As of March 31, 2025, 81.02% of the Company’s total loan portfolio consisted of real estate loans, with commercial real estate loans representing 77.6% of total loans. The Company’s real estate loans and construction loans are secured by real properties primarily located in California. As of March 31, 2025, $437.3 million, or 6.70% of the total commercial real estate loans included loans secured by farmland, compared to $449.8 million, or 6.91%, at December 31, 2024. The loans secured by farmland included $103.6 million for loans secured by dairy & livestock land and $333.7 million secured by agricultural land at March 31, 2025, compared to $109.1 million for loans secured by dairy & livestock land and $340.7 million for loans secured by agricultural land at December 31, 2024. As of March 31, 2025, dairy & livestock and agribusiness loans of $252.5 million were comprised of $217.4 million for dairy & livestock loans and $35.1 million for agribusiness loans, compared to $419.9 million were comprised of $385.3 million for dairy & livestock loans and $34.6 million of agribusiness loans at December 31, 2024.

At March 31, 2025 and December 31, 2024, loans were pledged to secure the borrowings and available lines of credit from the FHLB and the Federal Reserve Bank totaling $4.36 billion and $4.44 billion, respectively.

There were no outstanding loans held-for-sale as of March 31, 2025 and December 31, 2024.

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

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

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

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

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

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

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

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

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


	Origination Year												Revolving loans amortized		Revolving loans converted to
March 31, 2025	2025		2024		2023		2022		2021		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Commercial real estate loans:
Risk Rating:
Pass	$	118,405	$	298,954	$	402,954	$	1,199,575	$	1,047,396	$	2,900,403	$	195,573	$	36,343	$	6,199,603
Special Mention		—		9,633		7,534		41,993		21,203		127,980		4,826		6,778		219,947
Substandard		1,174		1,174		680		6,731		8,978		46,534		5,783		—		71,054
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial real estate loans:	$	119,579	$	309,761	$	411,168	$	1,248,299	$	1,077,577	$	3,074,917	$	206,182	$	43,121	$	6,490,604
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Construction loans:
Risk Rating:
Pass	$	—	$	7,020	$	319	$	8,367	$	—	$	—	$	—	$	—	$	15,706
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Construction loans:	$	—	$	7,020	$	319	$	8,367	$	—	$	—	$	—	$	—	$	15,706
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SBA loans:
Risk Rating:
Pass	$	6,795	$	29,325	$	15,905	$	46,045	$	46,482	$	111,111	$	—	$	—	$	255,663
Special Mention		—		3,365		—		—		1,328		6,293		—		—		10,986
Substandard		—		—		—		1,570		—		3,625		—		—		5,195
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA loans:	$	6,795	$	32,690	$	15,905	$	47,615	$	47,810	$	121,029	$	—	$	—	$	271,844
Current YTD Period: Gross charge-offs	$	19	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	19

SBA - PPP loans:
Risk Rating:
Pass	$	—	$	—	$	—	$	—	$	133	$	46	$	—	$	—	$	179
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA - PPP loans:	$	—	$	—	$	—	$	—	$	133	$	46	$	—	$	—	$	179
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial loans:
Risk Rating:
Pass	$	34,204	$	95,519	$	109,970	$	104,308	$	62,801	$	177,705	$	314,411	$	5,974	$	904,892
Special Mention		—		776		2,297		1,724		1,478		3,965		12,604		5,284		28,128
Substandard		—		—		3,074		469		241		—		1,747		3,750		9,281
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial and industrial loans:	$	34,204	$	96,295	$	115,341	$	106,501	$	64,520	$	181,670	$	328,762	$	15,008	$	942,301
Current YTD Period: Gross charge-offs	$	21	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	21


	Origination Year												Revolving loans amortized		Revolving loans converted to
March 31, 2025	2025		2024		2023		2022		2021		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Dairy & livestock and agribusiness loans:
Risk Rating:
Pass	$	—	$	729	$	—	$	—	$	597	$	893	$	204,881	$	6	$	207,106
Special Mention		—		—		—		—		—		—		36,674		1,367		38,041
Substandard		—		—		—		—		—		60		6,525		800		7,385
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Dairy & livestock and agribusiness loans:	$	—	$	729	$	—	$	—	$	597	$	953	$	248,080	$	2,173	$	252,532
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Municipal lease finance receivables loans:
Risk Rating:
Pass	$	—	$	2,799	$	—	$	5,095	$	24,714	$	32,496	$	—	$	—	$	65,104
Special Mention		—		—		—		—		—		99		—		—		99
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Municipal lease finance receivables loans:	$	—	$	2,799	$	—	$	5,095	$	24,714	$	32,595	$	—	$	—	$	65,203
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SFR mortgage loans:
Risk Rating:
Pass	$	5,894	$	18,617	$	19,979	$	59,518	$	40,891	$	122,071	$	—	$	—	$	266,970
Special Mention		—		—		—		—		—		1,290		—		276		1,566
Substandard		—		—		—		—		—		957		—		—		957
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SFR mortgage loans:	$	5,894	$	18,617	$	19,979	$	59,518	$	40,891	$	124,318	$	—	$	276	$	269,493
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer and other loans:
Risk Rating:
Pass	$	753	$	4,941	$	2,747	$	907	$	1,591	$	611	$	40,863	$	2,953	$	55,366
Special Mention		—		—		—		—		103		—		4		—		107
Substandard		—		—		—		—		—		—		—		297		297
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Consumer and other loans:	$	753	$	4,941	$	2,747	$	907	$	1,694	$	611	$	40,867	$	3,250	$	55,770
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Loans, at amortized cost:
Risk Rating:
Pass	$	166,051	$	457,904	$	551,874	$	1,423,815	$	1,224,605	$	3,345,336	$	755,728	$	45,276	$	7,970,589
Special Mention		—		13,774		9,831		43,717		24,112		139,627		54,108		13,705		298,874
Substandard		1,174		1,174		3,754		8,770		9,219		51,176		14,055		4,847		94,169
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Loans at amortized cost:	$	167,225	$	472,852	$	565,459	$	1,476,302	$	1,257,936	$	3,536,139	$	823,891	$	63,828	$	8,363,632
Current YTD Period: Total gross charge-offs	$	40	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	40


	Origination Year												Revolving loans amortized		Revolving loans converted to
December 31, 2024	2024		2023		2022		2021		2020		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Commercial real estate loans:
Risk Rating:
Pass	$	307,984	$	419,547	$	1,216,126	$	1,066,694	$	828,493	$	2,170,119	$	197,991	$	37,704	$	6,244,658
Special Mention		1,075		4,910		36,505		21,478		17,056		104,201		3,937		1,287		190,449
Substandard		1,176		244		6,775		9,057		15,138		34,259		5,696		—		72,345
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial real estate loans:	$	310,235	$	424,701	$	1,259,406	$	1,097,229	$	860,687	$	2,308,579	$	207,624	$	38,991	$	6,507,452
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	2,258	$	—	$	—	$	2,258

Construction loans:
Risk Rating:
Pass	$	7,717	$	315	$	8,050	$	—	$	—	$	—	$	—	$	—	$	16,082
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Construction loans:	$	7,717	$	315	$	8,050	$	—	$	—	$	—	$	—	$	—	$	16,082
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SBA loans:
Risk Rating:
Pass	$	33,531	$	16,064	$	46,393	$	47,810	$	23,733	$	92,012	$	—	$	—	$	259,543
Special Mention		—		—		—		1,337		4,716		1,830		—		—		7,883
Substandard		—		—		1,581		—		—		4,006		—		—		5,587
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA loans:	$	33,531	$	16,064	$	47,974	$	49,147	$	28,449	$	97,848	$	—	$	—	$	273,013
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	165	$	—	$	—	$	165

SBA - PPP loans:
Risk Rating:
Pass	$	—	$	—	$	—	$	254	$	520	$	—	$	—	$	—	$	774
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SBA - PPP loans:	$	—	$	—	$	—	$	254	$	520	$	—	$	—	$	—	$	774
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial and industrial loans:
Risk Rating:
Pass	$	100,465	$	100,242	$	111,982	$	67,706	$	69,084	$	118,069	$	318,147	$	6,213	$	891,908
Special Mention		819		2,213		1,026		2,169		421		4,175		8,136		4,830		23,789
Substandard		—		3,029		523		11		—		—		1,997		3,921		9,481
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Commercial and industrial loans:	$	101,284	$	105,484	$	113,531	$	69,886	$	69,505	$	122,244	$	328,280	$	14,964	$	925,178
Current YTD Period: Gross charge-offs	$	—	$	—	$	300	$	—	$	—	$	1,186	$	—	$	495	$	1,981


	Origination Year												Revolving loans amortized		Revolving loans converted to
December 31, 2024	2024		2023		2022		2021		2020		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Dairy & livestock and agribusiness loans:
Risk Rating:
Pass	$	812	$	—	$	—	$	596	$	786	$	141	$	327,850	$	13	$	330,198
Special Mention		2,901		—		—		—		—		—		84,295		1,650		88,846
Substandard		—		—		—		—		—		60		—		800		860
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Dairy & livestock and agribusiness loans:	$	3,713	$	—	$	—	$	596	$	786	$	201	$	412,145	$	2,463	$	419,904
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Municipal lease finance receivables loans:
Risk Rating:
Pass	$	2,540	$	—	$	5,111	$	24,715	$	5,140	$	28,510	$	—	$	—	$	66,016
Special Mention		—		—		—		—		—		98		—		—		98
Substandard		—		—		—		—		—		—		—		—		—
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Municipal lease finance receivables loans:	$	2,540	$	—	$	5,111	$	24,715	$	5,140	$	28,608	$	—	$	—	$	66,114
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

SFR mortgage loans:
Risk Rating:
Pass	$	20,261	$	21,055	$	59,763	$	41,156	$	38,730	$	85,637	$	—	$	—	$	266,602
Special Mention		—		—		—		—		896		411		—		284		1,591
Substandard		—		—		—		—		—		979		—		—		979
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total SFR mortgage loans:	$	20,261	$	21,055	$	59,763	$	41,156	$	39,626	$	87,027	$	—	$	284	$	269,172
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer and other loans:
Risk Rating:
Pass	$	7,242	$	3,043	$	1,521	$	1,850	$	142	$	624	$	42,035	$	1,855	$	58,312
Special Mention		—		—		—		130		—		—		4		—		134
Substandard		—		—		—		—		—		—		—		297		297
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Consumer and other loans:	$	7,242	$	3,043	$	1,521	$	1,980	$	142	$	624	$	42,039	$	2,152	$	58,743
Current YTD Period: Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	1	$	3	$	4

Total Loans, at amortized cost:
Risk Rating:
Pass	$	480,552	$	560,266	$	1,448,946	$	1,250,781	$	966,628	$	2,495,112	$	886,023	$	45,785	$	8,134,093
Special Mention		4,795		7,123		37,531		25,114		23,089		110,715		96,372		8,051		312,790
Substandard		1,176		3,273		8,879		9,068		15,138		39,304		7,693		5,018		89,549
Doubtful & Loss		—		—		—		—		—		—		—		—		—
Total Loans at amortized cost:	$	486,523	$	570,662	$	1,495,356	$	1,284,963	$	1,004,855	$	2,645,131	$	990,088	$	58,854	$	8,536,432
Current YTD Period: Gross charge-offs	$	—	$	—	$	300	$	—	$	—	$	3,609	$	1	$	498	$	4,408

The Company's allowance models calculate reserves over the average life of the loan, which includes the remaining time to maturity, adjusted for estimated prepayments applied as an adjustment to our commercial real estate and commercial and industrial loans. Our allowance for credit losses is based upon lifetime loss rate models developed from an estimation framework that uses historical lifetime loss experiences to derive loss rates at a collective pool level. We measure the expected credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. We have three collective loan pools: Commercial Real Estate, Commercial and Industrial, and Consumer. A substantial portion of the ACL relates to loans within the Commercial Real Estate and Commercial and Industrial methodologies, each evaluated on a collective basis. Our ACL amounts are largely driven by portfolio characteristics, including loss history, internal risk grading, various risk attributes, and the economic outlook for certain macroeconomic variables. Risk attributes for commercial real

estate loans include Original Loan to Value ratios ("OLTV"), origination year, loan seasoning, and macroeconomic variables that include Real GDP growth, commercial real estate price index and unemployment rate. Risk attributes for commercial and industrial loans include internal risk ratings, borrower industry sector, loan credit spreads and macroeconomic variables that include unemployment rate and BBB spread. The macroeconomic variables for Consumer include unemployment rate and GDP. The Commercial Real Estate methodology is applied over commercial real estate loans, a portion of construction loans, and a portion of SBA loans. The Commercial and Industrial methodology is applied over a substantial portion of the Company’s commercial and industrial loans, all dairy & livestock and agribusiness loans, municipal lease receivables, as well as the remaining portion of SBA loans. The Consumer methodology is applied to SFR mortgage loans, consumer loans, as well as the remaining construction loans. In addition to determining the quantitative life of loan loss rate to be applied against the amortized cost basis of the portfolio segments, management reviews current conditions and forecasts to determine whether adjustments are needed to ensure that the life of loan loss rates reflect both the current state of the portfolio, and expectations for macroeconomic changes. The Company’s ACL estimate incorporates a reasonable and supportable forecast of various macroeconomic variables over the remaining average life of our loans. This forecast incorporates an assumption that each macroeconomic variable will revert to a long-term expectation, starting in years two through three, of the reasonable and supportable forecast period, with the reversion largely completed within the first five years of the forecast. The economic forecast is based on probability weighted scenarios to address macroeconomic uncertainty. Our methodology for assessing the appropriateness of the allowance is reviewed on a regular basis and considers overall risks in the Bank’s loan portfolio. Refer to Note 3 – Summary of Significant Accounting Policies included in our Annual Report on Form 10-K for the year ended December 31, 2024 for a more detailed discussion concerning the allowance for credit losses.

The ACL totaled $78.3 million at March 31, 2025, compared to $80.1 million at December 31, 2024. The $1.9 million decrease in the ACL from December 31, 2024 to March 31, 2025 is comprised of $130,000 in net recoveries and $2 million recapture of provision for credit losses. At March 31, 2025, the ACL as a percentage of total loans and leases, at amortized cost, was 0.94%. This compares to 0.94% at December 31, 2024. Our economic forecast continues to be a blend of multiple forecasts produced by Moody’s. These U.S. economic forecasts include a baseline forecast, as well as downside forecasts. The baseline forecast continues to represent the largest weighting in our multi-weighted forecast scenario, with both upside and downside risks weighted among multiple forecasts. As of March 31, 2025, the resulting economic forecast has Real GDP growing at a slower rate for the remainder of 2025 and only reaching a 2% growth rate in the second half of 2026. Commercial real estate values are forecasted to continue their decline through the first half of 2026. Unemployment is forecasted to rise in 2025 and reach 5% by the beginning of 2026 and stay elevated through 2028.

Management believes that the ACL was appropriate at March 31, 2025 and December 31, 2024. Due to inflationary pressures, high interest rates, lower commercial real estate values, international tariffs, and other geopolitical events, no assurance can be given that economic conditions that adversely affect the Company’s service areas or other circumstances will not be reflected in increased provisions for credit losses in the future.

We seek to manage asset quality and control credit risk through diversification of the loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Management Division is responsible for monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of nonperforming, past due loans and larger credits, designed to identify potential charges to the allowance for credit losses, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers and any guarantors, the value of the applicable collateral, loan loss experience, estimated credit losses, growth in the loan portfolio, prevailing economic conditions and other factors. Refer to Note 3 – Summary of Significant Accounting Policies, included in our Annual Report on Form 10-K for the year ended December 31, 2024, for additional discussion concerning the Bank’s policy for past due and nonperforming loans.

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


	March 31, 2025
	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial real estate
Owner occupied	$	—	$	—	$	—	$	—	$	2,308,238	$	2,308,238
Non-owner occupied		—		—		23,707		23,707		4,158,659		4,182,366
Construction
Speculative (1)		—		—		—		—		8,439		8,439
Non-speculative		—		—		—		—		7,267		7,267
SBA		718		—		253		971		270,873		271,844
SBA - PPP		—		—		—		—		179		179
Commercial and industrial		—		—		1		1		942,300		942,301
Dairy & livestock and agribusiness		—		—		60		60		252,472		252,532
Municipal lease finance receivables		—		—		—		—		65,203		65,203
SFR mortgage		—		—		—		—		269,493		269,493
Consumer and other loans		—		—		—		—		55,770		55,770
Total loans at amortized cost	$	718	$	—	$	24,021	$	24,739	$	8,338,893	$	8,363,632

(1)

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


	December 31, 2024
	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial real estate
Owner occupied	$	—	$	—	$	196	$	196	$	2,329,380	$	2,329,576
Non-owner occupied		—		—		24,430		24,430		4,153,446		4,177,876
Construction
Speculative (1)		—		—		—		—		8,091		8,091
Non-speculative		—		—		—		—		7,991		7,991
SBA		—		190		1,427		1,617		271,396		273,013
SBA - PPP		—		—		—		—		774		774
Commercial and industrial		399		—		140		539		924,639		925,178
Dairy & livestock and agribusiness		—		—		60		60		419,844		419,904
Municipal lease finance receivables		—		—		—		—		66,114		66,114
SFR mortgage		—		—		—		—		269,172		269,172
Consumer and other loans		—		—		—		—		58,743		58,743
Total loans at amortized cost	$	399	$	190	$	26,253	$	26,842	$	8,509,590	$	8,536,432

(1)

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

Amortized cost of our finance receivables and loans that are on nonaccrual status, including loans with no allowance are presented as of March 31, 2025 and December 31, 2024 by type of loan.


	March 31, 2025
	Nonaccrual with No Allowance for Credit Losses		Total Nonaccrual (1) (3)		Loans Past Due Over 89 Days Still Accruing
	(Dollars in thousands)
Commercial real estate
Owner occupied	$	23,707	$	672	$	—
Non-owner occupied		—		23,707		—
Construction
Speculative (2)		—		—		—
Non-speculative		—		—		—
SBA		940		1,024		—
SBA - PPP		—		—		—
Commercial and industrial		173		173		—
Dairy & livestock and agribusiness		60		60		—
Municipal lease finance receivables		—		—		—
SFR mortgage		—		—		—
Consumer and other loans		—		—		—
Total loans at amortized cost	$	24,880	$	25,636	$	—

(1)

As of March 31, 2025, $1.6 million of nonaccruing loans were current and $24.0 million were 90+ days past due.

(2)

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

(3)

Excludes $55,000 of guaranteed portion of nonaccrual SBA loans that are in process of collection.

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


	March 31, 2025						Number of Loans
	Real Estate		Business Assets		Other		Dependent on Collateral
	(Dollars in thousands)
Commercial real estate	$	24,378	$	—	$	—		3
Construction		—		—		—		—
SBA		1,024		—		—		4
SBA - PPP		—		—		—		—
Commercial and industrial		—		172		—		1
Dairy & livestock and agribusiness		60		—		—		1
Municipal lease finance receivables		—		—		—		—
SFR mortgage		—		—		—		—
Consumer and other loans		—		—		—		—
Total collateral-dependent loans	$	25,462	$	172	$	—		9


	December 31, 2024						Number of Loans
	Real Estate		Business Assets		Other		Dependent on Collateral
	(Dollars in thousands)
Commercial real estate	$	25,866	$	—	$	—		6
Construction		—		—		—		—
SBA		1,529		—		—		5
SBA - PPP		—		—		—		—
Commercial and industrial		11		327		—		3
Dairy & livestock and agribusiness		60		—		—		1
Municipal lease finance receivables		—		—		—		—
SFR mortgage		—		—		—		—
Consumer and other loans		—		—		—		—
Total collateral-dependent loans	$	27,466	$	327	$	—		15

The allowance for off-balance sheet credit exposure relates to commitments to extend credit, letters of credit and undisbursed funds on lines of credit. The Company evaluates credit risk associated with the off-balance sheet loan commitments in the same manner as it evaluates credit risk associated with the loan and lease portfolio. The Bank's ACL methodology produced an allowance of $6.8 million for the off-balance sheet credit exposures as of March 31, 2025. There was a $500,000 provision for unfunded loan commitments for the three months ended March 31, 2025, and no provision for the three months ended March 31, 2024. As of March 31, 2025 and December 31, 2024, the balance in this reserve was $6.8 million and $6.3 million, respectively, and was included in other liabilities.

There were three loans to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2025 with an amortized cost totaling $6.2 million as of March 31, 2025, including two commercial real estate loans totaling $6.0 million and one dairy & livestock and agribusiness loan of $225,000.

As of March 31, 2025, the Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the first quarter of 2025 that subsequently defaulted. Payment default is defined as movement to nonaccrual (nonperforming) status, foreclosure or charge-off, whichever occurs first.