 2024;

• Gain on sale of loans was $1.6 million for the three months ended September 30, 2025 compared with $750 thousand for the three months ended September 30, 2024;

• Total assets were $3.36 billion at September 30, 2025, an increase of $299.5 million, or 9.8%, from $3.06 billion at December 31, 2024;

• Loans held-for-investment were $2.75 billion at September 30, 2025, an increase of $123.1 million, or 4.7%, from $2.63 billion at December 31, 2024; and

• Total deposits were $2.91 billion at September 30, 2025, an increase of $297.7 million, or 11.4%, from $2.62 billion at December 31, 2024.

Results of Operations

Net Interest Income

A principal component of the Company’s earnings is net interest income, which is the difference between the interest and fees earned on loans and investments and the interest paid on deposits and borrowed funds. Net interest income expressed as a percentage of average interest earning assets is referred to as the net interest margin. The net interest spread is the yield on average interest earning assets less the cost of average interest bearing liabilities. 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.

The following tables present interest income, average interest-earning assets, interest expense, average interest-bearing liabilities, and their corresponding yields and costs expressed both in dollars and rates, on a consolidated operations basis, for the periods indicated:


	Three Months Ended September 30,
	2025						2024
($ in thousands)	Average Balance		Interest		Yield/ Cost (6)		Average Balance		Interest		Yield/ Cost (6)
Interest-earning assets:
Total loans (1)	$	2,784,148	$	46,193	6.58	%	$	2,456,015	$	42,115	6.82	%
Mortgage backed securities	120,226		1,167		3.85	%	111,350		1,000		3.57	%
Collateralized mortgage obligation	19,957		197		3.92	%	22,661		244		4.28	%
SBA loan pool securities	4,686		41		3.47	%	6,571		69		4.18	%
Municipal bonds - tax exempt (2)	2,411		22		3.62	%	2,698		24		3.54	%
Corporate bonds	4,804		47		3.88	%	4,248		47		4.40	%
Interest-bearing deposits in other financial institutions	312,659		3,484		4.42	%	161,669		2,202		5.42	%
FHLB and other bank stock	14,978		320		8.48	%	14,042		297		8.41	%
Total interest-earning assets	3,263,869		51,471		6.26	%	2,779,254		45,998		6.58	%
Noninterest-earning assets:
Cash and due from banks	23,539						24,098
Allowance for credit losses on loans	(33,548)						(28,797)
Other assets	100,728						92,152
Total noninterest earning assets	90,719						87,453
Total assets	$	3,354,588					$	2,866,707
Interest-bearing liabilities:
Deposits:
NOW and money market accounts	$	612,527	5,698		3.69	%	$	496,158	5,129		4.11	%
Savings	5,519		3		0.22	%	6,204		4		0.26	%
Time deposits	1,708,124		18,294		4.25	%	1,390,644		17,924		5.13	%
Borrowings	43,109		498		4.58	%	15,848		222		5.57	%
Total interest-bearing liabilities	2,369,279		24,493		4.10	%	1,908,854		23,279		4.85	%
Noninterest-bearing liabilities:
Demand deposits	541,243						534,761
Other liabilities	64,232						65,716
Total noninterest-bearing liabilities	605,475						600,477
Total liabilities	2,974,754						2,509,331
Shareholders’ equity	379,834						357,376
Total liabilities and shareholders’ equity	$	3,354,588					$	2,866,707
Net interest income			$	26,978					$	22,719
Net interest spread (3)					2.16	%					1.73	%
Net interest margin (4)					3.28	%					3.25	%
Cost of deposits					3.32	%					3.78	%
Cost of funds (5)					3.34	%					3.79	%

(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees of $433 thousand and $246 thousand, respectively, and net accretion of discount on loans of $563 thousand and $773 thousand, respectively, are included in the interest income for the three months ended September 30, 2025 and 2024.

(2) The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3) Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4) Net interest margin is calculated by dividing net interest income by average interest-earning assets.

(5) Cost of funds is calculated by dividing annualized interest expense on total interest-bearing liabilities by the sum of average total interest-bearing liabilities and noninterest-bearing demand deposits.

(6) Annualized.


	Nine Months Ended September 30,
	2025						2024
($ in thousands)	Average Balance		Interest		Yield/ Cost (6)		Average Balance		Interest		Yield/ Cost (6)
Interest-earning assets:
Total loans (1)	$	2,738,957	$	134,697	6.58	%	$	2,413,777	$	121,992	6.75	%
Mortgage backed securities	117,040		3,387		3.87	%	105,933		2,750		3.47	%
Collateralized mortgage obligation	20,530		610		3.97	%	23,137		747		4.31	%
SBA loan pool securities	5,322		141		3.54	%	6,925		221		4.26	%
Municipal bonds - tax exempt (2)	2,405		65		3.61	%	3,077		81		3.52	%
Corporate bonds	4,617		141		4.08	%	4,211		141		4.47	%
Interest-bearing deposits in other financial institutions	231,781		7,701		4.44	%	188,432		7,714		5.47	%
FHLB and other bank stock	14,615		929		8.50	%	13,519		852		8.42	%
Total interest-earning assets	3,135,267		147,671		6.30	%	2,759,011		134,498		6.51	%
Noninterest-earning assets:
Cash and due from banks	23,817						22,845
Allowance for credit losses on loans	(32,063)						(28,251)
Other assets	100,101						89,784
Total noninterest earning assets	91,855						84,378
Total assets	$	3,227,122					$	2,843,389
Interest-bearing liabilities:
Deposits:
NOW and money market accounts	$	543,570	14,767		3.63	%	$	474,584	14,670		4.13	%
Savings	5,488		10		0.24	%	6,432		12		0.25	%
Time deposits	1,669,484		54,287		4.35	%	1,380,379		52,878		5.12	%
Borrowings	39,586		1,356		4.58	%	35,427		1,485		5.60	%
Total interest-bearing liabilities	2,258,128		70,420		4.17	%	1,896,822		69,045		4.86	%
Noninterest-bearing liabilities:
Demand deposits	530,558						537,682
Other liabilities	64,997						56,019
Total noninterest-bearing liabilities	595,555						593,701
Total liabilities	2,853,683						2,490,523
Shareholders’ equity	373,439						352,866
Total liabilities and shareholders’ equity	$	3,227,122					$	2,843,389
Net interest income			$	77,251					$	65,453
Net interest spread (3)					2.13	%					1.65	%
Net interest margin (4)					3.29	%					3.17	%
Cost of deposits					3.36	%					3.76	%
Cost of funds (5)					3.38	%					3.79	%

(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees of $1.1 million and $919 thousand, respectively, and net accretion of discount on loans of $1.5 million and $2.1 million, respectively, are included in the interest income for the nine months ended September 30, 2025 and 2024.

(2) The yield on municipal bonds has not been computed on a tax-equivalent basis.

(3) Net interest spread is calculated by subtracting average rate on interest-bearing liabilities from average yield on interest-earning assets.

(4) Net interest margin is calculated by dividing net interest income by average interest-earning assets.

(6) Annualized.

The following table presents the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. Information is provided on changes attributable to: (i) changes in volume multiplied by the prior rate; and (ii) changes in rate multiplied by the prior volume. Changes attributable to both rate and volume which cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.


	Three Months Ended September 30, 2025 vs. 2024						Nine Months Ended September 30, 2025 vs. 2024
	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	$	5,807	$	(1,729)	$	4,078	$	16,276	$	(3,571)	$	12,705
Investment securities	45		45		90		181		223		404
Other interest-earning assets	2,177		(872)		1,305		1,697		(1,633)		64
Total interest income	8,029		(2,556)		5,473		18,154		(4,981)		13,173
Interest incurred on:
Savings, NOW, and money market deposits	1,215		(647)		568		1,808		(1,713)		95
Time deposits	4,729		(4,359)		370		10,693		(9,284)		1,409
Borrowings	384		(108)		276		175		(304)		(129)
Total interest expense	6,328		(5,114)		1,214		12,676		(11,301)		1,375
Change in net interest income	$	1,701	$	2,558	$	4,259	$	5,478	$	6,320	$	11,798

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table presents the components of net interest income for the periods indicated:


	Three Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Interest and dividend income:
Loans, including fees	$	46,193	$	42,115	$	4,078	9.7	%
Investment securities	1,474		1,384		90		6.5	%
Other interest-earning assets	3,804		2,499		1,305		52.2	%
Total interest income	51,471		45,998		5,473		11.9	%
Interest expense:
Deposits	23,995		23,057		938		4.1	%
Borrowings	498		222		276		124.3	%
Total interest expense	24,493		23,279		1,214		5.2	%
Net interest income	$	26,978	$	22,719	$	4,259	18.7	%

Net interest income increased primarily due to a 17.4% increase in average balance of interest-earning assets and a 75 basis point decrease in average cost, partially offset by a 24.1% increase in average balance of interest-bearing liabilities and a 32 basis point decrease in average yield.

Interest and fees on loans increased primarily due to a 13.4% increase in average balance, partially offset by a 24 basis point decrease in average yield. The decrease in average yield was primarily due to decreases in market rates and net accretion of discount on loans, partially offset by an increase in net amortization of deferred loan fees.

Interest on investment securities increased primarily due to a 3.1% increase in average balance and a 12 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the three months ended September 30, 2025 and 2024, the average yield on total investment securities was 3.85% and 3.73%, respectively.

Interest income on other interest-earning assets increased primarily due to an 86.5% increase in average balance, partially offset by a 105 basis point decrease in average yield. The decrease in average yield was primarily due to a decrease in interest rate on cash held at the Federal Reserve Bank. For the three months ended September 30, 2025 and 2024, the average yield on total other interest-earning assets was 4.61% and 5.66%, respectively.

Interest expense on deposits decreased primarily due to a 76 basis point decrease in average cost of interest-bearing deposits, partially offset by a 22.9% increase in average balance of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the three months ended September 30, 2025 and 2024, average cost on total interest-bearing deposits was 4.09% and 4.85%, respectively, and average cost on total deposits were 3.32% and 3.78%, respectively.

Interest expense on other borrowings increased primarily due to a 172.0% increase in average balance, partially offset by a 99 basis point decrease in average cost.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table presents the components of net interest income for the periods indicated:


	Nine Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Interest and dividend income:
Loans, including fees	$	134,697	$	121,992	$	12,705	10.4	%
Investment securities	4,344		3,940		404		10.3	%
Other interest-earning assets	8,630		8,566		64		0.7	%
Total interest income	147,671		134,498		13,173		9.8	%
Interest expense:
Deposits	69,064		67,560		1,504		2.2	%
Borrowings	1,356		1,485		(129)		(8.7)	%
Total interest expense	70,420		69,045		1,375		2.0	%
Net interest income	$	77,251	$	65,453	$	11,798	18.0	%

Net interest income increased primarily due to a 13.6% increase in average balance of interest-earning assets and a 69 basis point decrease in average cost, partially offset by a 19.0% increase in average balance of interest-bearing liabilities and a 21 basis point decrease in average yield.

Interest and fees on loans increased primarily due to a 13.5% increase in average balance, partially offset by a 17 basis point decrease in average yield. The decrease in average yield was primarily due to decreases in market rates.

Interest on investment securities increased primarily due to a 4.6% increase in average balance and a 20 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the nine months ended September 30, 2025 and 2024, the average yield on total investment securities was 3.87% and 3.67%, respectively.

Interest income on other interest-earning assets increased primarily due to a 22.0% increase in average balance, partially offset by a 99 basis point decrease in average yield. The decrease in average yield was primarily due to a decrease in interest rate on cash held at the Federal Reserve Bank. For the nine months ended September 30, 2025 and 2024, the average yield on total other interest-earning assets was 4.68% and 5.67%, respectively.

Interest expense on deposits increased primarily due to a 19.2% increase in average balance of interest-bearing deposits, partially offset by a 69 basis point decrease in average cost of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the nine months ended September 30, 2025 and 2024, average cost on total interest-bearing deposits was 4.16% and 4.85%, respectively, and average cost on total deposits were 3.36% and 3.76%, respectively.

Interest expense on other borrowings decreased primarily due to a 102 basis point decrease in average cost, partially offset by an 11.7% increase in average balance.

Provision for Credit Losses

The following tables present a composition of provision for credit losses for the periods indicated:


	Three Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Provision (reversal) for credit losses on loans	$	(428)	$	193	$	(621)	NM
Provision (reversal) for credit losses on off-balance sheet credit exposures	47		(143)		190		NM
Total Provision (reversal) for credit losses	$	(381)	$	50	$	(431)	NM


	Nine Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Provision for credit losses on loans	$	2,884	$	1,444	$	1,440	99.7	%
Provision (reversal) for credit losses on off-balance sheet credit exposures	120		(45)		165		NM
Total provision for credit losses	$	3,004	$	1,399	$	1,605	114.7	%

Reversal for credit losses for the three months ended September 30, 2025 was primarily due to decreases in loans held-for-investment. Provision for credit losses for the nine months ended September 30, 2025 was primarily due to increases in loans held-for-investment and quantitatively measured loss reserve requirement from the worsened year-over-year change in real GDP forecast and the increased unemployment rate forecast. See further discussion in “Loans Held-For-Investment and Allowance for Credit Losses.”

Noninterest Income

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table presents the components of noninterest income for the periods indicated:


	Three Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Service charges and fees on deposits	$	377	$	399	$	(22)	(5.5)	%
Loan servicing income	719		786		(67)		(8.5)	%
Bank-owned life insurance income	259		239		20		8.4	%
Gain on sale of loans	1,617		750		867		115.6	%

Other income	442		446		(4)		(0.9)	%
Total noninterest income	$	3,414	$	2,620	$	794	30.3	%

Loan servicing income decreased primarily due to a decrease in servicing fee income and an increase in servicing asset amortization. Servicing asset amortization was $528 thousand and $479 thousand, respectively, for the three months ended September 30, 2025 and 2024.

Gain on sale of loans increased primarily due to an increase in sale volume, partially offset by a decrease in level of premium on SBA loans in the secondary market. The Company sold SBA loans of $29.0 million with a gain of $1.6 million during the three months ended September 30, 2025. During the three months ended September 30, 2024, the Company sold SBA loans of $13.5 million with a gain of $750 thousand and a residential mortgage loan of $676 thousand at par.

Other income primarily included wire transfer fees of $180 thousand and $156 thousand, respectively, and debit card interchange fees of $100 thousand and $154 thousand, respectively, for the three months ended September 30, 2025 and 2024.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table presents the components of noninterest income for the periods indicated:


	Nine Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Service charges and fees on deposits	$	1,124	$	1,141	$	(17)	(1.5)	%
Loan servicing income	2,204		2,504		(300)		(12.0)	%
Bank-owned life insurance income	759		703		56		8.0	%
Gain on sale of loans	3,969		2,591		1,378		53.2	%

Other income	1,235		1,111		124		11.2	%
Total noninterest income	$	9,291	$	8,050	$	1,241	15.4	%

Loan servicing income decreased primarily due to a decrease in servicing fee income and an increase in servicing asset amortization. Servicing asset amortization was $1.6 million and $1.4 million, respectively, for the nine months ended September 30, 2025 and 2024.

Gain on sale of loans increased primarily due to an increase in sale volume, partially offset by a decrease in level of premium on SBA loans in the secondary market. The Company sold SBA loans of $72.6 million with a gain of $4.0 million during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, the Company sold SBA loans of $46.5 million with a gain of $2.6 million and a residential mortgage loan of $676 thousand at par.

Other income primarily included wire transfer fees of $506 thousand and $462 thousand, respectively, and debit card interchange fees of $303 thousand and $253 thousand, respectively, for the nine months ended September 30, 2025 and 2024.

Noninterest Expense

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The following table presents the components of noninterest expense for the periods indicated:


	Three Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Salaries and employee benefits	$	9,293	$	8,801	$	492	5.6	%
Occupancy and equipment	2,372		2,261		111		4.9	%
Professional fees	541		599		(58)		(9.7)	%
Marketing and business promotion	669		667		2		0.3	%
Data processing	333		397		(64)		(16.1)	%
Director fees and expenses	223		226		(3)		(1.3)	%
Regulatory assessments	373		309		64		20.7	%
Other expenses	1,065		1,342		(277)		(20.6)	%
Total noninterest expense	$	14,869	$	14,602	$	267	1.8	%

Salaries and employee benefits increased primarily due to increases in salaries, and bonus and vacation accruals, partially offset by a decrease in direct loan origination cost, which offsets and defers the recognition of salaries and benefits expense. The number of full-time equivalent employees was 270 at September 30, 2025 compared to 264 at September 30, 2024.

Professional fees decreased primarily due to professional fees incurred during the year-ago quarter related to a core system conversion that was completed in April 2024.

Data processing decreased primarily due to a decreased overall service charges after the core system conversion.

Regulatory assessments increased primarily due to an increase in the balance sheet.

Other expenses included $140 thousand and $97 thousand in loan related expenses, $467 thousand and $625 thousand in office expense, and $191 thousand and $221 thousand in armed guard expense for the three months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025, the Company recognized an impairment of operating lease assets of $10 thousand for a sublease contract.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The following table presents the components of noninterest expense for the periods indicated:


	Nine Months Ended September 30,				Amount Change		Percentage Change
($ in thousands)	2025		2024
Salaries and employee benefits	$	27,212	$	27,244	$	(32)	(0.1)	%
Occupancy and equipment	7,040		6,919		121		1.7	%
Professional fees	1,974		2,656		(682)		(25.7)	%
Marketing and business promotion	1,509		1,304		205		15.7	%
Data processing	983		1,294		(311)		(24.0)	%
Director fees and expenses	674		679		(5)		(0.7)	%
Regulatory assessments	1,075		934		141		15.1	%
Other expenses	3,705		5,099		(1,394)		(27.3)	%
Total noninterest expense	$	44,172	$	46,129	$	(1,957)	(4.2)	%

Salaries and employee benefits decreased primarily due to decreases in salaries and an increase in direct loan origination cost, partially offset by an increase in bonus accrual. The number of full-time equivalent employees was 270 at September 30, 2025 compared to 264 at September 30, 2024.

Professional fees decreased primarily due to professional fees incurred during the nine months ended September 30, 2024 related to a core system conversion that was completed in April 2024, partially offset by professional fees incurred during the three months ended June 30, 2025 related to evaluating the accounting for a preferred stock purchase option.

Marketing and business promotion expense increased primarily due to an increase in advertisements.

Data processing decreased primarily due to a decreased overall service charges after the core system conversion.

Regulatory assessments increased primarily due to an increase in the balance sheet.

Other expenses included $364 thousand and $315 thousand in loan related expenses, $1.6 million and $1.7 million in office expense, and $553 thousand and $635 thousand in armed guard expense for the nine months ended September 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025, the Company recognized impairments of operating lease assets of $238 thousand for sublease contracts and contingent liabilities for legal settlements of $183 thousand. During the nine months ended September 30, 2024, the Company recognized 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 guaranty.

Income Tax Expense

Income tax expense was $4.5 million and $2.9 million, respectively, and the effective tax rate was 28.2% and 26.9%, respectively, for the three months ended September 30, 2025 and 2024. For the nine months ended September 30, 2025 and 2024, income tax expense was $11.1 million and $7.2 million, respectively, and the effective tax rate was 28.3% and 27.7%, respectively.

Financial Condition

Investment Securities

The Company’s investment strategy aims to maximize earnings while maintaining liquidity in securities with minimal credit risk. The types and maturities of securities purchased are primarily based on current and projected liquidity and interest rate sensitivity positions.

The following table presents the amortized cost and fair value of the investment securities available-for-sale portfolio as of the dates indicated:


	September 30, 2025						December 31, 2024
($ in thousands)	Amortized Cost		Fair Value		Net Unrealized Gain (Loss)		Amortized Cost		Fair Value		Net Unrealized Loss
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise securities:
Residential mortgage-backed securities	$	125,921	$	119,320	$	(6,601)	$	123,209	$	112,439	$	(10,770)
Residential collateralized mortgage obligations	20,071		19,263		(808)		22,753		21,237		(1,516)
SBA loan pool securities	4,631		4,428		(203)		6,328		6,008		(320)
Municipal bonds	2,460		2,467		7		2,452		2,420		(32)
Corporate bonds	5,000		4,801		(199)		5,000		4,245		(755)
Total securities available-for-sale	$	158,083	$	150,279	$	(7,804)	$	159,742	$	146,349	$	(13,393)

The fair value of total investment securities available-for-sale were $150.3 million at September 30, 2025, an increase of $3.9 million, or 2.7%, from $146.3 million at December 31, 2024. The increase was primarily due to purchases of $14.9 million and an increase in fair value of securities available-for-sale of $5.6 million, partially offset by principal paydowns of $16.4 million and net premium amortization of $108 thousand.

As of September 30, 2025 and December 31, 2024, 95.3% 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. 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 September 30, 2025 and December 31, 2024.

As of September 30, 2025 and December 31, 2024, the Company recorded no ACL on securities available-for-sale.

The following table presents the contractual maturity schedule for securities, at amortized cost, and their weighted-average yields as of the date indicated:


	September 30, 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:
Residential mortgage-backed securities	$	12	1.36	%	$	1,709	1.53	%	$	10,747	1.75	%	$	113,453	3.90	%	$	125,921	3.68	%
Residential collateralized mortgage obligations	—		—	%	5,753		4.64	%	9		2.44	%	14,309		3.29	%	20,071		3.67	%
SBA loan pool securities	—		—	%	690		4.31	%	1,676		2.55	%	2,265		3.40	%	4,631		3.23	%
Municipal bonds	—		—	%	83		3.00	%	1,501		3.50	%	876		3.68	%	2,460		3.55	%
Corporate bonds	—		—	%	—		—	%	5,000		3.75	%	—		—	%	5,000		3.75	%
Total securities available-for-sale	$	12	1.36	%	$	8,235	3.95	%	$	18,933	2.49	%	$	130,903	3.82	%	$	158,083	3.67	%

Weighted-average yields are based upon the amortized cost of securities and are calculated using the interest method which takes into consideration of premium amortization and discount accretion. Weighted-average yields on tax-exempt debt securities exclude the federal income tax benefit.

Loans Held-For-Sale

Loans held-for-sale are carried at the lower of cost or fair value. When a determination is made at the time of commitment to originate as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the foreseeable future, subject to periodic reviews under the Company’s management evaluation processes, including asset/liability management and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred to held-for-sale at the lower of cost or fair value. Certain loans are transferred to held-for-sale with write-downs to the allowance for credit losses on loans.

Loans held-for-sale were $9.6 million at September 30, 2025, an increase of $3.3 million, or 53.1%, from $6.3 million at December 31, 2024. The increase was primarily due to new funding of $76.2 million, partially offset by sales of $72.6 million and pay-offs and pay-downs of $248 thousand.

Loans Held-For-Investment and Allowance for Credit Losses

The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated:


	September 30, 2025					December 31, 2024
($ in thousands)	Amount			Percentage to Total		Amount			Percentage to Total
Commercial real estate:
Commercial property	$	1,039,965		37.8	%	$	940,931		35.9	%
Business property	639,596			23.2	%	595,547			22.6	%
Multifamily	172,098			6.3	%	194,220			7.4	%
Construction	25,911			0.9	%	21,854			0.8	%
Total commercial real estate	1,877,570			68.2	%	1,752,552			66.7	%
Commercial and industrial	465,424			16.9	%	472,763			18.0	%
Consumer:
Residential mortgage	401,653			14.6	%	392,456			14.9	%
Other consumer	7,867			0.3	%	11,616			0.4	%
Total consumer	409,520			14.9	%	404,072			15.3	%
Loans held-for-investment	2,752,514			100.0	%	2,629,387			100.0	%
Allowance for credit losses on loans	(32,960)					(30,628)
Net loans held-for-investment	$	2,719,554				$	2,598,759

ACL on loans to loans held-for-investment	1.20		%			1.16		%

Loans held-for-investment were $2.75 billion at September 30, 2025, an increase of $123.1 million, or 4.7%, from $2.63 billion at December 31, 2024. The increase was primarily due to new funding of term loans of $443.1 million and net increase of lines of credit of $19.3 million, partially offset by pay-downs and pay-offs of term loans of $299.8 million and charge-offs of $927 thousand.

The following table presents activities in ACL for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2025		2024		2025		2024
ACL on loans
Balance at beginning of period	$	33,554	$	28,747	$	30,628	$	27,533
Charge-offs	(454)		(111)		(927)		(296)
Recoveries	288		101		375		249
Provision for credit losses on loans	(428)		193		2,884		1,444
Balance at end of period	$	32,960	$	28,930	$	32,960	$	28,930
ACL on off-balance sheet credit exposures
Balance at beginning of period	$	1,263	$	1,375	$	1,190	$	1,277
Provision for credit losses on off-balance sheet credit exposure	47		(143)		120		(45)
Balance at end of period	$	1,310	$	1,232	$	1,310	$	1,232

The decrease for the three months ended September 30, 2025 was primarily due to decreases in loans held-for-investment.

The increase for the nine months ended September 30, 2025 was primarily due to increases in loans held-for-investment and quantitatively measured loss reserve requirement from the worsened year-over-year change in real GDP forecast and the increased unemployment rate forecast. The increase in the quantitatively measured loss reserve requirement was primarily due to the worsened year-over-year change in real GDP forecast and the increased unemployment rate forecast. The Company utilizes these forecasts published by the Federal Open Market Committee (“FOMC”). The 2025 year-end year-over-year change in forecasted real GDP decreased to 1.6% in the September 2025 FOMC meeting from 2.1% in December 2024. The forecasted year-end national unemployment rate increased to 4.5% in September 2025 FOMC meeting from 4.3% in December 2024. Overall changes in macroeconomic projections resulted in the increases of probability of default and loss given default rates across majority of the loan segments leading to higher overall expected loss measurements.

Loans individually evaluated for impairment totaled $51.5 million and $52.0 million, respectively, and related reserve totaled $426 thousand and $59 thousand, respectively, at September 30, 2025 and December 31, 2024.

Management believes that the projections used are reasonable and align with the Company’s expectation of the economic environment over the next 4 quarters.

The following tables present net charge-offs (recoveries) as a percentage to the average loans held-for-investment balances in each of the loan segments for the periods indicated:


	Three Months Ended September 30,
	2025						2024
($ in thousands)	Average Balance		Net Charge-Offs (Recoveries)		Percentage		Average Balance		Net Charge-Offs (Recoveries)		Percentage
Commercial real estate:
Commercial property	$	927,979	$	—	—	%	$	840,158	$	—	—	%
Business property	763,592		306		0.15	%	600,435		103		0.07	%
Multifamily	166,206		—		—	%	129,307		—		—	%
Construction	27,636		—		—	%	30,528		—		—	%
Total commercial real estate	1,885,413		306		0.05	%	1,600,428		103		0.03	%
Commercial and industrial	471,871		(140)		(0.12)	%	401,268		(8)		(0.01)	%
Consumer:
Residential mortgage	402,225		—		—	%	386,490		—		—	%
Other consumer	8,668		—		—	%	19,000		(85)		(1.79)	%
Total consumer	410,893		—		—	%	405,490		(85)		(0.08)	%
Total	$	2,768,177	$	166	0.02	%	$	2,407,186	$	10	0.01	%

	Nine Months Ended September 30,
	2025						2024
($ in thousands)	Average Balance		Net Charge-Offs (Recoveries)		Percentage		Average Balance		Net Charge-Offs (Recoveries)		Percentage
Commercial real estate:
Commercial property	$	922,750	$	—	—	%	$	854,822	$	—	—	%
Business property	708,970		304		0.06	%	584,282		101		0.02	%
Multifamily	184,978		—		—	%	146,934		—		—	%
Construction	25,127		—		—	%	27,756		—		—	%
Total commercial real estate	1,841,825		304		0.02	%	1,613,794		101		0.01	%
Commercial and industrial	469,134		177		0.05	%	386,714		68		0.02	%
Consumer:
Residential mortgage	403,195		—		—	%	386,845		—		—	%
Other consumer	9,839		71		0.96	%	18,334		(122)		(0.89)	%
Total consumer	413,034		71		0.02	%	405,179		(122)		(0.04)	%
Total	$	2,723,993	$	552	0.03	%	$	2,405,687	$	47	0.01	%

Nonperforming Loans and Nonperforming Assets

The following table presents a summary of total non-performing assets as of the dates indicated:


($ in thousands)	September 30, 2025			December 31, 2024			Amount Change		Percentage Change
Nonaccrual loans held-for-investment
Commercial real estate:
Commercial property	$	1,448		$	1,851		$	(403)	(21.8)	%
Business property	962			2,336			(1,374)		(58.8)	%


Total commercial real estate	2,410			4,187			(1,777)		(42.4)	%
Commercial and industrial	378			79			299		378.5	%
Consumer:
Residential mortgage	5,370			403			4,967		1,232.5	%
Other consumer	—			24			(24)		(100.0)	%
Total consumer	5,370			427			4,943		1,157.6	%
Total nonaccrual loans	8,158			4,693			3,465		73.8	%
Loans past due 90 days or more still on accrual	—			—			—		—	%
Nonperforming loans	8,158			4,693			3,465		73.8	%
Nonperforming loans held-for-sale	—			—			—		—	%
Total nonperforming loans	8,158			4,693			3,465		73.8	%
Other real estate owned	—			—			—		—	%
Nonperforming assets	$	8,158		$	4,693		$	3,465	73.8	%

Nonaccrual loans to loans held-for-investment	0.30		%	0.18		%
Nonperforming assets to total assets	0.24		%	0.15		%
ACL on loans to nonaccrual loans	404.02		%	652.63		%

The increase in nonaccrual loans held-for-investment was primarily due to loans placed on nonaccrual status of $6.0 million, partially offset by paydowns and payoffs of $2.1 million and charge-offs of $377 thousand during the nine months ended September 30, 2025.

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. In all cases, loans are placed on nonaccrual if collection of principal or interest is considered doubtful. Past due loans may or may not be adequately collateralized, but collection efforts are continuously pursued. Loans may be restructured by management when a borrower experiences changes to their financial condition, causing an inability to meet the original repayment terms, and where management believes the borrower will eventually overcome those circumstances and repay the loan in full. Additional income of approximately $177 thousand and $509 thousand would have been recorded during the three and nine months ended September 30, 2025, respectively, had these loans been paid in accordance with their original terms throughout the periods indicated.

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:


($ in thousands)	September 30, 2025		December 31, 2024		Amount Change		Percentage Change
Noninterest-bearing demand deposits	$	551,312	$	547,853	$	3,459	0.6	%
Interest-bearing deposits:
Savings	5,287		5,765		(478)		(8.3)	%
NOW	13,411		13,761		(350)		(2.5)	%
Retail money market accounts	650,675		447,360		203,315		45.4	%
Brokered money market accounts	1		1		—		—	%
Retail time deposits of:
$250,000 or less	580,300		493,644		86,656		17.6	%
More than $250,000	671,516		605,124		66,392		11.0	%

Brokered time deposits	381,000		442,283		(61,283)		(13.9)	%
Time deposits from California State Treasurer	60,000		60,000		—		—	%
Total interest-bearing deposits	2,362,190		2,067,938		294,252		14.2	%
Total deposits	$	2,913,502	$	2,615,791	$	297,711	11.4	%

Estimated total deposits not covered by deposit insurance	$	1,275,127	$	1,036,451	238,676		23.0	%
Estimated time deposits not covered by deposit insurance	$	519,787	$	459,835	59,952		13.0	%

The increase in retail time deposits was primarily due to new accounts of $394.8 million and renewals of the matured accounts of $845.2 million, partially offset by matured and closed accounts of $1.12 billion.

As of September 30, 2025 and December 31, 2024, total deposits were comprised of 18.9% and 20.9%, respectively, of noninterest-bearing demand accounts, 23.0% and 17.9%, respectively, of savings, NOW and money market accounts, and 58.1% and 61.2%, respectively, of time deposits.

Deposits from certain officers, directors and their related interests with which they are associated held by the Company were $10.4 million and $6.0 million, respectively, at September 30, 2025 and December 31, 2024.

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
September 30, 2025
Time deposits of $250,000 or less	$	395,734	$	238,002	$	326,432	$	1,131	$	961,299
Time deposits of more than $250,000	226,890		293,366		208,738		2,523		731,517
Total	$	622,624	$	531,368	$	535,170	$	3,654	$	1,692,816
Not covered by deposit insurance	$	149,730	$	219,945	$	148,024	$	2,088	$	519,787
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

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.

Shareholders’ equity was $384.5 million at September 30, 2025, an increase of $20.7 million, or 5.7%, from $363.8 million at December 31, 2024. The increase was primarily due to net income of $28.2 million, a decrease in accumulated other comprehensive loss of $3.9 million and proceeds from stock option exercises of $1.7 million, partially offset by dividends declared on common stock of $8.6 million, repurchases of common stock of $5.0 million and preferred stock dividends of $213 thousand.

Regulatory Capital Requirements

The following table presents a summary of the minimum capital adequacy requirements applicable to the Company and the Bank and the minimum capital requirements for the Bank to be considered “well-capitalized” from a regulatory perspective as of the dates indicated:


	PCB Bancorp		PCB Bank		Minimum Regulatory Requirements		Well Capitalized Requirements
September 30, 2025
Common tier 1 capital (to risk-weighted assets)	11.52	%	13.61	%	4.5	%	6.5	%
Total capital (to risk-weighted assets)	15.24	%	14.85	%	8.0	%	10.0	%
Tier 1 capital (to risk-weighted assets)	14.00	%	13.61	%	6.0	%	8.0	%
Tier 1 capital (to average assets)	11.57	%	11.25	%	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	%

To avoid restrictions on dividends, share repurchases and discretionary compensation payments to executives, the federal banking agencies require a banking organization to maintain a capital conservation buffer of 2.50% in common tier 1 capital, in addition to the minimum capital ratios adequacy requirements. The capital conservation buffer increases the minimum common equity Tier 1 capital ratio to 7%, the minimum Tier 1 capital (to risk-weighted assets) ratio to 8.5% and the minimum total capital ratio (to risk-weighted assets) to 10.5% for banking organizations seeking to avoid the limitations on dividends, share repurchases and discretionary compensation payments to executives. The Company’s and the Bank’s capital conservation buffers were 7.02% and 6.85%, respectively, as of September 30, 2025, and 6.94% and 6.92%, respectively, as of December 31, 2024.

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. Treasury under the ECIP. The ECIP investment qualifies as tier 1 capital for purposes of the bank regulatory capital requirements.

The Series C Preferred Stock accrued no dividend for the first 24 months following the investment date. 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. Dividends are payable quarterly in arrears on March 15, June 15, September 15, and December 15.

The Series C Preferred Stock may be redeemed at the option of the Company on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.

On January 16, 2025, the Company entered into 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 price for the Preferred Stock under the Option Agreement is based on a formula equal to the present value of the Preferred Stock, calculated as set forth in the Option Agreement, together with any accrued and unpaid dividends thereon and could represent a discount from the Series C Preferred Stock’s liquidation amount.

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 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 loan 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. In addition to satisfying a Threshold Condition, the Option Agreement requires that the Company meet certain other eligibility conditions in order to exercise the purchase option in the future, including compliance with the terms of the original ECIP purchase agreement and the terms of the Series C Preferred Stock, maintaining qualification as either a certified community development financial institution or a minority depository institution and satisfying other legal and regulatory criteria.

The following table presents the estimated purchase price based on the formula set forth in the Option Agreement as if the Company meet all Threshold Conditions as of September 30, 2025:


	Dividend Rate at the Reset Date Immediately Preceding the Purchase Date
($ in thousands)	0.50%		1.25%		2.00%
Purchase price	$	4,795	$	11,987	$	19,179
Discount	64,346		57,154		49,962

The Company began paying quarterly dividends on the Series C Preferred Stock beginning in the three months ended June 30, 2024. Dividends on the Series C Preferred Stock totaled $86 thousand and $346 thousand for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, Dividends on the Series C Preferred Stock totaled $213 thousand and $488 thousand, respectively.

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 under a stock repurchase program approved by the Board of Directors on August 2, 2023 authorizing the repurchase of up to 720,000 shares. On July 23, 2025, the Company announced that the term of the stock repurchase program would be extended to July 31, 2026.

During the nine months ended September 30, 2025, the Company repurchased and retired 255,767 shares of common stock at a weighted-average price of $19.41 per share. As of September 30, 2025, the Company was authorized to purchase 322,010 additional shares under the stock repurchase program.

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 cash flow and capital and strategic cash flow needs, all at a reasonable cost. The Company continuously monitors its liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of the Company’s shareholders.

The Company’s liquidity position is supported by management of liquid assets and liabilities and access to alternative sources of funds. Liquid assets include cash, interest-bearing deposits in financial institutions, federal funds sold, and unpledged securities available-for-sale. Liquid liabilities may include core deposits, federal funds purchased, securities sold under repurchase agreements and other borrowings. Other sources of liquidity include the sale of loans, the ability to acquire additional national market non-core deposits, additional collateralized borrowings such as FHLB advances and Federal Reserve Discount Window, and the issuance of debt securities and preferred or common securities.

The Company’s short-term and long-term liquidity requirements are primarily to fund on-going operations, including payment of interest on deposits and debt, extensions of credit to borrowers, capital expenditures and shareholder dividends. These liquidity requirements are met primarily through cash flow from operations, redeployment of prepaying and maturing balances in loan and investment securities portfolios, increases in debt financing and other borrowings, and increases in customer deposits.

Integral to the Company’s liquidity management is the administration of borrowings. To the extent the Company is unable to obtain sufficient liquidity through core deposits, the Company seeks to meet its liquidity needs through wholesale funding or other borrowings on either a short or long-term basis.

The following table presents a summary of the Company’s liquidity position as of the dates indicated:


($ in thousands)	September 30, 2025			December 31, 2024			Amount Change		Percentage Change
Cash and cash equivalents	$	369,498		$	198,792		$	170,706	85.9	%
Cash and cash equivalents to total assets	11.0		%	6.5		%

Available borrowing capacity:
FHLB advances	$	826,136		$	722,439		103,697		14.4	%
Federal Reserve Discount Window	808,651			586,525			222,126		37.9	%
Overnight federal funds lines	65,000			50,000			15,000		30.0	%
Total	$	1,699,787		$	1,358,964		$	340,823	25.1	%
Total available borrowing capacity to total assets	50.5		%	44.4		%

The Company also maintains relationships in the capital markets with brokers and dealers to issue time deposits and money market accounts.

PCB Bancorp, on a stand-alone holding company basis, must provide for its own liquidity and its main source of funding is dividends from the Bank. There are statutory, regulatory and debt covenant limitations that affect the ability of the Bank to pay dividends to the holding company. Management believes that these limitations will not impact the Company’s ability to meet its ongoing short- and long-term cash obligations.

Off-Balance Credit Exposures and Contractual Obligations

Off-Balance Sheet Credit Exposures

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.

In the ordinary course of business, the Company enters into financial commitments to meet the financing needs of its customers. These financial commitments include commitments to extend credit, unused lines of credit, commercial and similar letters of credit and standby letters of credit. Those instruments involve to varying degrees, elements of credit and interest rate risk not recognized in the Company’s financial statements.

The Company’s exposure to loan loss in the event of nonperformance on these financial commitments is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for loans reflected in the consolidated financial statements.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. The Company evaluates each client’s credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary is based on management’s credit evaluation of the customer. The following table presents outstanding financial commitments whose contractual amount represents credit risk as of the dates indicated:


	September 30, 2025				December 31, 2024
($ in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Unused lines of credit	$	13,127	$	383,376	$	12,923	$	370,313
Unfunded loan commitments	—		10,614		—		17,339
Standby letters of credit	5,479		1,595		5,279		1,516

Total	$	18,606	$	395,585	$	18,202	$	389,168

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
September 30, 2025
Time deposits	$	1,689,162	$	3,526	$	128	$	—	$	1,692,816


Operating leases	3,509		6,055		5,445		8,237		23,246
Total	$	1,692,671	$	9,581	$	5,573	$	8,237	$	1,716,062
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. 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.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss due to changes in market values of assets and liabilities. Market risk occurs in the normal course of business through exposures to market interest rates, equity prices, and credit spreads.

Overview

Interest rate risk is the risk to earnings and value arising from changes in market interest rates. Interest rate risk arises from timing differences in the repricings and maturities of interest-earning assets and interest-bearing liabilities (repricing risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S. Treasuries and Secured Overnight Financing Rate (“SOFR”) (basis risk).

The Company’s Board Asset Liability Committee (“ALCO”) establishes broad policy limits with respect to interest rate risk. Board ALCO establishes specific operating guidelines within the parameters of the Board of Directors’ policies. In general, the Company seeks to minimize the impact of changing interest rates on net interest income and the economic values of assets and liabilities. Board ALCO meets quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the Board of Directors’ approved risk limits. The Company also has a Management ALCO, which is comprised of the senior management team and the Chief Executive Officer, to proactively monitor interest rate risk.

Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment and funding activities. Effective management of interest rate risk begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk posture given business forecasts, management objectives, market expectations, and policy constraints.

An asset sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate higher net interest income, as rates earned on interest-earning assets would reprice upward more quickly than rates paid on interest-bearing liabilities, thus expanding net interest margin. Conversely, a liability sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate lower net interest income, as rates paid on interest-bearing liabilities would reprice upward more quickly than rates earned on interest-earning assets, thus compressing net interest margin.

Measurement

Interest rate risk exposure is measured and monitored through various risk management tools, which include a simulation model that performs interest rate sensitivity analyses under multiple interest rate scenarios. Interest rate risk measurement is calculated and reported to the Board ALCO at least quarterly. The information reported includes period-end results and identifies any policy limits exceeded, along with an assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of the risk.

The Company uses two approaches to model interest rate risk: Net Interest Income at Risk (“NII at Risk”), and Economic Value of Equity (“EVE”). Under NII at Risk, net interest income is modeled utilizing various assumptions for assets, liabilities, and derivatives. The Company uses a static balance sheet to perform these analyses. EVE measures the period end market value of assets minus the market value of liabilities and the change in this value as rates change. EVE simulation reflects the effect of interest rate shifts on the value of the Company. In contrast to NII simulation, EVE simulation identifies risks arising from repricing or maturity gaps over the life of the balance sheet. The EVE approach provides a comparatively broader scope than the NII at Risk approach since it captures all anticipated cash flows.

Simulation results are highly dependent on input assumptions. To the extent the actual behavior is different from the assumption used in the models, there could be material changes in results. The assumptions applied in the model are documented, supported, and periodically back-tested to assess the reasonableness and effectiveness. The Company makes appropriate changes to the model as needed and these changes are reviewed by Board and Management ALCOs. The Company also continuously validates the model, methodology and results. Scenario results do not reflect strategies that the management could employ to limit the impact of changing interest rate expectations.

The model incorporates deposit repricing assumptions impacting both consumer and wholesale deposits, deposit behavior assumption related to its non-maturity deposits, and prepayment assumptions related to its loan portfolio. The model modifications incorporated observed pricing and customer behavior in both rising and falling interest rate environments. As part of the Company’s continuous evaluation and periodic enhancements to its NII and EVE calculations, the model is updated annually and was last evaluated during the three months ended September 30, 2024.

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 as of the dates indicated, but without giving effect to any steps that management might take to counteract changes:


	September 30, 2025				December 31, 2024
Simulated Rate Changes	Net Interest Income Sensitivity		Economic Value of Equity Sensitivity		Net Interest Income Sensitivity		Economic Value of Equity Sensitivity

+200	7.0	%	(3.5)	%	9.5	%	(4.1)	%
+100	3.5	%	(1.1)	%	4.7	%	(1.9)	%
-100	(5.8)	%	(1.3)	%	(6.2)	%	(1.1)	%
-200	(11.6)	%	(5.0)	%	(12.8)	%	(4.5)	%

On September 17, 2025, the FOMC lowered the upper range of the Fed Funds Target Rate to 4.25%. The Committee noted that recent indicators suggest growth of economic activity moderated in the first half of the year. Job gains have slowed, and unemployment rate has edged up but remain low. They added that uncertainty about the economic outlook remains elevated. The Committee remains attentive to the risks to both sides of its dual mandate but judges that downside risks to employment have risen. The Committee added that in considering the extent and timing of additional adjustment to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and balance of risks.

As of September 30, 2025, the Company’s net interest income sensitivity results exhibit an asset sensitive profile. Net interest income is expected to increase when interest rates rise, as the Company has a large proportion of variable rate loans in its loan portfolio, primarily linked to Prime Rate indices, that are sensitive to changes in short-term interest rates. The Company’s deposit portfolio is also sensitive to changes in short-term interest rates, even though a large portion of its deposit mix is composed of non-maturity deposits that are not directly tied to short-term interest rate indices. The modeled results are highly sensitive to reinvestment yield and deposit beta assumptions. Actual results in net interest income during a period of rising interest rates may vary from the Company’s net interest income sensitivity analysis, as the actual result reflects earnings asset growth and deposit mix changes based on customer preferences relative to the interest rate environment.

The Company’s EVE sensitivity reflects a slight liability sensitive profile. 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 analysis.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as of September 30, 2025 was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. Based on the evaluation, management concluded that the Company’s disclosure controls and procedures were ineffective as of September 30, 2025 because of a material weakness related to the Company’s internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis. Management identified the following material weakness in the Company’s internal control over financial reporting:

• The Company has not designed and maintained all applicable internal controls to ensure that unusual or infrequent derivative contracts are evaluated for proper accounting treatment and disclosure.

Management initially identified this material weakness during the preparation of the Company ’s financial statements for the three months ended March 31, 2025, as reported in Item 4 to the Company’s Quarterly Report on Form 10-Q/A for such period.

Remediation Plans

Since identifying this material weakness, management has been developing and implementing a remediation plan to address the material weakness, which may include, among other things, having its Controller's office search and review all contract with potential accounting implication and disclosure committee discuss and review all new unusual or infrequent derivative or financial contracts each quarter, and engaging a third party to assist in the evaluation of accounting matters with respect to such transactions that could have a potential impact on the Company’s financial statements.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - Other Information

Item 1 - Legal Proceedings

In the normal course of business, the Company is involved in various legal claims. Management has reviewed all legal claims against the Company with counsel and have taken into consideration the views of such counsel as to the potential outcome of the claims in determining the accrued loss contingency. The Company had accrued loss contingencies for legal claims of $190 thousand at September 30, 2025. It is reasonably possible the Company may incur losses in addition to the amounts currently accrued. However, at this time, the Company is unable to estimate the range of additional losses that are reasonably possible because of a number of factors, including the fact that certain of these litigation matters are still in their early stages and involve claims for which, at this point, the Company believes have little to no merit. Management has considered these and other possible loss contingencies and does not expect the amounts to be material to the consolidated financial statements.

Item 1A - Risk Factors

Management is not aware of any material changes to the risk factors that appeared under “Part I, Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, other than those additional risks described below. You should carefully consider such risks and the other information in this Quarterly Report on Form 10-Q, any of which could materially and adversely affect the Company’s business, financial condition, results of operations and stock price. The risks described in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not presently known to management or that management presently believes not to be material may also result in material and adverse effects on the Company’s business, financial condition, and results of operations.

The Company has identified a material weakness in its internal control over financial reporting.

As disclosed in “Part I - Item 4. Controls and Procedures,” of this Quarterly Report on Form 10-Q, management has identified a material weakness in the Company’s internal control over financial reporting. As a result, management concluded that the Company’s internal control over financial reporting and disclosure controls and procedures were not effective as of September 30, 2025. The Company is working to remediate the material weakness. However, there can be no assurance that these remediation efforts will be successful. In addition, these remediation efforts may place a burden on management and may result in additional expenses.

The Company cannot assure that additional significant deficiencies or material weaknesses in its internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties the Company experiences in their implementation, could result in additional material weaknesses, cause the Company to fail to meet its periodic SEC reporting obligations or result in material misstatements to its financial statements in future periods, any of which could cause investors or customers to lose confidence in the Company’s reported financial information, a decline in the trading price of the Company’s common stock or a delisting of the Company’s common stock from the Nasdaq Stock Market.

The Company may not qualify to repurchase its Series C Preferred Stock on favorable terms.

On May 24, 2022, the Company sold shares of its Series C Preferred Stock to the U.S. 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.

Under terms of an ECIP Securities Purchase Option Agreement by between the Company and Treasury, if the Company meets certain conditions, the Company or the Company’s qualifying designee may repurchase the Series C Preferred Stock, potentially at a substantial discount (the “Repurchase Option”). To be eligible to exercise the Repurchase Option, the Company 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. The earliest possible date by which the Company could exercise the repurchase options (assuming it meets all required conditions) is June 30, 2026. There can be no assurance that the Company will ever satisfy the lending and other requirements necessary to exercise the Repurchase Option.

For additional information, see Note 9 to the Company’s Consolidated Financial Statements (Unaudited) included in this Quarterly Report on Form 10-Q.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the three months ended September 30, 2025.

The 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 July 1, 2025 to July 31, 2025	—	$	—	—	428,473
From August 1, 2025 to August 31, 2025	85,812	$	21.02	85,812	342,661
From September 1, 2025 to September 30, 2025	20,651	$	21.24	20,651	322,010
Total	106,463	$	21.06	106,463

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 nine months ended September 30, 2025, the Company repurchased and retired 255,767 shares of common stock at a weighted-average price of $19.41 per share.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 - Mine Safety Disclosures

Not applicable.

Item 5 - Other Information

During the three months ended September 30, 2025, no officer or director of the Company adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities of the Company’s common stock that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement as defined in 17 CFR § 229.408(c).

Item 6 - Exhibits

Exhibit Number

Description

Form

File No.

Exhibit

Filing Date

3.1

Articles of Incorporation of PCB Bancorp, as amended

10-Q

001-38621

3.1

August 8, 2019

3.2

Bylaws of PCB Bancorp

8-K

001-38621

3.1

May 23, 2024

3.3

Certificate of Determination for Senior Non-Cumulative Perpetual Preferred Stock, Series C

8-K

001-38621

3.1

May 24, 2022

4.1

Specimen common stock certificate of PCB Bancorp

10-Q

001-38621

4.1

August 8, 2019

4.2

Description of Capital Stock

10-Q

001-38621

4.2

August 4, 2022

4.3

Form of Certificate for Senior Non-Cumulative Perpetual Preferred Stock, Series C

8-K

001-38621

4.1

May 24, 2022

10.1

Employment Agreement, dated January 1, 2018, between Pacific City Financial Corporation and Henry Kim

S-1

333-226208

10.1

July 17, 2018

10.1A

First Amendment to Employment Agreement, dated August 26, 2021, among PCB Bancorp, Pacific City Bank and Henry Kim

10-Q

001-38621

10.1A

November 8, 2021

10.1B

Second Amendment to Employee Agreement, dated December 28, 2021, among PCB Bancorp, Pacific City Bank and Henry Kim

10-K

001-38621

10.1B

March 4, 2022

10.1C

Third Amendment to Employee Agreement, dated December 28, 2023, among PCB Bancorp, PCB Bank and Henry Kim

10-Q

001-38621

10.1C

June 9, 2025

10.2

2023 Equity Based Compensation Plan

S-8

333-272874

4.1

June 23, 2023

10.3

Form of Stock Option Award Agreement under 2023 Equity Based Compensation Plan

8-K

001-38621

10.1

July 27, 2023

10.4

Form of Restricted Stock Award Agreement under 2023 Equity Based Compensation Plan

8-K

001-38621

10.2

July 27, 2023

10.5

2013 Equity Based Compensation Plan, as amended

S-1

333-226208

10.2

July 17, 2018

10.6

Form of Stock Option Award Agreement under 2013 Equity Based Compensation Plan

S-1

333-226208

10.3

July 17, 2018

10.7

Form of Restricted Stock Award Agreement under 2013 Equity Based Compensation Plan

S-1

333-226208

10.4

July 17, 2018

10.8

Letter Agreement, dated May 24, 2022, between PCB Bancorp and the U.S. Department of Treasury, with respect to the issuance of Senior Non-Cumulative Perpetual Preferred Stock, Series C

8-K

001-38621

10.1

May 24, 2022

10.9

ECIP Securities Purchase Option Agreement between PCB Bancorp and the U.S. Department of the Treasury dated January 16, 2025

10-K

001-38621

10.1

March 13, 2025

Insider Trading Policy

10-K

001-38621

10.1

March 13, 2025

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

PCB Bancorp Compensation Clawback Policy dated March 11, 2024

10-K

001-38621

March 12, 2024

101.INS

The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document*

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document*

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document*

104

Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)*

* Filed herewith

** Furnished herewith

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		PCB Bancorp

Date:	November 7, 2025	/s/ Henry Kim
		Henry Kim
		President and Chief Executive Officer (Principal Executive Officer)

Date:	November 7, 2025	/s/ Timothy Chang
		Timothy Chang
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

TABLE OF CONTENTS

Part I - Financial Information Item 1 - Consolidated Financial Statements Note 1 - Basis Of Presentation and Significant Accounting Policies Note 2 - Fair Value Measurements Note 3 - Investment Securities Note 4 - Loans and Allowance For Credit Losses on Loans Note 5. Other Real Estate Owned Note 6 - Servicing Assets Note 7 - Operating Leases Note 8 - Federal Home Loan Bank Advances and Other Borrowings Note 9 - Shareholders Equity Note 10 - Share-based Compensation Note 11 - Income Taxes Note 12 - Earnings Per Share Note 13 - Off-balance Sheet Credit Exposures, Commitments and Other Contingencies Note 14 - Regulatory Matters Note 15 - Revenue Recognition Note 16 - Segment Information Note 17 - Subsequent Events Item 2 - Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3 - Quantitative and Qualitative Disclosures About Market Risk Item 4 - Controls and Procedures Part II - Other Information Item 1 - Legal Proceedings Item 1A - Risk Factors Item 2 - Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3 - Defaults Upon Senior Securities Item 4 - Mine Safety Disclosures Item 5 - Other Information Item 6 - Exhibits

Exhibits

3.1 Articles of Incorporation of PCB Bancorp, as amended 10-Q 001-38621 3.1 August 8, 2019 3.2 Bylaws of PCB Bancorp 8-K 001-38621 3.1 May 23, 2024 3.3 Certificate of Determination for Senior Non-Cumulative Perpetual Preferred Stock, Series C 8-K 001-38621 3.1 May 24, 2022 4.1 Specimen common stock certificate of PCB Bancorp 10-Q 001-38621 4.1 August 8, 2019 4.2 Description of Capital Stock 10-Q 001-38621 4.2 August 4, 2022 4.3 Form of Certificate for Senior Non-Cumulative Perpetual Preferred Stock, Series C 8-K 001-38621 4.1 May 24, 2022 10.1 Employment Agreement, dated January1, 2018, between Pacific City Financial Corporation and Henry Kim S-1 333-226208 10.1 July 17, 2018 10.1A First Amendment to Employment Agreement, dated August26, 2021, among PCB Bancorp, Pacific City Bank and Henry Kim 10-Q 001-38621 10.1A November 8, 2021 10.1B Second Amendment to Employee Agreement, dated December28, 2021, among PCB Bancorp, Pacific City Bank and Henry Kim 10-K 001-38621 10.1B March 4, 2022 10.1C Third Amendment to Employee Agreement, dated December28, 2023, among PCB Bancorp, PCB Bank and Henry Kim 10-Q 001-38621 10.1C June 9, 2025 10.2 2023 Equity Based Compensation Plan S-8 333-272874 4.1 June 23, 2023 10.3 Form of Stock Option Award Agreement under 2023 Equity Based Compensation Plan 8-K 001-38621 10.1 July 27, 2023 10.4 Form of Restricted Stock Award Agreement under 2023 Equity Based Compensation Plan 8-K 001-38621 10.2 July 27, 2023 10.5 2013 Equity Based Compensation Plan, as amended S-1 333-226208 10.2 July 17, 2018 10.6 Form of Stock Option Award Agreement under 2013 Equity Based Compensation Plan S-1 333-226208 10.3 July 17, 2018 10.7 Form of Restricted Stock Award Agreement under 2013 Equity Based Compensation Plan S-1 333-226208 10.4 July 17, 2018 10.8 Letter Agreement, dated May 24, 2022, between PCB Bancorp and the U.S. Department of Treasury, with respect to the issuance of Senior Non-Cumulative Perpetual Preferred Stock, Series C 8-K 001-38621 10.1 May 24, 2022 10.9 ECIP Securities Purchase Option Agreement between PCB Bancorp and the U.S. Department of the Treasury dated January 16, 2025 10-K 001-38621 10.1 March 13, 2025 19 Insider Trading Policy 10-K 001-38621 10.1 March 13, 2025 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 97 PCB Bancorp Compensation Clawback Policy dated March 11, 2024 10-K 001-38621 97 March 12, 2024

PCB 10-Q Quarter ended Sept. 30, 2025

Exhibits