UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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~~March 3031, ~~2025~~2026

☐ 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 000-33501

NORTHRIM BANCORP, INC.

(Exact name of registrant as specified in its charter)


Alaska						92-0175752
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3111 C Street

Anchorage, Alaska 99503

(Address of principal executive offices) (Zip Code)

(907) 562-0062

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

TITLE OF EACH CLASS TRADING SYMBOL NAME OF EXCHANGE ~~Common Stock NRIM The Nasdaq Stock Market LLC~~

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.

ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

ý 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 ý 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 ý No

The number of shares of the issuer’s Common Stock, par value $0.25 per share, outstanding at ~~October~~May 271, ~~2025~~2026 was 22,~~090~~244,~~668~~766.

TABLE OF CONTENTS
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Shareholders' Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to the Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	5144
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7264
Item 4.	Controls and Procedures	7264
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	7264
Item 1A.	Risk Factors	7365
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7365
Item 5.	Other Information	7466
Item 6.	Exhibits	7466
SIGNATURES		7567

PART I. FINANCIAL INFORMATION

These consolidated financial statements should be read in conjunction with the consolidated financial statements, accompanying notes and other relevant information included in Northrim BanCorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025.

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

NORTHRIM BANCORP, INC.

Consolidated Balance Sheets

(Unaudited)

	September 30,2025	December 31,2024
	March 31,2026	December 31,2025
(In Thousands, Except Share Data)
ASSETS
Cash and due from banks	$4133,~~279~~030	$4236,~~101~~042
Interest bearing deposits in other banks	~~171~~121,~~413~~907	20109,~~635~~864
Marketable equity securities	810,~~332~~145	8,~~719~~392
Investment securities available for sale, at fair value	~~419~~418,~~178~~447	~~478~~420,~~617~~661
Investment securities held to maturity, at amortized cost	3631,750	3626,750
Investment in Federal Home Loan Bank stock	67,~~437~~060	56,~~331~~764
Loans held for sale	~~111~~81,~~317~~179	59100,~~957~~323
Loans	2,~~218~~358,~~970~~702	2,~~129~~295,~~263~~499
Allowance for credit losses, loans	(2324,~~357~~812)	(2223,~~020~~737)
Net loans	2,~~195~~333,~~613~~890	2,~~107~~271,~~243~~762
Purchased receivables, net	~~108~~105,~~053~~029	74101,~~078~~642
Mortgage servicing rights, at fair value	2728,~~796~~426	2627,~~439~~474
Premises and equipment, net	38,346	37,757
Other real estate owned, net	1,036	—
Operating lease right-of-use assets	6,523	7,455
Premises and equipment, net	41,728	39,692
Goodwill	49,874	50,018
Operating lease right-of-use assets	11,749	5,911
Goodwill	49,874	49,874
Other intangible assets, net	950	950
Other assets	9078,~~471~~708	8584,~~819~~172
Total assets	$3,~~312~~354,~~332~~908	$3,~~041~~290,~~869~~273
LIABILITIES
Deposits:
Demand	$~~872~~826,~~086~~445	$~~706~~721,~~225~~925
Interest-bearing demand	1,~~191~~215,~~867~~182	1,~~108~~242,~~404~~546
Savings	~~239~~243,~~738~~667	250,~~900~~006
Money market	~~202~~197,~~491~~402	~~196~~195,~~290~~793
Certificates of deposit less than $250,000	192,744	201,296
Certificates of deposit	391,050	402,759
Certificates of deposit $250,000 and greater	207,537	217,074
Total deposits	2,873,746	2,813,029
Total deposits	2,906,463	2,680,189
Borrowings	81,652	81,729
Borrowings	12,916	23,045
Operating lease liabilities	11,857	5,941
Junior subordinated debentures	10,310	10,310
Other liabilities	51,844	63,030
Operating lease liabilities	6,559	7,487
Total liabilities	3,019,099	2,963,729
Other liabilities	60,421	53,722
Total liabilities	2,996,669	2,774,753
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value, 2,500,000 shares authorized, none issued or outstanding	—	—
Common stock, $0.25 par value, 40,000,000 shares authorized, 22,090,668 and 22,072,840 issued and outstanding at September 30, 2025 and December 31, 2024, respectively	5,523	5,518
Common stock, $0.25 par value, 40,000,000 shares authorized, 22,244,766 and 22,111,637 issued and outstanding at March 31, 2026 and December 31, 2025, respectively	5,561	5,528
Additional paid-in capital	10,~~183~~363	910,~~311~~822
Retained earnings	~~300~~319,~~729~~660	~~259~~309,~~311~~575
Accumulated other comprehensive loss, net of tax	(772)	(7,024)
Accumulated other comprehensive income, net of tax	225	619
Total shareholders' equity	~~315~~335,~~663~~809	~~267~~326,~~116~~544
Total liabilities and shareholders' equity	$3,~~312~~354,~~332~~908	$3,~~041~~290,~~869~~273

See notes to consolidated financial statements

NORTHRIM BANCORP, INC.

Consolidated Statements of Income

(Unaudited)

Three Months Ended

~~Nine Months Ended~~

September 30,

March 31,

(In Thousands, Except Per Share Data)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Interest and Dividend Income

Interest and fees on loans and loans held for sale

$4139,~~142~~977

$3437,~~863~~470

~~$119,131~~

~~$97,680~~

Interest on investment securities available for sale

23,~~723~~005

32,~~408~~952

~~8,701~~

~~10,682~~

Dividends on marketable equity securities

~~124~~157

~~209~~145

~~415~~

~~679~~

Interest on investment securities held to maturity

~~473~~466

~~467~~473

~~1,419~~

Dividends on Federal Home Loan Bank stock

~~192~~146

80105

~~417~~

~~214~~

Interest on deposits in other banks

1,~~324~~145

~~389~~416

~~2,255~~

~~1,459~~

Total Interest and Dividend Income

4544,~~978~~896

3941,~~416~~561

~~132,338~~

~~112,133~~

Interest Expense

Interest expense on deposits

108,~~139~~997

109,~~123~~935

~~30,378~~

~~28,779~~

Interest expense on borrowings

~~399~~79

~~357~~237

~~1,445~~

~~729~~

Interest expense on junior subordinated debentures

280

283

Interest expense on subordinated debentures

1,159

Total Interest Expense

10,~~632~~235

10,~~574~~264

~~32,103~~

~~29,791~~

Net Interest Income

3534,~~346~~661

2831,~~842~~297

~~100,235~~

~~82,342~~

Provision for credit losses

1,716

2,063

2,283

2,092

Provision (benefit) for credit losses

960

(1,409)

Net Interest Income After Provision for Credit Losses

33,630

26,779

97,952

80,250

Net Interest Income After Provision (Benefit) for Credit Losses

33,701

32,706

Other Operating Income

Gain on sale by Pacific Wealth Advisors

14,211

—

14,211

—

Mortgage banking income

6,461

4,251

Mortgage banking income

7,273

7,047

18,924

16,962

Purchased receivable income

6,132

6,150

Purchased receivable income

7,269

1,033

19,316

3,620

Bankcard fees

1,089

1,074

Bankcard fees

1,229

1,196

3,456

3,218

Service charges on deposit accounts

811

677

Service charges on deposit accounts

796

605

2,199

1,726

Unrealized (loss) on marketable equity securities

(256)

(50)

Unrealized gain on marketable equity securities

576

108

830

Other income

642

938

Other income

381

1,130

2,705

2,652

Total Other Operating Income

14,879

13,040

Total Other Operating Income

31,239

11,587

60,919

29,008

Other Operating Expense

Salaries and other personnel expense

19,~~432~~506

17,~~549~~223

~~57,509~~

~~49,593~~

Data processing expense

3,~~240~~305

23,~~618~~104

~~9,710~~

~~7,878~~

Occupancy expense

12,~~921~~104

1,~~911~~889

~~5,914~~

~~5,716~~

Professional and outside services

1,~~112~~159

~~903~~1,115

~~3,340~~

~~2,384~~

Insurance expense

802

596

2,575

2,067

Marketing expense

901

672

Compensation expense - Sallyport acquisition payments

~~600~~500

—600

~~1,800~~

—

Marketing expense

508

860

2,222

2,063

Insurance expense

404

1,017

OREO expense, net rental income and gains on sale

~~(16)~~12

~~(11)~~

~~(387)~~

Other expense

2,~~701~~731

2,~~289~~548

~~7,900~~

~~6,246~~

Total Other Operating Expense

30,~~300~~622

2628,~~728~~171

~~90,959~~

~~75,560~~

Income Before Provision for Income Taxes

3417,~~569~~958

1117,~~638~~575

~~67,912~~

~~33,698~~

Provision for income taxes

74,~~504~~283

24,~~813~~251

~~15,745~~

~~7,654~~

Net Income

$2713,~~065~~675

$813,~~825~~324

~~$52,167~~

~~$26,044~~

Earnings Per Share, Basic

$10.2362

$0.4060

~~$2.36~~

~~$1.18~~

Earnings Per Share, Diluted

$10.2061

$0.3960

~~$2.32~~

~~$1.17~~

Weighted Average Common Shares Outstanding, Basic

22,~~090~~166,~~668~~888

22,~~007~~079,~~772~~992

~~22,085,968~~

~~22,002,812~~

Weighted Average Common Shares Outstanding, Diluted

22,~~502~~577,~~680~~720

22,~~332~~432,~~220~~408

~~22,466,554~~

~~22,296,540~~

See notes to consolidated financial statements

NORTHRIM BANCORP, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)

2010

	Three Months Ended September 30,		Nine Months Ended September 30,
	Three Months Ended March 31,
(In Thousands)	~~2025~~2026	~~2024~~2025	~~2025~~	~~2024~~
Net income	$2713,~~065~~675	$813,~~825~~324	~~$52,167~~	~~$26,044~~
Other comprehensive income (loss), net of tax:
Securities available for sale:
Unrealized holding gains arising during the period	$2,505	$10,591	$9,107	$13,689
Unrealized holding (losses) gains arising during the period	($623)	$3,974
Derivatives and hedging activities:
Unrealized holding (losses) arising during the period	(60)	(488)	(403)	(160)
Unrealized holding gains (losses) arising during the period	6	(244)
Foreign currency translation income (loss)	(127)	—	23	—
Foreign currency translation income	48	5
Income tax expense related to net unrealized (gains)	(695)	(2,872)	(2,474)	(3,847)
Income tax expense related to net unrealized losses (gains)	175	(1,061)
Other comprehensive income, net of tax	1,623	7,231	6,253	9,682
Other comprehensive (loss) income, net of tax	(394)	2,674
Comprehensive income	$2813,~~688~~281	$1615,~~056~~998	~~$58,420~~	~~$35,726~~

See notes to consolidated financial statements

NORTHRIM BANCORP, INC.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

	Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss), net of Tax	Total
	Number of Shares	Par Value
(In Thousands)
Balance as of January 1, 2024	22,051	$5,513	$9,605	$236,037	($16,437)	$234,718
Balance as of January 1, 2025	22,071	$5,518	$9,311	$259,311	($7,024)	$267,116
Cash dividend on common stock ($0.15 per share)	—	—	—	(3,388)	—	(3,388)
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,573)	—	(3,573)
Stock-based compensation expense	—	—	~~208~~232	—	—	~~208~~232
Exercise of stock options and vesting of restricted stock units, net	412	13	(2720)	—	—	(2617)
Repurchase of common stock	(56)	(14)	(774)	—	—	(788)
Other comprehensive income, net of tax	—	—	—	—	2,674	2,674
Other comprehensive income, net of tax	—	—	—	—	404	404
Net income	—	—	—	13,324	—	13,324
Net income	—	—	—	8,199	—	8,199
Balance as of March 31, 2025	22,083	$5,521	$9,523	$269,062	($4,350)	$279,756
Balance as of March 31, 2024	21,999	$5,500	$9,012	$240,848	($16,033)	$239,327
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,585)	—	(3,585)
Cash dividend on common stock ($0.15 per share)	—	—	—	(3,393)	—	(3,393)
Stock-based compensation expense	—	—	327	—	—	327
Stock-based compensation expense	—	—	219	—	—	219
Exercise of stock options and vesting of restricted stock units, net	4	1	(13)	—	—	(12)
Exercise of stock options and vesting of restricted stock units, net	8	2	(23)	—	—	(21)
Other comprehensive income, net of tax	—	—	—	—	1,955	1,955
Other comprehensive income, net of tax	—	—	—	—	2,048	2,048
Net income	—	—	—	11,778	—	11,778
Net income	—	—	—	9,020	—	9,020
Balance as of June 30, 2025	22,087	$5,522	$9,837	$277,255	($2,395)	$290,219
Balance as of June 30, 2024	22,007	$5,502	$9,208	$246,475	($13,985)	$247,200
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,591)	—	(3,591)
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,458)	—	(3,458)
Stock-based compensation expense	—	—	363	—	—	363
Stock-based compensation expense	—	—	265	—	—	265
Exercise of stock options and vesting of restricted stock units, net	4	1	(17)	—	—	(16)
Exercise of stock options and vesting of restricted stock units, net	—	—	(13)	—	—	(13)
Other comprehensive income, net of tax	—	—	—	—	1,623	1,623
Other comprehensive income, net of tax	—	—	—	—	7,231	7,231
Net income	—	—	—	27,065	—	27,065
Net income	—	—	—	8,825	—	8,825
Balance as of September 30, 2025	22,091	$5,523	$10,183	$300,729	($772)	$315,663
Balance as of September 30, 2024	22,007	$5,502	$9,460	$251,842	($6,754)	$260,050
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,595)	—	(3,595)
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,458)	—	(3,458)
Stock-based compensation expense	—	—	812	—	—	812
Stock-based compensation expense	—	—	221	—	—	221
Exercise of stock options and vesting of restricted stock units, net	21	5	(173)	—	—	(168)
Exercise of stock options and vesting of restricted stock units, net	64	16	(370)	—	—	(354)
Other comprehensive income, net of tax	—	—	—	—	1,391	1,391
Other comprehensive loss, net of tax	—	—	—	—	(270)	(270)
Net income	—	—	—	12,441	—	12,441
Net income	—	—	—	10,927	—	10,927
Balance as of December 31, 2025	22,112	$5,528	$10,822	$309,575	$619	$326,544
Balance as of December 31, 2024	22,071	$5,518	$9,311	$259,311	($7,024)	$267,116

See notes to consolidated financial statements

NORTHRIM BANCORP, INC.

Consolidated Statements of Changes in Shareholders’ Equity

(Continued)

(Unaudited)

	Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss), net of Tax	Total
	Number of Shares	Par Value
(In Thousands)
Balance as of January 1, 2025	22,071	$5,518	$9,311	$259,311	($7,024)	$267,116
Balance as of January 1, 2026	22,112	$5,528	$10,822	$309,575	$619	$326,544
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,~~573~~590)	—	(3,~~573~~590)
Stock-based compensation expense	—	—	~~232~~310	—	—	~~232~~310
Exercise of stock options and vesting of restricted stock units, net	12133	333	(20769)	—	—	(17736)
Other comprehensive income, net of tax	—	—	—	—	2,674	2,674
Other comprehensive loss, net of tax	—	—	—	—	(394)	(394)
Net income	—	—	—	13,~~324~~675	—	13,~~324~~675
Balance as of March 31, 2025	22,083	$5,521	$9,523	$269,062	($4,350)	$279,756
Balance as of March 31, 2026	22,245	$5,561	$10,363	$319,660	$225	$335,809
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,585)	—	(3,585)
Stock-based compensation expense	—	—	327	—	—	327
Exercise of stock options and vesting of restricted stock units, net	4	1	(13)	—	—	(12)
Other comprehensive income, net of tax	—	—	—	—	1,955	1,955
Net income	—	—	—	11,778	—	11,778
Balance as of June 30, 2025	22,087	$5,522	$9,837	$277,255	($2,395)	$290,219
Cash dividend on common stock ($0.16 per share)	—	—	—	(3,591)	—	(3,591)
Stock-based compensation expense	—	—	363	—	—	363
Exercise of stock options and vesting of restricted stock units, net	4	1	(17)	—	—	(16)
Other comprehensive income, net of tax	—	—	—	—	1,623	1,623
Net income	—	—	—	27,065	—	27,065
Balance as of September 30, 2025	22,091	$5,523	$10,183	$300,729	($772)	$315,663

See notes to consolidated financial statements

NORTHRIM BANCORP, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
(In Thousands)	~~2025~~2026	~~2024~~2025
Operating Activities:
Net income	$5213,~~167~~675	$2613,~~044~~324
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities:
Depreciation and amortization of premises and equipment	~~2,660~~855	~~2,712~~895
Amortization of investment security premium, net of discount accretion	43	309
Depreciation of debt issuance costs	35	—
Unrealized gain on marketable equity securities	(108)	(830)
Amortization of investment security premium, net of discount accretion	(118)	50
Stock-based compensation	922	692
Unrealized loss on marketable equity securities	256	50
Deferred loan fees and amortization, net of costs	671	190
Deferred tax (benefit) expense	1,729	—
Provision for credit losses	2,283	2,092
Stock-based compensation	310	232
Additions to home mortgage servicing rights carried at fair value	(4,280)	(3,080)
Deferred loan fees and amortization, net of costs	(605)	502
Change in fair value of home mortgage servicing rights carried at fair value	2,923	1,074
Provision for credit losses	960	(1,409)
Change in fair value of commercial servicing rights carried at fair value	257	155
Additions to home mortgage servicing rights carried at fair value	(1,079)	(1,230)
Change in fair value of loans held for sale	35	—
Change in fair value of home mortgage servicing rights carried at fair value	127	855
Gain on sale of loans	(11,481)	(10,247)
Change in fair value of commercial servicing rights carried at fair value	2	73
Proceeds from the sale of loans held for sale	635,967	390,907
Change in fair value of loans held for sale	—	1,161
Origination of loans held for sale	(576,413)	(446,623)
Gain on sale of loans	(2,997)	(2,740)
Gain on sale of other real estate owned	—	(392)
Proceeds from the sale of loans held for sale	145,525	110,907
Gain on sale by Pacific Wealth Advisors	(14,211)	—
Origination of loans held for sale	(123,384)	(108,499)
Net changes in assets and liabilities:
Increase in accrued interest receivable	(1,~~349~~663)	(~~951~~1,887)
Decrease in other assets	165,~~391~~763	~~511~~2,836
Decrease in other liabilities	(1,682)	(6,808)
(Decrease) increase in other liabilities	(12,174)	1,420
Net Cash Provided (Used) by Operating Activities	104,795	(44,245)
Net Cash Provided by Operating Activities	27,217	16,540
Investing Activities:
Investment in securities:
Purchases of investment securities available for sale	(54,~~660~~986)	(1915,~~517~~187)
Purchases of marketable equity securities	—(2,009)	~~(1,964)~~—
Purchases of FHLB stock	(~~22,031~~421)	(247,~~872~~472)
Proceeds from sales/calls/maturities of securities available for sale	123,176	125,625
Purchases of investment securities held to maturity	(15,000)	—
Proceeds from calls of marketable equity securities	481	2,989
Proceeds from sales/calls/maturities of securities available for sale	56,693	34,631
Proceeds from redemption of FHLB stock	20,925	23,534
Proceeds from sales/calls/maturities of securities held to maturity	10,000	—
(Increase) decrease in purchased receivables, net	(34,021)	13,278
Proceeds from redemption of FHLB stock	125	7,461
Increase in loans, net	(191,145)	(241,563)
Increase in purchased receivables, net	(3,383)	(21,457)
Proceeds from the sale of loans	—	23,469
Increase in loans, net	(63,845)	(96,010)
Proceeds from sale of other real estate owned	—	392
Sallyport Commercial Finance, LLC acquisition, net of cash received	—	144
Sallyport Commercial Finance, LLC acquisition, net of cash received	144	—
Purchases of premises and equipment	(2,891)	(208)
Purchases of premises and equipment	(3,249)	(2,063)
Net Cash (Used) by Investing Activities	(75,717)	(98,098)
Net Cash (Used) by Investing Activities	(160,380)	(100,692)
Financing Activities:
Increase in deposits	~~226~~60,~~274~~717	~~140~~97,~~512~~788
Increase in borrowings	(10,129)	(321)
Decrease in borrowings	(112)	(9,909)
Repurchase of common stock	—	(788)
Proceeds from the issuance of common stock	483	—
Cash dividends paid	(103,~~604~~557)	(103,~~120~~534)
Net Cash Provided by Financing Activities	~~205~~57,~~541~~531	~~129~~84,~~283~~345
Net Change in Cash and Cash Equivalents	~~149~~9,~~956~~031	~~(15~~2,~~654)~~787
Cash and Cash Equivalents at Beginning of Period	62145,~~736~~906	~~118~~62,~~530~~736
Cash and Cash Equivalents at End of Period	$~~212~~154,~~692~~937	$~~102~~65,~~876~~523

Supplemental Information:
Income taxes paid	$~~9,695~~1	$~~3,488~~193
Interest paid	$329,~~207~~228	$2910,~~286~~345
Noncash commitments to invest in Low Income Housing Tax Credit Partnerships	$13,407	$—
Transfer of loans to other real estate owned	$1,036	$—
Non-cash lease liability arising from obtaining right of use assets	$—6,426	$~~265~~—
Cash dividends declared but not paid	$~~145~~33	$~~119~~39

See notes to consolidated financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation and Significant Accounting Policies

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements have not been audited, and they include the accounts of the Company and ~~it's~~its wholly-owned subsidiaries, and the wholly owned subsidiaries of Northrim Bank (the “Bank”). Significant intercompany balances have been eliminated in consolidation. As of December 31, 2024, the Company had one wholly-owned business trust subsidiary, Northrim Statutory Trust 2 (“Trust 2”), that was formed to issue trust preferred securities and related common securities of Trust 2. The Company has not consolidated the accounts of Trust 2 in its consolidated financial statements in accordance with U.S. GAAP. As a result, the junior subordinated debentures issued by the Company to Trust 2 are reflected on the Company’s consolidated balance sheet as junior subordinated debentures.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company determined that it operates in three primary operating segments: Community Banking, Home Mortgage Lending, and Specialty Finance. The Company has evaluated subsequent events and transactions for potential recognition or disclosure. Operating results for the interim period ended ~~September~~March 3031, ~~2025~~2026 are not necessarily indicative of the results anticipated for the year ending December 31, ~~2025~~2026. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025.

The Company’s significant accounting policies are discussed in Note 1 to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. There have been no significant changes in our application of these accounting policies in ~~2025~~2026, except for the addition of the following item.

Subordinated Debt: The Company’s subordinated debt is recorded at its contractual principal amount net of unamortized debt issuance costs and original issue discounts or premiums, if any. The debt is subordinate in right of payment to all existing and future senior indebtedness of the Company, as defined in the related indenture or credit agreement. Debt issuance costs incurred in connection with subordinated debt are deferred and presented as a direct deduction from the carrying amount of the related debt and are amortized over the term of the debt using the effective interest method. Interest expense related to subordinated debt includes cash interest and the amortization of debt issuance costs and is recognized in interest expense in the consolidated statements of income.

Common Stock Split

On September 18, 2025, the Company effected a four-for-one forward stock split of its common stock, a proportionate increase the number of authorized shares of the common stock from 10,000,000 to 40,000,000 and proportionate decrease in the par value of the common stock from $1.00 per share to $0.25 per share. All share, equity award and per share amounts presented throughout this Quarterly Report of Form 10-Q have been retrospectively adjusted to reflect the common stock split.

Reclassification of Prior Period Presentation

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or total shareholders' equity.

Recent Accounting Pronouncements

Accounting pronouncements to be implemented in future periods

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, ~~Income~~Disaggregation ~~Taxes~~of ~~(Topic 740) - Improvements to~~ Income ~~Tax~~Statement ~~Disclosures~~Expenses (“ASU ~~2023~~2024-0903”). ~~The~~This ~~amendments~~updated inmandates ~~ASU~~that ~~2023-09~~public ~~improve~~business ~~transparency~~entities ofprovide ~~income~~detailed ~~tax~~ disclosures ~~related~~in tothe ~~rate~~notes ~~reconciliation~~to ~~and~~the ~~income~~financial ~~taxes~~statements, ~~paid~~breaking ~~disclosures~~down byspecific ~~requiring~~expense ~~consistent~~ categories ~~and~~such ~~greater~~as ~~disaggregation~~purchases of ~~information~~inventory, inemployee ~~rate~~compensation, ~~reconciliation~~depreciation, ~~and~~intangible byasset ~~requiring~~amortization, ~~disclosure~~and ofdepreciation, ~~income~~depletion, ~~taxes~~and ~~paid~~amortization ~~disaggregated~~recognized byas ~~jurisdiction.~~part ~~The~~of ~~amendments~~oil- inand ~~ASU 2023~~gas-09producing ~~allow~~activities ~~investors~~included ~~to better assess,~~ in ~~their~~each ~~capital~~relevant ~~allocation~~expense ~~decisions,~~cation. ~~how~~The anobjective ~~entity's~~is ~~worldwide~~to ~~operations~~enhance ~~and~~transparency, ~~related~~enabling ~~tax~~investors ~~risks~~to ~~and~~gain ~~tax~~a ~~planning~~clearer ~~and~~understanding ~~operations~~of ~~opportunities~~the ~~affect~~nature ~~its~~and ~~income~~impact ~~tax~~of ~~rate~~these ~~and~~expenses ~~prospects~~on ~~for~~the ~~future~~Company's ~~cash~~financial ~~flow~~performance. ASU ~~2023~~2024-0903 is effective for ~~the~~annual ~~Company~~reporting ~~for~~periods ~~fiscal years~~ beginning after December 15, ~~2024~~2026 and may be applied on a prospective or retrospective basis. The Company intends to adopt ASU ~~2023~~2024-0903 prospectively and wedoes ~~expect~~not believe that the adoption towill ~~expand~~have ~~our~~a ~~disclosures~~material ~~around~~impact ~~income~~on ~~taxes~~the Company's consolidated financial statements.

2In November 2025, the FASB issued ASU 2025‑08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans (“ASU 2025-08”). ~~Business~~The ~~Combinations~~amendments in ASU 2025‑08 are intended to simplify and improve the accounting for acquired loans under the Current Expected Credit Losses (“CECL”) model by expanding the use of the “gross‑up” approach currently applied only to purchased credit deteriorated (“PCD”) assets. Under prior generally accepted accounting principles, entities were required to distinguish between PCD and non‑PCD acquired loans, resulting in differing Day 1 accounting and concerns about complexity, comparability, and perceived double‑counting of credit losses for non‑PCD loans. ASU 2025‑08 creates a new category of “purchased seasoned loans,” defined as acquired loans—in a business combination or acquired more than 90 days after origination—other than credit cards, that meet certain criteria. These loans must now be accounted for using the gross‑up approach. This method requires an entity to recognize an allowance for expected credit losses at the acquisition date with a corresponding increase to the loan’s amortized cost basis, eliminating Day 1 credit loss expense while reducing subsequent interest income. Existing guidance for PCD assets remains unchanged. ASU 2025‑08 is effective for the Company for interim and annual reporting periods beginning after December 15, 2026 and must be applied prospectively to loans acquired after the adoption date. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025‑08 but does not expect the adoption to have a material effect on its consolidated financial statements.

OnIn ~~October 31~~November 2025, ~~2024,~~FASB ~~the~~issued ~~Company~~ASU 2025‑09, ~~completed~~Derivatives ~~the~~and ~~acquisition~~Hedging of(Topic 815): ~~100%~~Hedge ofAccounting ~~the~~Improvements ~~equity~~(“ASU 2025‑09”). ~~interest~~The amendments in ~~Sallyport~~ASU 2025‑09 ~~Commercial~~clarify ~~Finance,~~and ~~LLC~~expand ~~(“SCF”~~certain oraspects ~~“Sallyport”)~~of inhedge aaccounting ~~cash~~to ~~transaction~~better ~~that~~align isfinancial ~~valued~~reporting atwith ~~approximately~~the ~~$53~~economics of an entity’s risk‑management activities.~~9 million.~~ The ~~primary~~ASU ~~reason~~addresses ~~for~~stakeholder feedback following the ~~acquisition~~implementation ~~was~~of toprior ~~expand~~hedge ~~the~~accounting ~~Company's~~guidance ~~presence~~and inissues arising from the ~~specialty~~global ~~finance~~transition ~~industry~~away from LIBOR. ~~SCF~~The ~~provides~~amendments ~~factoring,~~include ~~asset~~targeted ~~based~~improvements ~~lending~~across several areas of hedge accounting. Among the key changes, ~~and~~ASU 2025‑09 ~~alternative~~(i) ~~working~~expands ~~capital~~the ~~solutions~~ability to ~~small~~aggregate ~~and~~forecasted ~~medium~~transactions ~~sized~~with ~~enterprises~~similar risk exposures in ~~the~~cash ~~United~~flow ~~States~~hedges, (ii) introduces a model that facilitates hedge accounting for forecasted interest payments on “choose‑your‑rate” debt instruments, (iii) broadens hedge accounting for forecasted purchases and sales of nonfinancial assets, and (iv) updates guidance related to anet ~~lesser~~written ~~extent~~options used as hedging instruments. These improvements are intended to reduce complexity, inincrease ~~Canada~~consistency, and enhance the ~~United~~decision‑usefulness ~~Kingdom~~of ~~through~~hedge ~~its~~accounting ~~subsidiaries~~outcomes. ~~SCF~~ASU 2025‑09 ~~will~~is ~~operate~~effective asfor athe ~~wholly-owned~~Company ~~subsidiary~~for offiscal ~~the~~years ~~Bank~~beginning after December 15, 2026, ~~and~~including interim periods within those fiscal years. Early adoption is ~~expected~~permitted. toThe ~~complement~~Company is currently evaluating the ~~products~~impact ~~currently~~of ~~offered~~ASU 2025‑09 byand ~~Northrim~~does ~~Funding~~not ~~Services,~~expect the adoption to have a ~~factoring~~material ~~division~~effect ofon ~~the~~its ~~Bank~~consolidated financial statements.

~~The~~In ~~consideration~~December 2025, ~~transferred~~the orFASB ~~transferable~~issued toASU 2025‑11, ~~the~~Interim ~~former~~Reporting ~~owners~~(Topic 270): ofNarrow‑Scope ~~SCF~~Improvements ~~and~~(“ASU 2025‑11”). ~~the~~The ~~assets~~amendments ~~acquired~~are ~~and~~intended ~~liabilities~~to ~~assumed~~improve ~~have~~the ~~been~~clarity ~~accounted~~and ~~for~~navigability ~~under~~of ~~the~~interim ~~acquisition~~reporting ~~method~~requirements ofwithin ~~accounting~~Topic 270 ~~and~~by ~~were~~clarifying ~~recorded~~when atinterim ~~their~~reporting ~~estimated~~guidance ~~fair~~applies, ~~values~~enhancing asthe organization of ~~the~~required ~~October~~interim 31disclosures, ~~2024~~and ~~acquisition~~specifying ~~date.~~the ~~The~~form ~~Company~~and ~~paid~~content ~~$47.9 million~~of ininterim ~~cash~~financial onstatements. ~~October~~The ~~31,~~guidance ~~2024~~responds ~~when~~to ~~the~~stakeholder ~~acquisition~~feedback ~~was~~that ~~completed.~~existing ~~The~~interim ~~Company~~reporting ~~had~~requirements ~~pre-existing~~were ~~loans~~difficult to ~~SCF~~navigate ~~which~~because ~~totaled~~of ~~$12.0 million.~~the ~~The~~historical ~~fair~~origins ~~value~~and ofaccumulated ~~these~~amendments ~~loans~~within ~~approximated~~Topic 270. ~~their~~ASU 2025‑11 ~~carrying~~adds ~~value,~~a ~~and~~disclosure asprinciple arequiring ~~result~~entities ofto ~~the~~disclose ~~acquisition,~~events ~~the~~that ~~loans~~occur ~~were~~after ~~effectively~~the ~~settled~~end atof ~~their~~the ~~carrying~~most ~~value,~~recent ~~resulting~~annual inreporting noperiod ~~gain~~that orhave ~~loss.~~a ~~The~~material ~~fair~~impact ~~value~~on of the ~~loans~~entity. ~~were~~The ~~considered~~amendments asalso ~~part~~introduce ofa ~~the~~comprehensive ~~total~~list ~~purchase~~of ~~consideration~~required ininterim ~~the~~disclosures ~~transaction.~~drawn ~~Estimated~~from ~~fair~~various ~~values~~Codification ~~recorded~~topics inand clarify the ~~transaction~~presentation ~~are~~requirements ~~subject~~for tointerim ~~change~~financial ~~for~~statements, upincluding tocondensed ~~one~~financial ~~year~~statements ~~after~~and ~~the~~accompanying ~~closing~~footnotes. ~~date~~Importantly, of the ~~acquisition.~~ASU ~~The~~does ~~application~~not ofchange the ~~acquisition~~fundamental ~~method~~nature of ~~accounting~~interim ~~resulted~~reporting innor ~~the~~expand ~~initial~~or ~~recognition~~reduce ofexisting ~~goodwill~~disclosure inrequirements; ~~the~~rather, ~~amount~~it ofimproves ~~$35.0 million.~~clarity Noand ~~other~~consistency ~~intangibles~~across ~~were~~entities ~~identified.~~that Inissue ~~February~~interim ~~2025,~~financial statements in accordance with ~~the~~generally ~~terms~~accepted ofaccounting ~~the~~principles. ~~purchase~~ASU 2025‑11 ~~agreement,~~is effective for the Company ~~determined~~for ~~the~~interim ~~final~~reporting ~~value~~periods ofwithin ~~consideration~~annual ~~transferred~~reporting toperiods beginning after December 15, 2027. Early adoption is permitted, and the ~~former~~amendments ~~owners~~may ofbe ~~SCF~~applied either prospectively or retrospectively. The ~~final~~Company ~~value~~is currently evaluating the impact of ~~consideration~~ASU 2025‑11 ~~transferred~~and ~~decreased~~does ~~$144,000~~not expect the adoption to ~~$47.7 million~~have ~~from~~a ~~$47.9 million,~~material ~~which~~effect ~~decreased~~on ~~goodwill~~its toconsolidated ~~$34~~financial statements.~~9 million.~~

~~The~~In ~~former~~December 2025, ~~owners~~the ofFASB ~~SCF~~issued ~~(the~~ASU 2025‑12, Codification Improvements (“~~sellers~~ASU 2025‑12”). ~~will~~This ~~receive~~Update ~~additional~~is ~~cash~~part ~~proceeds~~of (the ~~“earn-out~~FASB’s ~~payments”)~~ongoing ofproject up to $6address stakeholder‑identified issues in the Accounting Standards Codification.~~0 million.~~ The ~~earn-out~~amendments ~~payments~~consist of ~~$2.0 million~~technical ~~per~~corrections, ~~year~~clarifications, ~~are~~and ~~payable~~other onincremental ~~each~~improvements ofintended to enhance the ~~first~~clarity, ~~three~~consistency, ~~anniversaries~~and usability of ~~the~~U.S. ~~closing~~GAAP. ~~date~~These Codification improvements are not expected to significantly affect current accounting practices or impose substantial costs on most entities. The ~~purchase~~amendments ~~agreement~~span ~~provides~~a ~~for~~wide ~~the~~range ~~these~~of ~~earn-out~~Topics ~~payments~~and include clarifications to bediluted ~~paid~~earnings‑per‑share calculations, updates to ~~the~~disclosure ~~sellers~~requirements infor ~~future~~certain ~~periods~~lease receivables, ~~provided~~refinements ~~that~~to ~~certain~~the ~~principal~~calculation ~~employees~~of reference amounts for beneficial interests, clarification of ~~SCF~~permissible methods for treasury stock retirements, ~~including~~and ~~certain~~guidance regarding the transfer and measurement of receivables arising from contracts with customers. Although the ~~sellers~~updates are largely non‑substantive, ~~have~~certain ~~not~~clarifications ~~been~~may ~~terminated~~affect ~~for~~how ~~cause~~entities apply existing guidance where the prior Codification language was ambiguous or ~~terminated~~inconsistent. ~~their~~ASU 2025‑12 ~~employment~~is effective for ~~good~~the ~~reason.~~Company ~~The~~for ~~earn-out~~annual ~~payments~~reporting ~~have~~periods ~~not~~beginning ~~been~~after ~~included~~December 15, 2026, inincluding ~~acquisition~~interim ~~consideration~~periods ~~and~~within ~~are~~those ~~being~~annual ~~expensed~~periods. asEarly ~~compensation~~adoption ~~expense~~is ~~during~~permitted. The Company is currently evaluating the ~~periods~~impact inof ~~which~~ASU 2025‑12 ~~they~~and ~~are~~does ~~being~~not ~~earned~~expect ~~based~~the onadoption ~~management's~~to ~~determination~~have ~~that~~a ~~payment~~material ofeffect ~~these~~on ~~amounts~~its isconsolidated ~~probable~~financial statements.

A2. ~~summary~~Investment ofSecurities ~~the net assets acquired and the estimated fair value adjustments are presented below:~~

(In Thousands)			October 31, 2024
Cost basis net assets			$29,638
Cash payment made			(47,855)
Pre-existing debt effectively settled			(12,000)
Fair value adjustments:
Net loans			(1,260)
Net purchased receivables			(3,524)
Goodwill			($35,001)

The $35.0 million of goodwill recorded in connection with the acquisition of SCF represents the excess purchase price over the estimated fair value of the net assets acquired, and resulted from the expected decrease in funding costs and, to a lesser extent, expected operational efficiencies. All of the goodwill is expected to be deductible for tax purposes.

A summary of the assets acquired and liabilities assumed at their estimated fair values are presented below:

(In Thousands)			October 31, 2024
Assets Acquired:
Cash and equivalents			$7,197
Loans, net			9,158
Purchased receivables, net			48,034
Premises and equipment			54
Right-of-use assets			44
Other assets			1,642
Total assets acquired			$66,129
Liabilities Assumed:
Borrowings			$40,207
Lease liability			47
Other liabilities			1,021
Total liabilities assumed			$41,275

The fair value of assets acquired and liabilities assumed approximates book value as of the acquisition date as all loans and borrowings have variable interest rates. Purchased receivables have an average life of less than 45 days. Some of the assets acquired exhibited evidence of credit deterioration at the acquisition date. These assets were designated as purchased credit deteriorated (“PCD”) assets in accordance with U.S. GAAP. The following table presents PCD loan and purchased receivable activity at the date of acquisition:

(In Thousands)	Loans	Purchased Receivables
Unpaid principal balance	$10,418	$51,558
ACL at acquisition	(1,260)	(3,524)
Total	$9,158	$48,034

Based on an evaluation in accordance with Rule 3-05 and Rule 11-01(b) of Regulations S-X, the acquisition of SCF does not meet the significance thresholds requiring separate financial statement disclosure.

The operations of SCF are included in our operating results from October 31, 2024, and added revenue of $2.6 million, non-interest expense of $1.5 million, and net income of $943,000, before taxes, for the year ended December 31, 2024. SCF’s results of operations prior to the acquisition are not included in our operating results. Additionally, deal-related costs of $1.1 million for the year ended December 31, 2024 have been incurred and expensed in connection with the acquisition of Sallyport and recognized within professional and outside services expense on the Consolidated Statements of Income.

The following tables present unaudited pro forma results of operations for the three and nine-month periods ended September 30, 2024 as if the acquisition of SCF had occurred on January 1, 2024. The proforma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2024, primarily due to the Company's lower cost of funding as compared to SCF.

(In Thousands, except per share data)	Three Months Ended September 30, 2024
	(Unaudited)
	Company	SCF1	Pro Forma Adjustments3	Pro Forma Combined
Net interest and other income	$40,429	$4,748		$45,177
Net income	8,825	1,491	(424)	9,892
Earnings Per Share, Basic	$0.40			$0.45
Earnings Per Share, Diluted	$0.39			$0.44
Weighted Average Shares Outstanding, Basic	22,007,772			22,007,772
Weighted Average Shares Outstanding, Diluted	22,332,220			22,332,220

(In Thousands, except per share data)	Nine Months Ended September 30, 2024
	(Unaudited)
	Company	SCF2	Pro Forma Adjustments3	Pro Forma Combined
Net interest and other income	$111,350	$14,741		$126,091
Net income	26,044	3,624	(1,030)	28,638
Earnings Per Share, Basic	$1.18			$1.30
Earnings Per Share, Diluted	$1.17			$1.28
Weighted Average Shares Outstanding, Basic	22,002,812			22,002,812
Weighted Average Shares Outstanding, Diluted	22,296,540			22,296,540

1SCF represents unaudited results from July 1 to September 30 for 2024.

2SCF represents unaudited results from January 1 to September 30 for 2024.

3Proforma adjustments include a provision for income taxes using the Company's statutory rate.

3. Investment Securities

Marketable Equity Securities

The Company held marketable equity securities with fair values of $810.31 million at ~~September~~March 3031, ~~2025~~2026 and $8.74 million at December 31, ~~2024~~2025, respectively. The realized and unrealized gains (losses) recognized on marketable equity securities in other operating income in the Company's Consolidated Statements of Income were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In Thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Unrealized gain (loss) on marketable equity securities

$80

$576

$108

$830

Unrealized (loss) on marketable equity securities

($256)

($50)

Total

($80256)

($~~576~~50)

~~$108~~

~~$830~~

Debt securities

Debt securities have been classified in the financial statements as available for sale or held to maturity. The following table summarizes the amortized cost, estimated fair value, and the Allowance for Credit Losses (“ACL”) of debt securities and the corresponding amounts of gross unrealized gains and losses of available-for-sale securities recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses of held to maturity securities at the periods indicated:

(In Thousands)

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Allowance for Credit Losses

Fair Value

September 30, 2025

March 31, 2026

Securities available for sale

U.S. Treasury and government sponsored entities

$~~388~~383,~~946~~307

$~~1,558~~928

($32,~~998~~215)

$—

$~~386~~382,~~506~~020

U.S. Agency mortgage-backed securities

4,~~887~~706

—2

—

4,~~887~~708

Corporate bonds

5,~~005~~001

—

(8923)

—

4,~~916~~978

Collateralized loan obligations

2226,~~825~~728

4431

—(18)

—

2226,~~869~~741

Total securities available for sale

$~~421~~419,~~663~~742

$~~1,602~~961

($42,~~087~~256)

$—

$~~419~~418,~~178~~447

(In Thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	~~Fair~~Allowance ~~Value~~for Credit Losses	Fair Value
September 30, 2025
March 31, 2026
Securities held to maturity
Corporate bonds	$3631,750	$~~594~~—	($~~861~~1,066)	$~~36,483~~—	$30,684
Allowance for credit losses	—	—	—	—
Total securities held to maturity	$31,750	$—	($1,066)	$—	$30,684
Total securities held to maturity, net of ACL	$36,750	$594	($861)	$36,483

(In Thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Allowance for Credit Losses	Fair Value
December 31, 2024
December 31, 2025
Securities available for sale
U.S. Treasury and government sponsored entities	$~~444~~389,~~370~~391	$~~294~~1,717	($112,~~733~~371)	$—	$~~432~~388,~~931~~737
Corporate bonds	9,009	9	(223)	—	8,795
U.S. Agency mortgage-backed securities	4,797	1	—		4,798
Collateralized loan obligations	36,827	66	(2)	—	36,891
Corporate bonds	5,003	—	(51)	—	4,952
Total securities available for sale	$490,206	$369	($11,958)	$—	$478,617
Collateralized loan obligations	22,141	33	—	—	22,174
Total securities available for sale	$421,332	$1,751	($2,422)	$—	$420,661

1412

(In Thousands)	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	~~Fair~~Allowance ~~Value~~for Credit Losses	Fair Value
December 31, 2024
December 31, 2025
Securities held to maturity
Corporate bonds	$3626,750	$~~175~~426	($~~1,175~~578)	$~~35,750~~—	$26,598
Allowance for credit losses	—	—	—	—
Total securities held to maturity	$26,750	$426	($578)	$—	$26,598
Total securities held to maturity, net of ACL	$36,750	$175	($1,175)	$35,750

Gross unrealized losses on available for sale securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 were as follows:

Less Than 12 Months

More Than 12 Months

Total

(In Thousands)

Fair Value

Unrealized Losses

Fair Value

Unrealized Losses

Fair Value

Unrealized Losses

September 30, 2025

March 31, 2026

Securities available for sale

U.S. Treasury and government sponsored entities

$19103,~~972~~212

($28598)

$~~265~~187,~~551~~086

($31,~~970~~617)

$~~285~~290,~~523~~298

($32,~~998~~215)

Corporate bonds

—

4,~~916~~978

(8923)

4,~~916~~978

(8923)

Collateralized loan obligations

—4,982

—(18)

—

—4,982

—(18)

Total

$19108,~~972~~194

($28616)

$~~270~~192,~~467~~064

($41,~~059~~640)

$~~290~~300,~~439~~258

($42,~~087~~256)

Securities Held to Maturity

Corporate bonds

$—4,773

($—227)

$10,~~889~~911

($~~861~~839)

$1015,~~889~~684

($~~861~~1,066)

Total

$—4,773

($—227)

$10,~~889~~911

($~~861~~839)

$1015,~~889~~684

($~~861~~1,066)

December 31, 2024

December 31, 2025

Securities available for sale

U.S. Treasury and government sponsored entities

$4419,~~262~~992

($~~422~~8)

$~~358~~236,~~446~~387

($112,~~311~~363)

$~~402~~256,~~708~~379

($112,~~733~~371)

Corporate bonds

—

4,~~786~~592

(~~223~~51)

4,~~786~~592

(~~223~~51)

Collateralized loan obligations

—

4,993

(2)

4,993

(2)

Total

$19,992

($8)

$240,979

($2,414)

$260,971

($2,422)

Total

$44,262

($422)

$368,225

($11,536)

$412,487

($11,958)

Securities Held to Maturity

Corporate bonds

$—

$2011,~~575~~172

($~~1,175~~578)

$2011,~~575~~172

($~~1,175~~578)

Total

$—

$2011,~~575~~172

($~~1,175~~578)

$2011,~~575~~172

($~~1,175~~578)

Management evaluates available for sale debt securities and securities held to maturity in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to the extent to which the fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At ~~September~~March 3031, ~~2025~~2026, the Company had ~~two~~16 available for sale securities in an unrealized loss position without an ACL that have been in a loss position for less than twelve months. There were 3022 available for sale securities without an ACL with unrealized losses at ~~September~~March 3031, ~~2025~~2026 that have been in a loss position for more than twelve months. At ~~September~~March 3031, ~~2025~~2026, the Company had two held to maturity securities in an unrealized loss position without an ACL that have been in a loss position for more than twelve months. There was one held to maturity security without an ACL with an unrealized loss at March 31, 2026 that had been in a loss position for less than twelve months. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of ~~September~~March 3031, ~~2025~~2026, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, primarily changes in interest rates and other market conditions, and therefore no losses have been recognized in the Company's Consolidated Statements of Income.

1513

At ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, carrying amounts of $~~211~~214.59 million and $~~177~~210.43 million in securities were pledged for deposits and borrowings, respectively.

The amortized cost and estimated fair values of available for sale and held to maturity debt securities at ~~September~~March 3031, ~~2025~~2026, are distributed by contractual maturity as shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In Thousands)	Amortized Cost	Fair Value
June 30, 2025
March 31, 2026
U.S. Treasury and government sponsored entities
Within 1 year	$~~184~~178,~~617~~702	$~~182~~177,~~120~~310
1-5 years	194,~~710~~866	194,~~515~~828
5-10 years	9,~~619~~739	9,~~871~~882
Total	$~~388~~383,~~946~~307	$~~386~~382,~~506~~020
U.S. Agency mortgage-backed securities
Over 10 years	$4,887	$4,887
5-10 years	$4,706	$4,708
Total	$4,~~887~~706	$4,~~887~~708
Corporate bonds
Within 1 year	$10,000	$10,015
1-5 years	$20,001	$19,978
1-5 years	5,005	4,916
5-10 years	16,750	15,684
5-10 years	26,750	26,468
Total	$36,751	$35,662
Total	$41,755	$41,399
Collateralized loan obligations
1-5 years	$—	$—
5-10 years	$7,728	$7,739
5-10 years	$17,825	$17,869
Over 10 years	19,000	19,002
Over 10 years	5,000	5,000
Total	$26,728	$26,741
Total	$22,825	$22,869

There were no proceeds from sales of investment securities for the three ~~and nine~~-month periods ending ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025.

A summary of interest income for the three ~~and nine~~-month periods ending ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, on available for sale investment securities are as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In Thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

U.S. Treasury and government sponsored entities

$2,~~224~~615

$2,~~443~~324

~~$6,963~~

~~$7,511~~

U.S. Agency mortgage-backed securities

6158

—4

~~114~~

—

Other

~~438~~332

~~965~~624

~~1,624~~

~~3,168~~

Total taxable interest income

$23,~~723~~005

$32,~~408~~952

~~$8,701~~

~~$10,679~~

Municipal securities

$—

Total tax-exempt interest income

$—

Total tax-exempt interest income

$—

Total

$3,005

$2,952

Total

$2,723

$3,408

$8,701

$10,682

1614

43. Loans and Allowance for Credit Losses

Loans Held for Sale

Loans held for sale are comprised entirely of 1-4 family residential mortgage loans as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025. The Company designates loans held for sale as either carried at fair value or the lower of cost or fair value at loan level at origination.

Loans Held for Investment

The following table presents amortized cost and unpaid principal balance of loans, categorized by the segments used in the Company's ~~Current Expected Credit Losses (“~~CECL”) methodology to assess credit risk, for the periods indicated:

September 30, 2025

December 31, 2024

March 31, 2026

December 31, 2025

(In Thousands)

Amortized Cost

Unpaid Principal

Difference

Amortized Cost

Unpaid Principal

Difference

Commercial & industrial loans

$~~474~~462,~~849~~998

$~~477~~465,~~205~~172

($2,~~356~~174)

$~~437~~450,~~922~~826

$~~440~~453,~~163~~153

($2,~~241~~327)

Commercial real estate:

Owner occupied properties

~~437~~435,~~995~~148

~~439~~436,~~971~~979

(1,~~976~~831)

~~418~~433,~~092~~157

~~420~~435,~~060~~050

(1,~~968~~893)

Non-owner occupied and multifamily properties

~~713~~765,~~315~~781

~~717~~770,~~576~~325

(4,~~261~~544)

~~615~~763,~~662~~180

~~619~~767,~~431~~617

(34,~~769~~437)

Residential real estate:

1-4 family residential properties secured by first liens

~~216~~264,~~598~~662

~~216~~264,~~690~~555

~~(92)~~107

~~270~~243,~~966~~185

~~270~~243,~~535~~167

~~431~~18

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens

6671,~~279~~207

6570,~~698~~464

~~581~~743

4967,~~160~~116

4866,~~857~~470

~~303~~646

1-4 family residential construction loans

3738,~~238~~679

3738,~~428~~900

(~~190~~221)

39,~~516~~059

39,~~789~~311

(~~273~~252)

Other construction, land development and raw land loans

~~183~~176,~~081~~715

~~184~~178,~~447~~029

(1,~~366~~314)

~~212~~173,~~561~~589

~~214~~175,~~068~~261

(1,~~507~~672)

Obligations of states and political subdivisions in the US

32,~~341~~312

32,~~340~~311

2932,~~471~~434

2932,~~468~~433

Agricultural production, including commercial fishing

4750,~~125~~133

4750,~~325~~371

(~~200~~238)

4547,~~840~~445

4647,~~069~~682

(~~229~~237)

Consumer loans

89,~~335~~205

89,~~237~~097

98108

79,~~638~~763

79,~~562~~659

76104

Other loans

151,~~814~~862

152,~~866~~058

(52196)

235,~~435~~745

235,~~448~~860

(13115)

Total

2,~~218~~358,~~970~~702

2,~~228~~368,~~783~~261

(9,~~813~~559)

2,~~129~~295,~~263~~499

2,~~138~~305,~~450~~663

(910,~~187~~164)

Allowance for credit losses

(2324,~~357~~812)

(2223,~~020~~737)

Net loans

$2,~~195~~333,~~613~~890

$2,~~228~~368,~~783~~261

($9,~~813~~559)

$2,~~107~~271,~~243~~762

$2,~~138~~305,~~450~~663

($910,~~187~~164)

The difference between the amortized cost and unpaid principal balance is net deferred origination fees totaling $9.86 million at ~~September~~March 3031, ~~2025~~2026 and $910.2 million at December 31, ~~2024~~2025.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $911.81 million and $89.46 million at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, respectively, and is included in other assets in the Consolidated Balance Sheets.

1715

Allowance for Credit Losses

The table below presents activity in the ACL related to loans held for investment for the periods indicated.

Three Months Ended September 30,

Beginning Balance

Credit Loss Expense (Benefit)

Charge-offs

Recoveries

Ending Balance

Three Months Ended March 31,

Beginning Balance

Credit Loss Expense (Benefit)

Charge-offs

Recoveries

Ending Balance

(In Thousands)

2025

2026

Commercial & industrial loans

$76,~~508~~707

($~~1,199~~123)

($~~1,300~~250)

$~~105~~37

$76,~~512~~371

Commercial real estate:

Owner occupied properties

2,~~271~~207

92291

—

30—

2,~~393~~498

Non-owner occupied and multifamily properties

4,~~183~~440

~~179~~812

—

45,~~362~~252

Residential real estate:

1-4 family residential properties secured by first liens

45,~~693~~712

~~271~~508

—

46,~~964~~220

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens

~~928~~1,041

7639

—

1,~~009~~083

1-4 family residential construction loans

~~270~~324

12(137)

—

~~282~~187

Other construction, land development and raw land loans

2,~~308~~839

~~113~~(224)

—

2,~~421~~615

Obligations of states and political subdivisions in the US

~~135~~143

(3)

—

~~132~~140

Agricultural production, including commercial fishing

~~197~~202

(9)

—

~~189~~212

Consumer loans

82114

38(10)

(342)

1—

87102

Other loans

108

~~(4)~~124

—

6132

Total

$2223,~~585~~737

$1,~~964~~286

($~~1,334~~252)

$~~142~~41

$2324,~~357~~812

2024

2025

Commercial & industrial loans

$45,~~047~~800

$~~153~~1,550

($—37)

$~~104~~74

$47,~~304~~387

Commercial real estate:

Owner occupied properties

2,~~963~~944

(42502)

—

2,~~921~~442

Non-owner occupied and multifamily properties

3,~~499~~967

~~273~~(11)

—

3,~~772~~956

Residential real estate:

1-4 family residential properties secured by first liens

34,~~489~~364

~~571~~(308)

—

4,~~060~~056

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens

~~665~~775

62(13)

—

~~733~~769

1-4 family residential construction loans

~~180~~230

62(11)

—

~~242~~219

Other construction, land development and raw land loans

23,~~526~~589

~~639~~(1,883)

—

31,~~165~~706

Obligations of states and political subdivisions in the US

~~100~~106

—17

—

~~100~~123

Agricultural production, including commercial fishing

~~157~~169

~~(3)~~16

—

~~155~~187

Consumer loans

6171

2512

(1513)

—1

Other loans

~~(2)~~1

—

Total

$1722,~~694~~020

($1,~~738~~132)

($1550)

$~~111~~84

$1920,~~528~~922

1816

Nine Months Ended September 30,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2025
Commercial & industrial loans	$5,800	$3,017	($1,489)	$184	$7,512
Commercial real estate:
Owner occupied properties	2,944	(581)	—	30	2,393
Non-owner occupied and multifamily properties	3,967	395	—	—	4,362
Residential real estate:
1-4 family residential properties secured by first liens	4,364	600	—	—	4,964
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	775	215	—	19	1,009
1-4 family residential construction loans	230	52	—	—	282
Other construction, land development and raw land loans	3,589	(1,168)	—	—	2,421
Obligations of states and political subdivisions in the US	106	26	—	—	132
Agricultural production, including commercial fishing	169	16	—	4	189
Consumer loans	71	62	(50)	4	87
Other loans	5	1	—	—	6
Total	$22,020	$2,635	($1,539)	$241	$23,357
2024
Commercial & industrial loans	$3,438	$684	$—	$182	$4,304
Commercial real estate:
Owner occupied properties	2,867	54	—	—	2,921
Non-owner occupied and multifamily properties	3,294	478	—	—	3,772
Residential real estate:
1-4 family residential properties secured by first liens	3,470	590	—	—	4,060
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	551	166	—	16	733
1-4 family residential construction loans	191	51	—	—	242
Other construction, land development and raw land loans	3,127	38	—	—	3,165
Obligations of states and political subdivisions in the US	80	20	—	—	100
Agricultural production, including commercial fishing	168	7	(25)	5	155
Consumer loans	81	4	(15)	1	71
Other loans	3	2	—	—	5
Total	$17,270	$2,094	($40)	$204	$19,528

The following table shows gross charge-offs by year of loan origination for the periods indicated:

Nine Months Ended September 30,
Three Months Ended March 31,
(In Thousands)	~~2025~~2026	~~2024~~2025	~~2023~~2024	~~2022~~2023	~~2021~~2022	Prior	Total
2025
2026
Commercial & industrial loans	$—	$~~152~~—	$—250	$—	$~~1,337~~—	$—	$~~1,489~~250
Consumer loans	10—	—	6—	—2	—	34—	502
Total	$10—	$~~152~~—	$6250	$—2	$~~1,337~~—	$34—	$~~1,539~~252

Credit Quality Information

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management utilizes a loan risk grading system called the Asset Quality Rating (“AQR”) system to assign a risk classification to each of its loans. The risk classification is a dual rating system that contemplates both probability of default and risk of loss given default. Loans are graded on a scale of 1 to 10 and, loans graded 1 – 6 are considered “pass” grade loans. Loans graded 7 or higher are considered “criticized” loans. A description of the general characteristics of the AQR risk classifications are as follows:

Pass grade loans – 1 through 6: The borrower demonstrates sufficient cash flow to fund debt service, including acceptable profit margins, cash flows, liquidity and other balance sheet ratios. Historic and projected performance indicates that the borrower is able to meet obligations under most economic circumstances. The borrower has competent management with an acceptable track record. The category does not include loans with undue or unwarranted credit risks that constitute identifiable weaknesses.

Criticized loans:

Special Mention – 7: A “special mention” credit has weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset at some future date.

Substandard – 8: A “substandard” credit is inadequately protected by the current worth and paying capacity of the obligor or by the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – 9: An asset classified “doubtful” has all the weaknesses inherent in one that is classified "substandard-8" with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. The loan has substandard characteristics, and available information suggests that it is unlikely that the loan will be repaid in its entirety.

Loss – 10: An asset classified “loss” is considered uncollectible and of such little value that its continuance on the books is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset, even though partial recovery may be affected in the future.

The following tables present the Company's portfolio of risk-rated loans by grade and by year of origination. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below.

September 30, 2025

2025

2024

2023

2022

2021

Prior

Total

March 31, 2026

2026

2025

2024

2023

2022

Prior

Total

(In Thousands)

Commercial & industrial loans

Pass

$7833,~~803~~053

$92114,~~276~~312

$6168,~~482~~658

$~~102~~60,~~490~~931

$2672,~~749~~704

$6568,~~082~~154

$~~426~~417,~~882~~812

Criticized

~~3,342~~—

31,~~774~~018

73,~~434~~368

166,~~718~~528

1016,~~090~~876

617,~~609~~396

4745,~~967~~186

Total commercial & industrial loans

$8233,~~145~~053

$96115,~~050~~330

$6872,~~916~~026

$~~119~~67,~~208~~459

$3689,~~839~~580

$7185,~~691~~550

$~~474~~462,~~849~~998

Commercial real estate:

Owner occupied properties

Pass

$2824,~~761~~693

$7636,~~787~~665

$2673,~~643~~810

$6843,~~454~~573

$5863,~~411~~385

$~~157~~173,~~679~~442

$~~416~~415,~~735~~568


Criticized	—	6,002	—	—	3,651	9,927	19,580
Total commercial real estate owner occupied properties	$24,693	$42,667	$73,810	$43,573	$67,036	$183,369	$435,148

Non-owner occupied and multifamily properties
Pass	$7,570	$122,470	$143,470	$67,331	$136,715	$278,449	$756,005
Criticized	—	—	—	—	1,143	8,633	9,776
Total commercial real estate non-owner occupied and multifamily properties	$7,570	$122,470	$143,470	$67,331	$137,858	$287,082	$765,781

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$26,958	$67,982	$52,748	$72,543	$32,516	$11,248	$263,995
Criticized	—	—	—	499	—	168	667
Total residential real estate 1-4 family residential properties secured by first liens	$26,958	$67,982	$52,748	$73,042	$32,516	$11,416	$264,662

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$5,517	$21,491	$18,573	$9,846	$5,936	$9,331	$70,694
Criticized	—	—	—	430	—	83	513
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$5,517	$21,491	$18,573	$10,276	$5,936	$9,414	$71,207

1-4 family residential construction loans
Pass	$3,283	$20,715	$5,253	$65	$—	$9,363	$38,679
Criticized	—	—	—	—	—	—	—
Total residential real estate 1-4 family residential construction loans	$3,283	$20,715	$5,253	$65	$—	$9,363	$38,679

Other construction, land development and raw land loans
Pass	$2,671	$63,796	$33,710	$39,143	$13,383	$16,281	$168,984
Criticized	—	—	—	—	6,277	1,454	7,731
Total other construction, land development and raw land loans	$2,671	$63,796	$33,710	$39,143	$19,660	$17,735	$176,715

Obligations of states and political subdivisions in the US
Pass	$—	$—	$4,603	$—	$27,709	$—	$32,312
Criticized	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$—	$4,603	$—	$27,709	$—	$32,312

Agricultural production, including commercial fishing
Pass	$2,770	$3,364	$8,757	$7,931	$8,872	$18,439	$50,133
Criticized	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$2,770	$3,364	$8,757	$7,931	$8,872	$18,439	$50,133

Consumer loans
Pass	$893	$3,691	$1,752	$1,494	$434	$939	$9,203
Criticized	—	—	—	—	2	—	2
Total consumer loans	$893	$3,691	$1,752	$1,494	$436	$939	$9,205

Other loans
Pass	$14,085	$—	$—	$331	$35,683	$1,763	$51,862
Criticized	—	—	—	—	—	—	—
Total other loans	$14,085	$—	$—	$331	$35,683	$1,763	$51,862

Total loans
Pass	$121,493	$454,486	$411,334	$303,188	$397,337	$587,409	$2,275,247
Criticized	—	7,020	3,368	7,457	27,949	37,661	83,455
Total loans	$121,493	$461,506	$414,702	$310,645	$425,286	$625,070	$2,358,702

Total pass loans	$121,493	$454,486	$411,334	$303,188	$397,337	$587,409	$2,275,247
Government guarantees	(16,430)	(18,033)	(33,420)	(4,818)	(4,649)	(28,447)	(105,797)
Total pass loans, net of government guarantees	$105,063	$436,453	$377,914	$298,370	$392,688	$558,962	$2,169,450


Total criticized loans	$—	$7,020	$3,368	$7,457	$27,949	$37,661	$83,455
Government guarantees	—	—	—	(1,928)	(16,734)	(22,470)	(41,132)
Total criticized loans, net government guarantees	$—	$7,020	$3,368	$5,529	$11,215	$15,191	$42,323


December 31, 2025	2025	2024	2023	2022	2021	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$140,717	$73,544	$61,463	$64,841	$24,046	$40,558	$405,169
Criticized	—	3,540	5,905	16,590	12,845	6,777	45,657
Total commercial & industrial loans	$140,717	$77,084	$67,368	$81,431	$36,891	$47,335	$450,826

Commercial real estate:
Owner occupied properties
Pass	$34,589	$70,158	$61,563	$67,334	$52,207	$126,589	$412,440
Criticized	6,002	—	—	3,674	—	11,041	20,717
Total commercial real estate owner occupied properties	$40,591	$70,158	$61,563	$71,008	$52,207	$137,630	$433,157

Non-owner occupied and multifamily properties
Pass	$136,992	$119,749	$68,208	$138,103	$67,826	$221,420	$752,298
Criticized	—	—	—	1,143	—	9,739	10,882
Total commercial real estate non-owner occupied and multifamily properties	$136,992	$119,749	$68,208	$139,246	$67,826	$231,159	$763,180

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$67,166	$53,573	$75,846	$33,276	$2,953	$9,684	$242,498
Criticized	—	—	514	—	—	173	687
Total residential real estate 1-4 family residential properties secured by first liens	$67,166	$53,573	$76,360	$33,276	$2,953	$9,857	$243,185

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$21,690	$18,943	$10,356	$5,820	$2,924	$6,866	$66,599
Criticized	—	—	430	—	—	87	517
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$21,690	$18,943	$10,786	$5,820	$2,924	$6,953	$67,116

1-4 family residential construction loans
Pass	$23,151	$5,946	$—	$—	$—	$9,962	$39,059
Criticized	—	—	—	—	—	—	—
Total residential real estate 1-4 family residential construction loans	$23,151	$5,946	$—	$—	$—	$9,962	$39,059

Other construction, land development and raw land loans
Pass	$53,248	$45,743	$38,772	$13,462	$9,175	$5,455	$165,855
Criticized	—	—	—	6,277	26	1,431	7,734
Total other construction, land development and raw land loans	$53,248	$45,743	$38,772	$19,739	$9,201	$6,886	$173,589

Obligations of states and political subdivisions in the US
Pass	$—	$4,569	$—	$27,864	$—	$1	$32,434
Criticized	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$4,569	$—	$27,864	$—	$1	$32,434

Agricultural production, including commercial fishing
Pass	$3,142	$8,770	$7,950	$8,924	$14,908	$3,631	$47,325
Criticized	—	—	—	—	120	—	120
Total agricultural production, including commercial fishing	$3,142	$8,770	$7,950	$8,924	$15,028	$3,631	$47,445

Consumer loans
Pass	$4,757	$1,848	$1,646	$507	$32	$969	$9,759


Criticized	—	—	2	2	—	—	4
Total consumer loans	$4,757	$1,848	$1,648	$509	$32	$969	$9,763

Other loans
Pass	$—	$—	$639	$33,315	$588	$1,203	$35,745
Criticized	—	—	—	—	—	—	—
Total other loans	$—	$—	$639	$33,315	$588	$1,203	$35,745

Total loans
Pass	$485,452	$402,843	$326,443	$393,446	$174,659	$426,338	$2,209,181
Criticized	6,002	3,540	6,851	27,686	12,991	29,248	86,318
Total loans	$491,454	$406,383	$333,294	$421,132	$187,650	$455,586	$2,295,499

Total pass loans	$485,452	$402,843	$326,443	$393,446	$174,659	$426,338	$2,209,181
Government guarantees	(17,804)	(29,791)	(19,923)	(4,766)	(10,173)	(17,368)	(99,825)
Total pass loans, net of government guarantees	$467,648	$373,052	$306,520	$388,680	$164,486	$408,970	$2,109,356

Total criticized loans	$6,002	$3,540	$6,851	$27,686	$12,991	$29,248	$86,318
Government guarantees	—	—	(1,641)	(16,831)	(11,567)	(12,300)	(42,339)
Total criticized loans, net government guarantees	$6,002	$3,540	$5,210	$10,855	$1,424	$16,948	$43,979

Criticized	6,002	—	—	3,714	—	11,544	21,260
Total commercial real estate owner occupied properties	$34,763	$76,787	$26,643	$72,168	$58,411	$169,223	$437,995
Non-owner occupied and multifamily properties
Pass	$86,594	$119,808	$67,965	$139,372	$68,335	$220,286	$702,360
Criticized	—	—	—	1,148	—	9,807	10,955
Total commercial real estate non-owner occupied and multifamily properties	$86,594	$119,808	$67,965	$140,520	$68,335	$230,093	$713,315
Residential real estate:
1-4 family residential properties secured by first liens
Pass	$34,925	$56,016	$78,120	$33,950	$2,596	$9,983	$215,590
Criticized	—	—	518	313	—	177	1,008
Total residential real estate 1-4 family residential properties secured by first liens	$34,925	$56,016	$78,638	$34,263	$2,596	$10,160	$216,598
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$19,204	$20,059	$10,878	$5,726	$2,947	$7,004	$65,818
Criticized	—	—	372	—	—	89	461
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$19,204	$20,059	$11,250	$5,726	$2,947	$7,093	$66,279
1-4 family residential construction loans
Pass	$19,745	$7,232	$—	$—	$—	$10,261	$37,238
Criticized	—	—	—	—	—	—	—
Total residential real estate 1-4 family residential construction loans	$19,745	$7,232	$—	$—	$—	$10,261	$37,238
Other construction, land development and raw land loans
Pass	$40,608	$55,620	$53,712	$14,549	$9,273	$7,542	$181,304
Criticized	—	—	—	282	27	1,468	1,777
Total other construction, land development and raw land loans	$40,608	$55,620	$53,712	$14,831	$9,300	$9,010	$183,081
Obligations of states and political subdivisions in the US
Pass	$—	$4,389	$—	$27,952	$—	$—	$32,341
Criticized	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$4,389	$—	$27,952	$—	$—	$32,341
Agricultural production, including commercial fishing
Pass	$1,601	$7,995	$8,189	$9,817	$15,455	$3,931	$46,988
Criticized	—	—	—	—	137	—	137
Total agricultural production, including commercial fishing	$1,601	$7,995	$8,189	$9,817	$15,592	$3,931	$47,125
Consumer loans
Pass	$2,970	$1,985	$1,791	$542	$37	$997	$8,322
Criticized	—	10	—	3	—	—	13
Total consumer loans	$2,970	$1,995	$1,791	$545	$37	$997	$8,335
Other loans
Pass	$—	$—	$235	$79	$277	$1,223	$1,814
Criticized	—	—	—	—	—	—	—
Total other loans	$—	$—	$235	$79	$277	$1,223	$1,814
Total loans
Pass	$313,211	$442,167	$309,015	$402,931	$184,080	$483,988	$2,135,392
Criticized	9,344	3,784	8,324	22,178	10,254	29,694	83,578
Total loans	$322,555	$445,951	$317,339	$425,109	$194,334	$513,682	$2,218,970
Total pass loans	$313,211	$442,167	$309,015	$402,931	$184,080	$483,988	$2,135,392
Government guarantees	(12,013)	(34,650)	(19,438)	(4,818)	(11,325)	(14,465)	(96,709)
Total pass loans, net of government guarantees	$301,198	$407,517	$289,577	$398,113	$172,755	$469,523	$2,038,683

Total criticized loans	$9,344	$3,784	$8,324	$22,178	$10,254	$29,694	$83,578
Government guarantees	—	—	(1,686)	(16,939)	(8,923)	(12,555)	(40,103)
Total criticized loans, net government guarantees	$9,344	$3,784	$6,638	$5,239	$1,331	$17,139	$43,475

December 31, 2024	2024	2023	2022	2021	2020	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$112,361	$70,871	$120,377	$37,628	$10,581	$40,288	$392,106
Criticized	201	3,386	16,888	14,973	5,759	4,609	45,816
Total commercial & industrial loans	$112,562	$74,257	$137,265	$52,601	$16,340	$44,897	$437,922
Commercial real estate:
Owner occupied properties
Pass	$68,074	$48,655	$74,611	$64,234	$74,662	$74,987	$405,223
Criticized	—	—	492	—	348	12,029	12,869
Total commercial real estate owner occupied properties	$68,074	$48,655	$75,103	$64,234	$75,010	$87,016	$418,092
Non-owner occupied and multifamily properties
Pass	$114,879	$70,806	$104,924	$73,008	$65,592	$175,349	$604,558
Criticized	—	—	1,166	30	—	9,908	11,104
Total commercial real estate non-owner occupied and multifamily properties	$114,879	$70,806	$106,090	$73,038	$65,592	$185,257	$615,662
Residential real estate:
1-4 family residential properties secured by first liens
Pass	$103,919	$108,642	$43,562	$3,279	$4,228	$6,978	$270,608
Criticized	—	205	—	—	—	153	358
Total residential real estate 1-4 family residential properties secured by first liens	$103,919	$108,847	$43,562	$3,279	$4,228	$7,131	$270,966
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$18,946	$13,553	$5,116	$2,695	$2,097	$6,083	$48,490
Criticized	—	372	—	—	—	298	670
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$18,946	$13,925	$5,116	$2,695	$2,097	$6,381	$49,160
1-4 family residential construction loans
Pass	$25,458	$4,118	$2,353	$—	$—	$7,587	$39,516
Criticized	—	—	—	—	—	—	—
Total residential real estate 1-4 family residential construction loans	$25,458	$4,118	$2,353	$—	$—	$7,587	$39,516
Other construction, land development and raw land loans
Pass	$63,430	$60,693	$51,809	$25,836	$1,236	$7,942	$210,946
Criticized	—	—	—	—	—	1,615	1,615
Total other construction, land development and raw land loans	$63,430	$60,693	$51,809	$25,836	$1,236	$9,557	$212,561
Obligations of states and political subdivisions in the US
Pass	$—	$—	$29,471	$—	$—	$—	$29,471
Criticized	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$—	$29,471	$—	$—	$—	$29,471
Agricultural production, including commercial fishing
Pass	$8,097	$8,776	$8,380	$15,847	$3,109	$1,631	$45,840
Criticized	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$8,097	$8,776	$8,380	$15,847	$3,109	$1,631	$45,840
Consumer loans
Pass	$3,346	$2,377	$717	$75	$252	$820	$7,587

Criticized	—	45	5	—	—	1	51
Total consumer loans	$3,346	$2,422	$722	$75	$252	$821	$7,638
Other loans
Pass	$—	$345	$122	$285	$1,683	$—	$2,435
Criticized	—	—	—	—	—	—	—
Total other loans	$—	$345	$122	$285	$1,683	$—	$2,435
Total loans
Pass	$518,510	$388,836	$441,442	$222,887	$163,440	$321,665	$2,056,780
Criticized	201	4,008	18,551	15,003	6,107	28,613	72,483
Total loans	$518,711	$392,844	$459,993	$237,890	$169,547	$350,278	$2,129,263
Total pass loans	$518,510	$388,836	$441,442	$222,887	$163,440	$321,665	$2,056,780
Government guarantees	(35,244)	(12,421)	(7,727)	(13,785)	(1,591)	(17,276)	(88,044)
Total pass loans, net of government guarantees	$483,266	$376,415	$433,715	$209,102	$161,849	$304,389	$1,968,736
Total criticized loans	$201	$4,008	$18,551	$15,003	$6,107	$28,613	$72,483
Government guarantees	—	(1,640)	(14,816)	(13,476)	(5,183)	(7,963)	(43,078)
Total criticized loans, net government guarantees	$201	$2,368	$3,735	$1,527	$924	$20,650	$29,405

Past Due Loans: The following tables present an aging of contractually past due loans as of the periods presented:

(In Thousands)	30-59 DaysPast Due	60-89 DaysPast Due	Greater Than90 Days Past Due	Total PastDue	Current	Total	Greater Than 90 Days Past Due Still Accruing
September 30, 2025
March 31, 2026
Commercial & industrial loans	$—	$—728	$1,~~661~~020	$1,~~661~~748	$~~473~~461,~~188~~250	$~~474~~462,~~849~~998	$~~1,375~~—
Commercial real estate:
Owner occupied properties	—481	—	—	—481	~~437~~434,~~995~~667	~~437~~435,~~995~~148	—
Non-owner occupied and multifamily properties	—	—	—1,143	—1,143	~~713~~764,~~315~~638	~~713~~765,~~315~~781	—
Residential real estate:
1-4 family residential properties secured by first liens	—1,645	~~475~~—	~~197~~188	~~672~~1,833	~~215~~262,~~926~~829	~~216~~264,~~598~~662	~~313~~—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	~~103~~70	69—	372	~~544~~442	6570,~~735~~765	6671,~~279~~207	—
1-4 family residential construction loans	—	—	—	—	3738,~~238~~679	3738,~~238~~679	—
Other construction, land development and raw land loans	—	—	1,~~413~~654	1,~~413~~654	~~181~~175,~~668~~061	~~183~~176,~~081~~715	—
Obligations of states and political subdivisions in the US	—	—	—	—	32,~~341~~312	32,~~341~~312	—
Agricultural production, including commercial fishing	—	—	—	—	4750,~~125~~133	4750,~~125~~133	—
Consumer loans	—3	—	10—	103	89,~~325~~202	89,~~335~~205	—
Other loans	—	—	—	—	151,~~814~~862	151,~~814~~862	—
Total	$~~103~~2,199	$~~544~~728	$34,~~653~~377	$47,~~300~~304	$2,~~214~~351,~~670~~398	$2,~~218~~358,~~970~~702	$~~1,688~~—
December 31, 2024
December 31, 2025
Commercial & industrial loans	$~~718~~190	$—	$1,~~558~~500	$21,~~276~~690	$~~435~~449,~~646~~136	$~~437~~450,~~922~~826	$—
Commercial real estate:
Owner occupied properties	—	~~492~~—	~~224~~—	~~716~~—	~~417~~433,~~376~~157	~~418~~433,~~092~~157	—
Non-owner occupied and multifamily properties	—	—	—	—	~~615~~763,~~662~~180	~~615~~763,~~662~~180	—
Residential real estate:
1-4 family residential properties secured by first liens	~~712~~1,505	~~323~~—	~~205~~514	12,~~240~~019	~~269~~241,~~726~~166	~~270~~243,~~966~~185	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—194	—	~~466~~372	~~466~~566	4866,~~694~~550	4967,~~160~~116	17—
1-4 family residential construction loans	—	—	94—	94—	39,~~422~~059	39,~~516~~059	—
Other construction, land development and raw land loans	—	—277	1,~~432~~377	1,~~432~~654	~~211~~171,~~129~~935	~~212~~173,~~561~~589	—
Obligations of states and political subdivisions in the US	—	—	—	—	2932,~~471~~434	2932,~~471~~434	—
Agricultural production, including commercial fishing	—	—	—	—	4547,~~840~~445	4547,~~840~~445	—
Consumer loans	—	—2	—	—2	79,~~638~~761	79,~~638~~763	—
Other loans	—	—	—	—	235,~~435~~745	235,~~435~~745	—
Total	$1,~~430~~889	$~~815~~279	$3,~~979~~763	$65,~~224~~931	$2,~~123~~289,~~039~~568	$2,~~129~~295,~~263~~499	$17—

2421

Nonaccrual loans: Nonaccrual loans net of government guarantees totaled $914.62 million and $712.50 million at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, respectively. The following table presents loans on nonaccrual status and loans on nonaccrual status for the periods presented for which there was no related ACL. All loans with no ACL are individually evaluated for credit losses in the Company's CECL methodology.

	September 30, 2025		December 31, 2024
	March 31, 2026			December 31, 2025
(In Thousands)	Nonaccrual	Nonaccrual With No ACL	ACL on Nonaccrual	Nonaccrual ~~With No ACL~~	Nonaccrual With No ACL	ACL on Nonaccrual
Commercial & industrial loans	$76,~~716~~079	$72,~~116~~022	$41,~~983~~841	$4,~~760~~251	$1,641	$1,248
Commercial real estate:
Owner occupied properties	—4,994	—2,652	~~224~~69	~~224~~5,134	2,725	86
Residential real estate:
Non-owner occupied and multifamily properties	1,143	—	379	—	—	—
1-4 family residential properties secured by first liens	197	—	233	—
Residential real estate:
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	417	372	550	466
1-4 family residential properties secured by first liens	499	188	47	514	—	60
1-4 family residential construction loans	—	—	94	94
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	412	372	1	415	372	1
Other construction, land development and raw land loans	1,~~413~~654	1,~~413~~654	~~1,432~~—	1,~~432~~654	1,654	—
Consumer loans	10	—	—	—
Total nonaccrual loans	14,781	6,888	2,337	11,968	6,392	1,395
Total nonaccrual loans	9,753	8,901	7,516	6,976
Government guarantees on nonaccrual loans	(567)	(567)	—	—	—	—
Government guarantees on nonaccrual loans	(189)	(69)	—	—
Net nonaccrual loans	$14,214	$6,321	$2,337	$11,968	$6,392	$1,395
Net nonaccrual loans	$9,564	$8,832	$7,516	$6,976

There was no interest on nonaccrual loans reversed through interest income during the three ~~or nine~~-month periods ending ~~September~~March 3031, ~~2025~~2026 or ~~September~~March 3031, ~~2024~~2025.

There was no interest earned on nonaccrual loans with a principal balance during the ~~nine~~three-month periods ending ~~September~~March 3031, ~~2025~~2026 and ~~September~~March 3031, ~~2024~~2025. However, the Company recognized interest income of $~~143~~68,000 and $1142,000 in the three-month periods ending ~~September~~March 3031, ~~2025~~2026 and ~~2024, respectively, and $230,000 and $246,000 in the nine-month periods ending September 30,~~ 2025 ~~and 2024~~, respectively, related to interest collected on nonaccrual loans whose principal had been paid down to zero.

Loan Modifications: The Company modifies loans to borrowers experiencing financial difficulty as a normal part of our business. These modifications include providing term extensions/modifications, payment modifications, interest rate modifications, or, on rare occasions, principal forgiveness. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. The Company may provide multiple types of concessions on any one loan.

The following table shows the amortized cost basis of the loans that were both experiencing financial difficulty and modified during the periods indicated, by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below:

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Payment Modification

Term and payment modifications

Total Modifications

Percentage of Class of Financing Receivable

(In Thousands)

Commercial real estate:

Owner occupied properties

$—

—

Total

$—

—

2522

	Three Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	Payment Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$—	$195	$195	0.05	%
Commercial real estate:
Residential real estate:
Owner occupied properties	$—	$3,252	$3,252	0.76	%
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	372	—	372	0.82	%
Total	$—	$3,252	$3,252	0.15	%
Total	$372	$195	$567	0.03	%

	Nine Months Ended September 30, 2025
	Term Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial real estate:
Owner occupied properties	$—	$3,252	$3,252	0.74	%
Total	$—	$3,252	$3,252	0.15	%

	Nine Months Ended September 30, 2024
	Term Modification	Payment Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$4,033	$—	$448	$4,481	1.08	%
Residential real estate:
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	372	—	372	0.82	%
Total	$4,033	$372	$448	$4,853	0.24	%

The Company has no outstanding unfunded commitments to the borrowers included in the previous table.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty as of the dates indicated:

	Three Months Ended September 30, 2025
	Three Months Ended March 31, 2026
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial real estate:
Owner occupied properties	$—	—	%	0

	Three Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	—	%	73
Commercial real estate:
Owner occupied properties	$—	—	%	33

	Nine Months Ended September 30, 2025
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial real estate:
Owner occupied properties	$—	—	%	33

	Nine Months Ended September 30, 2024
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	8	%	10

The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty as of the dates indicated. These are loans that have been modified within twelve months of the dates indicated:

(In Thousands)	~~September~~March 3031, ~~2025~~2026	December 31, ~~2024~~2025
Commercial & industrial loans	$~~150~~219	$~~5,075~~142
Commercial real estate:
Owner occupied properties	3,~~230~~171	~~224~~3,193
Residential real estate:
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	372	~~466~~372
1-4 family residential construction loans	—	94—
Other construction, land development and raw land loans	1,~~413~~376	1,~~432~~376
Total	$5,~~165~~138	$75,~~291~~083

2723

The following table presents the amortized cost basis of loans that had a payment default during the periods indicated and were modified in the twelve months before default to borrowers experiencing financial difficulty:

Three Months Ended September 30, 2025

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Term and payment modification

Term modification

Term and payment modification

(In Thousands)

Commercial real estate:

Owner occupied properties

$~~3,230~~—

$~~3,230~~733

Total

$3,230

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens

372

—

Other construction, land development and raw land loans

—

Total

$1,748

$733

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Term modification

~~Term modification~~

(In Thousands)

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens

$—

~~$100~~

1-4 family residential construction loans

—

Total

$—

Other construction, land development and raw land loans

—

778

Total

$—

$977

The Company monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the payment performance of loans that have been modified in the last twelve months as of the date indicated:

September 30, 2025

March 31, 2026

Greater Than 89 Days Past Due

Total Past Due

Current

Total

(In Thousands)

Commercial & industrial loans

$—

$~~150~~219

Commercial real estate:

Owner occupied properties

—

3,~~230~~171

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens

372

—

372

Other construction, land development and raw land loans

1,~~413~~376

—

1,~~413~~376

Total

$1,~~785~~748

$3,~~380~~390

$5,~~165~~138

2824

	September 30, 2024
	March 31, 2025
	60-89 Days Past Due		Greater Than 89 Days Past Due	Total Past Due	Current	Total
(In Thousands)
Commercial & industrial loans	$	—	$—	$—	$4,~~482~~318	$4,~~482~~318
Commercial real estate:
Owner occupied properties	—		~~231~~217	~~231~~217	—3,251	~~231~~3,468
Residential real estate:
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	~~100~~—		—460	~~100~~460	~~372~~—	~~472~~460
1-4 family residential construction loans	—		99	99	—	99
Other construction, land development and raw land loans	—		1,490	1,490	—	1,490
Other construction, land development and raw land loans	345		1,128	1,473	—	1,473
Total	$—		$2,167	$2,167	$7,569	$9,736
Total	$445		$1,458	$1,903	$4,854	$6,757

Upon the Company's determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.

54. Purchased Receivables

Purchased receivables are carried at their principal amount outstanding, net of an ACL, and have a maturity of less than one year. Income on purchased receivables is accrued and recognized on the principal amount outstanding using an effective interest method except when management believes doubt exists as to the collectability of the income or principal. There were ~~six~~no nonperforming purchased receivables ~~with a balance of $2.3 million~~ as of ~~September~~March 3031, ~~2025~~2026 and there ~~were~~was ~~four~~one nonperforming purchased receivable with a balance of $~~3.8~~67,000 ~~million~~ as of December 31, ~~2024~~2025 for which management was not accruing income.

The following table summarizes the components of net purchased receivables for the dates indicated:

(In Thousands)	~~September~~March 3031, ~~2025~~2026	December 31, ~~2024~~2025
Purchased receivables	$~~109~~105,~~977~~029	$77101,~~727~~642
Allowance for credit losses - purchased receivables	~~(1,924)~~—	~~(3,649)~~—
Total	$~~108~~105,~~053~~029	$74101,~~078~~642

The following table sets forth information regarding changes in the ACL on purchased receivables for the periods indicated:

	Three Months Ended September 30,		Nine Months Ended September 30,
		Three Months Ended March 31,
(In Thousands)	~~2025~~	~~2024~~	~~2025~~2026	~~2024~~2025
Balance at beginning of period	~~$3,432~~	$—	$~~3,649~~—	$—3,649
Adjustment related to PCD collections payable to sellers1	(1,513)	—	(1,513)	—
Charge-offs			—	—
Charge-offs	—	—	(281)	—
Recoveries			5	—
Recoveries	20	—	20	—
Charge-offs net of recoveries			5	—
Charge-offs net of recoveries	20	—	(261)	—
(Benefit) / provision for purchased receivables			(5)	46
(Benefit) / provision for purchased receivables	(15)	—	49	—
Balance at end of period			$—	$3,695
Balance at end of period	$1,924	$—	$1,924	$—

1Represents a reduction in the allowance for credit losses on a purchased credit deteriorated purchased receivable acquired in 2024 in connection with the Sallyport acquisition. Collections received during the period presented above are contractually payable to the sellers under the purchase agreement if collected within one year of the acquisition of SCF. Accordingly, the decrease in the allowance was offset by the recognition of a liability to the sellers, and no benefit was recognized in the provision for credit losses.25

65. Servicing Rights

Mortgage servicing rights

The following table details the activity in the Company's mortgage servicing rights (“MSR”) for the three ~~and nine~~-month periods ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025:

Three Months Ended September 30, 2025

Nine Months Ended September 30,

Three Months Ended March 31,

(In Thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Balance, beginning of period

$27,~~506~~474

$2126,~~077~~439

~~$26,439~~

~~$19,564~~

Additions for new MSR capitalized

1,~~540~~079

1,~~461~~230

~~4,280~~

~~3,080~~

Changes in fair value:

Due to changes in model inputs of assumptions (1)

~~(638)~~463

(~~566~~322)

~~(1,315)~~

~~(38)~~

Other (2)

(~~612~~590)

(~~402~~533)

~~(1,608)~~

~~(1,036)~~

Balance, end of period

$2728,~~796~~426

$2126,~~570~~814

~~$27,796~~

~~$21,570~~

(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

(2) Represents changes due to collection/realization of expected cash flows over time.

30The following table details information related to our serviced mortgage loan portfolio as of March 31, 2026 and December 31, 2025:

The following table details information related to our serviced mortgage loan portfolio as of September 30, 2025 and December 31, 2024:


(In Thousands)	March 31, 2026		December 31, 2025

Balance of mortgage loans serviced for others	$1,642,195		$1,629,528
Weighted average rate of note	4.80	%	4.77	%
MSR as a percentage of serviced loans	1.73	%	1.69	%

(In Thousands)	September 30, 2025		December 31, 2024
Balance of mortgage loans serviced for others	$1,601,174		$1,460,720
Weighted average rate of note	4.69	%	4.46	%
MSR as a percentage of serviced loans	1.74	%	1.81	%

The Company recognized servicing fees of $1.6 million and $1.5 million during the three-month periods ending March 31, 2026 and 2025, respectively, which includes contractually specified servicing fees and ancillary fees as a component of other noninterest income in the Company's Consolidated Statements of Income.

The Company recognized servicing fees of $1.5 million and $1.1 million during the three-month periods ending September 30, 2025 and 2024, respectively, and $4.4 million and $3.2 million during the nine-month periods ending September 30, 2025 and 2024, respectively, which includes contractually specified servicing fees and ancillary fees as a component of other noninterest income in the Company's Consolidated Statements of Income. 26

The following table outlines the weighted average key assumptions used in measuring the fair value of MSRs and the sensitivity of the current fair value of MSRs to immediate adverse changes in those assumptions as of the dates indicated. See Note 9 for additional information on key assumptions for MSR fair value determinations.

(In Thousands)	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
Fair value of MSRs	$2728,~~796~~426		$2627,~~439~~474
Expected weighted-average life (in years)	9.1208		98.5182
Key assumptions:
Constant prepayment rate1	9.6065	%	910.0901	%
Impact on fair value from 10% adverse change	($~~980~~1,044)		($~~935~~1,022)
Impact on fair value from 25% adverse change	($2,~~331~~482)		($2,~~222~~427)
Discount rate	10.9701	%	10.9997	%
Impact on fair value from 100 basis point increase	($1,~~070~~109)		($~~1,592~~871)
Impact on fair value from 200 basis point increase	($2,~~053~~134)		($21,~~544~~864)
Cost to service assumptions ($ per loan)	$81		$81
Impact on fair value from 10% adverse change	($~~235~~243)		($~~235~~239)
Impact on fair value from 25% adverse change	($~~589~~608)		($~~588~~597)

1Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

These sensitivities in the preceding table are hypothetical and caution should be exercised when relying on this data. Changes in value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in the value may not be linear. Also, the effect of a variation in a particular assumption on the value of the MSR held is calculated independently without changing any other assumptions. In reality, changes in one factor may result in changes in others, which might magnify or counteract the sensitivities.

Commercial servicing rights

The commercial servicing rights asset (“CSR”) has a carrying value of $2.4 million at ~~September~~March 3031, ~~2025~~2026 and $2.23 million at December 31, ~~2024~~2025, respectively, and is included in other assets and carried at fair value on the Company's Consolidated Balance Sheets. Total commercial loans serviced for others were $~~302~~298.64 million and $~~279~~296.72 million at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, respectively. Key assumptions used in measuring the fair value of the CSR as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 include a constant prepayment rate of 11.3871% and a discount rate of 12.00%.

31 6. Leases

The Company's lease commitments consist primarily of agreements to lease land and office facilities that it occupies to operate several of its retail branch locations that are classified as operating leases and are recognized on the balance sheet as right-of-use (“ROU”) assets and lease liabilities. As of March 31, 2026, the Company has operating lease ROU assets of $11.7 million and operating lease liabilities of $11.9 ~~Leases~~million. As of December 31, 2025, the Company had operating lease ROU assets of $5.9 million and operating lease liabilities of $5.9 million. The Company did not have any agreements that are classified as finance leases as of March 31, 2026 or December 31, 2025.

The Company's ~~lease~~entered ~~commitments~~into ~~consist~~a ~~primarily~~new ofseven ~~agreements~~year to lease ~~land~~for ~~and~~the ~~office~~headquarters ~~facilities~~building ~~that~~for itResidential ~~occupies~~Mortgage toin ~~operate several of its retail branch locations that are classified as operating leases and are recognized on~~ the ~~balance~~first ~~sheet~~quarter ~~as right-~~of~~-use~~ ~~(“ROU”) assets and lease liabilities~~2026. As ofUpon ~~September 30~~commencement, ~~2025,~~ the ~~Company has~~ operating lease ROU assets ofincreased $6.53 million and the operating lease liabilities ofincreased $6.~~6 million. As of December~~4 ~~31, 2024, the Company had operating lease ROU assets of $7.5~~ million ~~and operating lease liabilities of $7~~.~~5 million. The Company did not have any agreements that are classified as finance leases as of September 30, 2025 or December 31, 2024.~~

The following table presents additional information about the Company's operating leases for the periods indicated:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In Thousands)

~~2025~~

~~2024~~

~~2025~~2026

~~2024~~2025

Lease Cost

Operating lease cost(1)

~~$795~~

~~$743~~

$~~2,264~~721

$~~2,225~~708

Short term lease cost(1)

~~206~~70

7486

Total lease cost

~~$837~~

~~$766~~

$~~2,470~~791

$~~2,299~~794

Other information

Operating leases - operating cash flows

$~~2,052~~574

$~~2,076~~687

Weighted average lease term - operating leases, in years

1210.4016

11.0735

Weighted average discount rate - operating leases

3.8389

3.6375

(1)

Expenses are classified within occupancy expense on the Consolidated Statements of Income.

The table below reconciles the remaining undiscounted cash flows for the next five years for each twelve-month period presented (unless otherwise indicated) and the total of the subsequent remaining years to the operating lease liabilities recorded on the balance sheet:

(In Thousands)			Operating Leases
2025 (Three months)			$675
2026 (Nine months)			$1,605
2026			1,545
2027			2,087
2027			1,059
2028			1,849
2028			731
2029			1,705
2029			553
2030			1,378
Thereafter			35,~~755~~834
Total minimum lease payments			$814,~~318~~458
Less: amount of lease payment representing interest			(12,~~759~~601)
Present value of future minimum lease payments			$611,~~559~~857

3228

87. Derivatives

Derivatives swaps related to community banking activities : Interest rate swaps

The Company enters into commercial loan interest rate swap agreements with commercial banking customers which are offset with a corresponding swap agreement with a third party financial institution (“counterparty”). The Company has agreements with its counterparties that contain provisions that provide that if the Company fails to maintain its status as a “well-capitalized” institution under applicable regulatory guidelines, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. These agreements also require that the Company and the counterparty collateralize any fair value shortfalls that exceed $250,000 with eligible collateral, which includes cash and securities backed with the full faith and credit of the federal government. Similarly, the Company could be required to settle its obligations under the agreement if specific regulatory events occur, such as if the Company were issued a prompt corrective action directive or a cease and desist order, or if certain regulatory ratios fall below specified levels. The Company pledged $~~592~~598,000 as of ~~September~~March 3031, ~~2025~~2026 and $~~579~~596,000 as of December 31, ~~2024~~2025, in available for sale securities to collateralize fair value shortfalls on interest rate swap agreements.

~~The~~At ~~Company had interest rate swaps related to commercial loans with an aggregate notional amount of $319.8 million and $309.0 million at September~~March ~~30, 2025 and December~~ 31, ~~2024~~2026, ~~respectively. At September 30, 2025,~~ the notional amount of interest rate swaps is made up of 2627 variable to fixed rate swaps to commercial loan customers totaling $~~159~~178.90 million, with a fair value of negative $8.1 million and 2627 fixed to variable rate swaps with a counterparty totaling $~~159~~178.90 million with a fair value of $8.1 million. Changes in fair value from these 2627 interest rate swaps offset each other in the three-month periods ending ~~September~~March 3031, ~~2025~~2026. The Company recognized zero and $~~287~~129,000 in fee income related to interest rate swaps in the three-month periods ending ~~September~~March 3031, ~~2025~~2026 and ~~2024, respectively, and $129,000 and $361,000 in fee income related to interest rate swaps in the nine-month periods ending September 30,~~ 2025 ~~and 2024~~, respectively. Interest rate swap income is recorded in other operating income on the Consolidated Statements of Income. None of these interest rate swaps are designated as hedging instruments.

The Company has an interest rate swap to hedge the variability in cash flows arising out of a portion of its junior subordinated debentures, which is floating rate debt, by swapping the cash flows with an interest rate swap which receives floating and pays fixed. The Company has designated this interest rate swap as a hedging instrument. The interest rate swap effectively fixes the Company's interest payments on the $10.0 million of junior subordinated debentures held under Northrim Statutory Trust 2 at 3.72% through its maturity date. The floating rate that the dealer pays is equal to the three month CME SOFR plus tenor spread adjustment 0.26% plus 1.37%, which reprices quarterly on the payment date. This rate was 5.6731% as of ~~September~~March 3031, ~~2025~~2026. The Company pledged $130,000 in cash to collateralize initial margin and fair value exposure of our counterparty on this interest rate swap as of ~~September~~March 3031, 2026 and December 31, 2025. The fair value of this interest rate swap was $1.4 million as of both March 31, 2026 and December 31, ~~2024~~2025, which is included in other assets on the Consolidated Balance Sheet. Changes in the fair value of this interest rate swap are reported in other comprehensive income on the Consolidated Statements of Income. The unrealized gain, net of tax on this interest rate swap was $1.0 million as of ~~September~~March 3031, ~~2025~~2026 and ~~the unrealized gain, net of tax was $1.3 million as of~~ December 31, ~~2024~~2025.

Derivatives related to home mortgage banking activities: Interest rate lock commitments and retail interest rate contracts

The Company also uses derivatives to hedge the risk of changes in the fair values of interest rate lock commitments. The Company enters into commitments to originate residential mortgage loans at specific rates; the value of these commitments are detailed in the table below as “interest rate lock commitments”. The Company also hedges the interest rate risk associated with its residential mortgage loan commitments, which are referred to as "“retail interest rate contracts"” in the table below. Market risk with respect to commitments to originate loans arises from changes in the value of contractual positions due to changes in interest rates. Residential Mortgage, LLC (“RML”) had commitments to originate mortgage loans held for sale totaling $7485.08 million and $3245.37 million at ~~September~~March 3031, 2026 and December 31, 2025, respectively. The fair value of these interest rate lock commitments was $1.6 million and $923,000 at March 31, 2026 and December 31, ~~2024~~2025, respectively. Changes in the value of RML's interest rate derivatives are recorded in mortgage banking income on the Consolidated Statements of Income. None of these derivatives are designated as hedging instruments.

3329

The following table presents the fair value of derivatives not designated as hedging instruments at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025:

(In Thousands)	Asset Derivatives
		September 30, 2025	December 31, 2024
		March 31, 2026	December 31, 2025
	Balance Sheet Location	Fair Value	Fair Value
Interest rate swaps	Other assets	$8,~~194~~057	$137,~~011~~999
Interest rate lock commitments	Other assets	1,~~531~~580	~~465~~923
Retail interest rate contracts	Other assets	—58	49—
Total		$9,~~725~~695	$138,~~525~~922

(In Thousands)	Liability Derivatives
		September 30, 2025	December 31, 2024
		March 31, 2026	December 31, 2025
	Balance Sheet Location	Fair Value	Fair Value
Interest rate swaps	Other liabilities	$8,~~194~~057	$137,~~011~~999
Retail interest rate contracts	Other liabilities	44—	—50
Total		$8,~~238~~057	$138,~~011~~049

The following table presents the net gains (losses) of derivatives not designated as hedging instruments for periods indicated below:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In Thousands)

Income Statement Location

~~2025~~

~~2024~~

~~2025~~2026

~~2024~~2025

Retail interest rate contracts

Mortgage banking income

~~($218)~~

~~($662)~~

($~~553)~~70

($~~443~~309)

Interest rate lock commitments

Mortgage banking income

~~226~~

~~275~~

~~1,013~~613

~~920~~880

Total

~~($387)~~

$~~460~~683

$~~477~~571

Our derivative transactions with counterparties under International Swaps and Derivative Association master agreements include “right of set-off” provisions. “Right of set-off” provisions are legally enforceable rights to offset recognized amounts and there may be an intention to settle such amounts on a net basis. We do not offset such financial instruments for financial reporting purposes.

3430

The following table summarizes the derivatives that have a right of offset as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025:

September 30, 2025				Gross amounts not offset in the Statement of Financial Position
March 31, 2026				Gross amounts not offset in the Statement of Financial Position
(In Thousands)	Gross amounts of recognized assets and liabilities	Gross amounts offset in the Statement of Financial Position	Net amounts of assets and liabilities presented in the Statement of Financial Position	Financial Instruments	Collateral Posted	Net Amount
Asset Derivatives
Interest rate swaps	$8,~~194~~057	$—	$8,~~194~~057	$—	$—	$8,~~194~~057
Retail interest rate contracts	58	—	58	—	—	58
Liability Derivatives
Interest rate swaps	$8,~~194~~057	$—	$8,~~194~~057	$—	$8,~~194~~057	$—
Retail interest rate contracts	44	—	44	—	—	44
December 31, 2025				Gross amounts not offset in the Statement of Financial Position
December 31, 2024				Gross amounts not offset in the Statement of Financial Position
(In Thousands)	Gross amounts of recognized assets and liabilities	Gross amounts offset in the Statement of Financial Position	Net amounts of assets and liabilities presented in the Statement of Financial Position	Financial Instruments	Collateral Posted	Net Amount
Asset Derivatives
Interest rate swaps	$137,~~011~~999	$—	$137,~~011~~999	$—	$—	$137,~~011~~999
Retail interest rate contracts	49	—	49	—	—	49
Liability Derivatives
Interest rate swaps	$137,~~011~~999	$—	$137,~~011~~999	$—	$137,~~011~~999	$—
Retail interest rate contracts	50	—	50	—	—	50

8 . Subordinated Debt

Junior Subordinated Debentures

In December of 2005, the Company formed a wholly-owned Connecticut statutory business trust subsidiary, Northrim Statutory Trust 2 (the “Trust 2”), which issued $10 million of guaranteed undivided beneficial interests in the Company’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities 2”). These debentures qualify as Tier 1 capital under Federal Reserve Board guidelines. All of the common securities of Trust 2 are owned by the Company. The proceeds from the issuance of the common securities and the Trust Preferred Securities 2 were used by Trust 2 to purchase $10.3 million of junior subordinated debentures of the Company. Trust 2 is not consolidated in the Company’s financial statements in accordance with GAAP; therefore, the Company has recorded its investment in Trust 2 as an other asset and the subordinated debentures as a liability. The debentures, which represent the sole asset of Trust 2, accrue and pay distributions quarterly at a variable rate of 90-day CME SOFR plus tenor spread adjustment 0.26% plus 1.37% per annum, adjusted quarterly, of the stated liquidation value of $1,000 per capital security as of December 31, 2024. The interest rate on these debentures was 5.31% at March 31, 2026 compared to 5.35% at December 31, 2025. The interest cost to the Company on these debentures was $138,000 and $154,000 in the first quarters of 2026, and 2025, respectively. The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of: (i) accrued and unpaid distributions required to be paid on the Trust Preferred Securities 2; (ii) the redemption price with respect to any Trust Preferred Securities 2 called for redemption by Trust 2; and (iii) payments due upon a voluntary or involuntary dissolution, winding up or liquidation of Trust 2. The Trust Preferred Securities 2 are mandatorily redeemable upon maturity of the debentures on March 15, 2036, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the debentures purchased by Trust 2 in whole or in part, on or after March 15, 2011. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest.

Subordinated Debentures

In November of 2025, the Company issued and sold $60.0 million in aggregate principal amount of its 6.875% Fixed-to-Floating Rate Subordinated Notes due 2035 (the “Subordinated Notes”). The Subordinated Notes were issued by the Company to the Purchasers at a price equal to 100% of their face amount. The Subordinated Notes mature on December 1, 2035 and bear interest at a fixed rate of 6.875% per year, from November 26, 2025 to, but excluding, December 1, 2030 or the date of earlier redemption, payable semi-annually in arrears. From and including December 1, 2030 to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month SOFR, plus 3.48% per annum, payable quarterly in arrears. As provided in the Subordinated Notes, the interest rate on the Subordinated Notes during the applicable floating rate period may be determined based on a rate other than three-month term SOFR. The interest cost to the Company on these debentures was $1.0 million in the first quarter of 2026. The Company incurred debt issuance costs of $1.4 million which will amortize through December 1, 2035. The amortization expense amounted to $35,000 in the first quarter of 2026. Prior to December 1, 2030, the Company may redeem the Subordinated Notes, in whole but not in part, only under certain limited circumstances set forth in the indenture governing the Subordinated Notes. On or after December 1, 2030, the Company may redeem the Subordinated Notes, in whole or in part, at its option, on any interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed, together with any accrued and unpaid interest on the Subordinated Notes being redeemed to, but excluding, the date of redemption. The Subordinated Notes are not subject to redemption at the option of the holder. Principal and interest on the Subordinated Notes are subject to acceleration only in limited circumstances in the case of certain bankruptcy and insolvency-related events with respect to the Company. The Subordinated Notes are unsecured, subordinated obligations of the Company, are not obligations of, and are not guaranteed by, any subsidiary of the Company, and rank junior in right of payment to the Company’s current and future senior indebtedness. The Subordinated Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes.

9. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Investment securities available for sale and marketable equity securities: Fair values are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Servicing rights: MSR and CSR are measured at fair value on a recurring basis. These assets are classified as Level 3 as quoted prices are not available. In order to determine the fair value of MSR and CSR, the present value of net expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, escrow calculations, delinquency rates, and ancillary fee income net of servicing costs. 32

~~Derivative~~Servicing ~~instruments~~rights: ~~The~~MSR ~~fair~~and ~~value~~CSR ~~of the interest rate lock commitments~~ are ~~estimated~~measured ~~using~~at ~~quoted~~fair orvalue ~~published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based~~ on ~~historical~~a ~~information,~~recurring ~~where appropriate~~basis. ~~The~~These ~~pull-through~~assets ~~rate assumptions~~ are ~~considered~~classified as Level 3 ~~valuation~~as ~~inputs~~quoted ~~and~~prices are ~~significant~~not toavailable. ~~the~~In ~~interest~~order ~~rate~~to ~~lock~~determine ~~commitment valuation; as such,~~ the ~~interest~~fair ~~rate~~value ~~lock~~of ~~commitment~~MSR ~~derivatives~~and ~~are classified as Level 3. Interest rate contracts are valued in a model~~CSR, ~~which~~the ~~uses~~present asvalue ~~its~~of ~~basis~~net aexpected ~~discounted~~future cash ~~flow~~flows ~~technique~~is ~~incorporating credit valuation adjustments to reflect nonperformance risk in the measurement of fair value~~estimated. ~~Although~~Assumptions ~~the~~used ~~Company~~include ~~has~~market ~~determined~~discount ~~that the~~ rates,

35Interest rate swaps: The fair value of the interest rate swap agreements is determined using standard valuation models that calculate the present value of expected future cash flows. These valuation models incorporate observable market inputs, including contractual terms, interest rate yield curves, forward interest rates, and credit risk adjustments. The Company classifies its interest rate swaps within Level 2 of the fair value hierarchy.

~~majority~~Interest ~~of inputs used to value its interest~~ rate ~~derivatives~~lock ~~fall~~commitments: ~~within~~The ~~Level~~fair 2value of the ~~fair~~interest ~~value~~rate ~~hierarchy,~~lock ~~the~~commitments ~~credit~~are ~~valuation~~estimated ~~adjustments~~using ~~associated~~quoted ~~with~~or ~~its~~published ~~derivatives~~market ~~utilize~~prices ~~Level~~for 3similar ~~inputs~~instruments, ~~such~~adjusted asfor ~~estimates~~factors ofsuch ~~current~~as ~~credit~~pull-through ~~spreads~~rate toassumptions ~~evaluate~~based ~~the~~on ~~likelihood~~historical ofinformation, ~~default~~where ~~by itself and its counterparties~~appropriate. ~~However,~~The aspull-through ofrate ~~September 30,~~assumptions ~~2025,~~are ~~the~~considered ~~Company~~Level ~~has~~3 ~~assessed the significance of the impact of these adjustments on the overall~~ valuation ofinputs ~~its interest rate positions~~ and ~~has determined that they~~ are ~~not~~ significant to the ~~overall valuation of its~~ interest rate ~~derivatives.~~lock Ascommitment avaluation; ~~result~~as such, the ~~Company has classified its~~ interest rate ~~derivative~~lock ~~valuations~~commitment inderivatives ~~Level~~are 2classified ofas ~~the~~Level ~~fair value hierarchy~~3.

Retail interest rate contracts: Retail interest rate contracts are valued in a model, which uses as its basis a discounted cash flow technique incorporating credit valuation adjustments to reflect nonperformance risk in the measurement of fair value. Although the Company has determined that the majority of inputs used to value its retail interest rate contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2026, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its retail interest rate contracts and has determined that they are not significant to the overall valuation. As a result, the Company has classified its retail interest rate contract valuations in Level 2 of the fair value hierarchy.

Commitments to extend credit and standby letters of credit: The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligation with the counterparties at the reporting date.

Assets Subject to Nonrecurring Adjustment to Fair Value

The Company is also required to measure certain assets such as equity method investments, goodwill, intangible assets, impaired loans, and Other Real Estate Owned (“OREO”) at fair value on a nonrecurring basis in accordance with GAAP. Any nonrecurring adjustments to fair value usually result from the write-down of individual assets.

The Company uses either in-house evaluations or external appraisals to estimate the fair value of OREO and impaired loans as of each reporting date. In-house appraisals are considered Level 3 inputs and external appraisals are considered Level 2 inputs. The Company’s determination of which method to use is based upon several factors. The Company takes into account compliance with legal and regulatory guidelines, the amount of the loan, the size of the assets, the location and type of property to be valued and how critical the timing of completion of the analysis is to the assessment of value. Those factors are balanced with the level of internal expertise, internal experience and market information available, versus external expertise available such as qualified appraisers, brokers, auctioneers and equipment specialists.

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

3633

Estimated fair values as of the periods indicated, whether or not recognized or recorded at fair value on a recurring basis in the Consolidated Balance Sheets, are as follows:

September 30, 2025

December 31, 2024

March 31, 2026

December 31, 2025

(In Thousands)

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Financial assets:

Level 1 inputs:

Cash, due from banks and deposits in other banks

$~~212~~154,~~692~~937

$62145,~~736~~906

Investment securities available for sale

~~204~~219,~~575~~622

~~268~~201,~~781~~412

Marketable equity securities

810,~~332~~145

8,~~719~~392

Level 2 inputs:

Investment securities available for sale

~~214~~198,~~603~~825

~~209~~214,~~836~~451

Loans held for sale

~~111~~81,~~317~~179

59100,~~957~~323

Interest rate swaps

118,~~101~~057

147,~~788~~999

Interest rate swap - junior subordinated debt

1,442

1,437

Retail interest rate contracts

—

Level 3 inputs:

Investment securities held to maturity

3631,750

3630,~~483~~684

3626,750

3526,750

Loans

2,~~218~~358,~~970~~702

2,~~145~~281,~~885~~431

2,~~129~~295,~~263~~499

2,~~014~~225,~~070~~114

Purchased receivables, net

~~108~~105,~~053~~029

74101,~~078~~642

Interest rate lock commitments

1,~~531~~580

~~465~~923

~~465~~912

Mortgage servicing rights

2728,~~796~~426

2627,~~439~~474

Commercial servicing rights

2,~~374~~359

2,~~194~~342

Financial liabilities:

Level 2 inputs:

Deposits

$2,906,463

$2,908,470

$2,680,189

$2,683,029

Time deposits

$391,050

$392,932

$402,759

$405,317

Borrowings

12,~~916~~693

10,~~311~~153

2312,~~045~~805

1910,~~991~~361

Interest rate swaps

8,~~194~~057

137,~~011~~999

Retail interest rate contracts

—

Level 3 inputs:

Junior subordinated debentures

10,310

1110,~~028~~720

10,310

10,~~897~~950

Subordinated debentures

58,649

57,801

58,614

3734

The following table sets forth the balances as of the periods indicated of assets and liabilities measured at fair value on a recurring basis:

(In Thousands)	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
September 30, 2025
March 31, 2026
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities	$~~386~~382,~~506~~020	$~~204~~219,~~575~~622	$~~181~~162,~~931~~398	$—
U.S. Agency mortgage-backed securities	4,~~887~~708	—	4,~~887~~708	—
Corporate bonds	4,~~916~~978	—	4,~~916~~978	—
Collateralized loan obligations	2226,~~869~~741	—	2226,~~869~~741	—
Total available for sale securities	$~~419~~418,~~178~~447	$~~204~~219,~~575~~622	$~~214~~198,~~603~~825	$—
Marketable equity securities	$810,~~332~~145	$810,~~332~~145	$—	$—
Total marketable equity securities	$810,~~332~~145	$810,~~332~~145	$—	$—
Interest rate swaps	$9,568	$—	$9,568	$—
Loans held for sale	$81,179	$—	$81,179	$—
Interest rate lock commitments	1,531	—	—	1,531
Interest rate swaps	9,499	—	9,499	—
Mortgage servicing rights	27,796	—	—	27,796
Interest rate lock commitments	1,580	—	—	1,580
Commercial servicing rights	2,374	—	—	2,374
Mortgage servicing rights	28,426	—	—	28,426
Total other assets	$41,269	$—	$9,568	$31,701
Commercial servicing rights	2,359	—	—	2,359
Retail interest rate contracts	58	—	58	—
Total other assets	$123,101	$—	$90,736	$32,365
Liabilities:
Interest rate swaps	$8,~~194~~057	$—	$8,~~194~~057	$—
Retail interest rate contracts	44	—	44	—
Total other liabilities	$8,057	$—	$8,057	$—
Total other liabilities	$8,238	$—	$8,238	$—
December 31, 2025
December 31, 2024
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities	$~~432~~388,~~931~~737	$~~259~~201,~~986~~412	$~~172~~187,~~945~~325	$—
Municipal securities	—	—	—	—
U.S. Agency mortgage-backed securities	4,798	—	4,798	—
Corporate bonds	84,~~795~~952	84,~~795~~952	—	—
Collateralized loan obligations	3622,~~891~~174	—	3622,~~891~~174	—
Total available for sale securities	$~~478~~420,~~617~~661	$~~268~~206,~~781~~364	$~~209~~214,~~836~~297	$—
Marketable equity securities	$8,~~719~~392	$8,~~719~~392	$—	$—
Total marketable securities	$8,~~719~~392	$8,~~719~~392	$—	$—
Interest rate swaps	$14,788	$—	$14,788	$—
Loans held for sale	$100,323	$—	$100,323	$—
Interest rate lock commitments	465	—	—	465
Interest rate swaps	9,436	—	9,436	—
Mortgage servicing rights	26,439	—	—	26,439
Interest rate lock commitments	923	—	—	923
Commercial servicing rights	2,194	—	—	2,194
Mortgage servicing rights	27,474	—	—	27,474
Retail interest rate contracts	49	—	49	—
Commercial servicing rights	2,342	—	—	2,342
Total other assets	$43140,~~935~~498	$—	$14109,~~837~~759	$2930,~~098~~739
Liabilities:
Interest rate swaps	$137,~~011~~999	$—	$137,~~011~~999	$—
Total other liabilities	$13,011	$—	$13,011	$—
Retail interest rate contracts	50	—	50	—
Total other liabilities	$8,049	$—	$8,049	$—

3835

The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three ~~and nine~~-month periods ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025:

(In Thousands)

Beginning balance

Change included in earnings

Purchases and issuances

Sales and settlements

Ending balance

Net change in unrealized gains (losses) relating to items held at end of period

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Interest rate lock commitments

$~~1,296~~923

($~~592~~529)

$4,~~880~~255

($43,~~053~~069)

$1,~~531~~580

Mortgage servicing rights

27,~~506~~474

(~~1,250~~127)

1,~~540~~079

—

2728,~~796~~426

—

Commercial servicing rights

2,~~400~~342

(642)

3819

—

2,~~374~~359

—

Total

$3130,~~202~~739

($~~1,906~~658)

$65,~~458~~353

($43,~~053~~069)

$3132,~~701~~365

$1,~~531~~580

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

Interest rate lock commitments

$~~1,059~~465

($~~647~~226)

$51,~~173~~996

($~~4,258~~846)

$1,~~327~~389

Mortgage servicing rights

2126,~~077~~439

(~~968~~855)

1,~~461~~230

—

2126,~~570~~814

—

Commercial servicing rights

2,~~116~~194

(1073)

30196

—

2,~~136~~317

—

Total

$2429,~~252~~098

($1,~~625~~154)

$63,~~664~~422

($~~4,258~~846)

$2530,~~033~~520

$1,~~327~~389

(In Thousands)	Beginning balance	Change included in earnings	Purchases and issuances	Sales and settlements	Ending balance	Net change in unrealized gains (losses) relating to items held at end of period
Nine Months Ended September 30, 2025
Interest rate lock commitments	$465	($1,371)	$11,576	($9,139)	$1,531	$1,531
Mortgage servicing rights	26,439	(2,923)	4,280	—	27,796	—
Commercial servicing rights	2,194	(257)	437	—	2,374	—
Total	$29,098	($4,551)	$16,293	($9,139)	$31,701	$1,531
Nine Months Ended September 30, 2024
Interest rate lock commitments	$342	($1,375)	$11,102	($8,742)	$1,327	$1,327
Mortgage servicing rights	19,564	(1,074)	3,080	—	21,570	—
Commercial servicing rights	2,200	(155)	91	—	2,136	—
Total	$22,106	($2,604)	$14,273	($8,742)	$25,033	$1,327

There were no changes in unrealized gains and losses for the three-month periods ending March 31, 2026 and 2025 included in other comprehensive income for recurring Level 3 fair value measurements and there were no transfers between levels during the three-month periods ending March 31, 2026 and 2025.

~~There~~As ~~were~~of noand ~~changes~~for inthe ~~unrealized~~periods ~~gains~~ending March 31, 2026 and ~~losses~~December 31, 2025, except for certain assets as shown in the ~~three~~following ~~and~~table, ~~nine-month~~no ~~periods~~impairment ~~ending~~or ~~September 30~~valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis. For loans individually measured for credit losses, ~~2025~~the ~~and~~Company ~~2024~~classifies ~~included~~fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in ~~other~~the ~~comprehensive~~fair ~~income~~value ~~for~~hierarchy, ~~recurring~~and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value ~~measurements~~hierarchy.

As of and for the periods ending September 30, 2025 and December 31, 2024, except for certain assets as shown in the following table, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis. For loans individually measured for credit losses, the Company classifies fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in the fair value hierarchy, and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value hierarchy.


(In Thousands)	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
March 31, 2026
Loans individually measured for credit losses	$4,226	$—	$—	$4,226


Total	$4,226	$—	$—	$4,226
December 31, 2025
Loans individually measured for credit losses	$2,729	$—	$—	$2,729


Total	$2,729	$—	$—	$2,729

3936

(In Thousands)	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
September 30, 2025
Loans individually measured for credit losses	$194	$—	$—	$194
Total	$194	$—	$—	$194
December 31, 2024
Loans individually measured for credit losses	$—	$—	$—	$—
Total	$—	$—	$—	$—

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three-month periods ended March 31, 2026 and 2025:

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three and nine-month periods ended September 30, 2025 and 2024:


	Three Months Ended March 31,		Three Months Ended March 31,
(In Thousands)	2026	2025	2026	2025
Loans individually measured for credit losses	$783	$—	$783	$—


Total loss from nonrecurring measurements	$783	$—	$783	$—

	Three Months Ended September 30,		Nine Months Ended September 30,
(In Thousands)	2025	2024	2025	2024
Loans individually measured for credit losses	$1	$114	$1	$117
Other real estate owned	—	—	—	—
Total loss from nonrecurring measurements	$1	$114	$1	$117

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and nonrecurring basis at ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025:

Financial Instrument	Valuation Technique - Recurring Basis	Unobservable Input	Weighted Average Rate Range
September 30, 2025
March 31, 2026
Loans individually measured for credit losses	Discounted cash flow	Discount rate	0.43	%
Interest rate lock commitment	External pricing model	Pull through rate	92.1	%
Interest rate lock commitment	External pricing model	Pull through rate	92.05	%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	7.45% - 24.97%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	6.13% - 20.97%
		Discount rate	9.50% - 10.02%
		Discount rate	9.50% - 11.00%
Commercial servicing rights	Discounted cash flow	Constant prepayment rate	3.84% - 17.55%
Commercial servicing rights	Discounted cash flow	Constant prepayment rate	3.13% - 18.23%
		Discount rate	12.00	%
December 31, 2024
December 31, 2025
Interest rate lock commitment	External pricing model	Pull through rate	9391.3553	%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	25.0188% - 1420.9196%
		Discount rate	9.50% - 11.00%
Commercial servicing rights	Discounted cash flow	Constant prepayment rate	3.1384% - 1817.2355%
		Discount rate	12.00	%


Financial Instrument	Valuation Technique - Nonrecurring Basis	Unobservable Input	Weighted Average Rate Range
March 31, 2026
Loans individually measured for credit losses	Discounted cash flow	Discount rate	10.00% - 100.00%
December 31, 2025
Loans individually measured for credit losses	Discounted cash flow	Discount rate	10.00	%

10. Segment Information

The Company's operations are managed along three operating segments: Community Banking, Home Mortgage Lending, and Specialty Finance. The Company reevaluated our reportable operating segments in the fourth quarter of 2024 concurrent with the acquisition of Sallyport Commercial Finance, LLC (“SCF”), which resulted in the addition of the Specialty Finance segment. The Community Banking segment's principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. As of ~~September~~March 3031, ~~2025~~2026, the Community Banking segment operated 20 branches throughout Alaska. The Home Mortgage Lending segment's principal business focus is the origination and sale of mortgage loans for 1-4 family residential properties, mortgage loan servicing for a portion of mortgage loans sold, and investment in certain 1-4 family residential mortgage loans on our balance sheet. The Specialty Finance segment's principal business focus is factoring, asset based lending and alternative working capital solutions to small and medium sized enterprises, and includes SCF and Northrim Funding Services, which was previously reported in the Community Banking segment prior to the acquisition of SCF.

The Company's reportable segments are determined by our Chief Financial Officer and the Chief Executive Officer, whom collectively are the designated chief operating decision maker. The reportable segments are determined based on information provided about the Company's products and services offered. They are also distinguished by the level of information provided to the chief operating decision maker, who uses the information to review performance of various components of the business, which are then aggregated if operating performance, products and services, and customers are similar. The chief operating decision maker evaluates the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the performance of the Company's segments and in the determination of allocating resources. Segment pretax net income or loss is used to assess the performance of the community banking segment by monitoring the margin between interest income and interest expense and the efficiency ratio specific to the segment. Segment pretax net income or loss is used to assess the performance of the home mortgage lending segment by monitoring the premium received on loan sales, the margin between interest income and interest expense, and the profitability of home mortgage servicing activities. Segment pretax net income or loss is used to assess the performance of the specialty finance segment by monitoring pretax income and the yield of purchased receivable fees.

Accounting policies for segments are the same as those described in Note 1 to the Consolidated Financial Statements. Interest expense is allocated to each segment based on average cash utilized to fund the operations of the segment and the average cost of interest-bearing liabilities for the consolidated entity. Indirect salary expense for activities such as general management, accounting and finance, human resources, compliance, information technology, risk management, and internal audit are allocated based on the average percentage of employee time spent working in each specific segment.

4138

Summarized financial information for the Company's reportable segments and the reconciliation to the consolidated financial results for the periods presented is shown in the following tables:

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

(In Thousands)

Community Banking

Home Mortgage Lending

Specialty Finance

Consolidated

Interest income

$40,~~743~~037

$4,~~315~~190

$~~920~~669

$4544,~~978~~896

Interest expense

8,~~434~~197

1,~~503~~394

~~695~~644

10,~~632~~235

Net interest income

3231,~~309~~840

2,~~812~~796

~~225~~25

3534,~~346~~661

Provision (benefit) for credit losses

~~1,561~~153

~~158~~562

~~(3)~~245

~~1,716~~960

Net interest income after provision for credit losses

3031,~~748~~687

2,~~654~~234

~~228~~(220)

33,~~630~~701

Net realized gains on mortgage loans sold

—

42,~~810~~997

—

42,~~810~~997

Change in fair value of mortgage loan commitments, net

—

~~371~~720

—

~~371~~720

Total production revenue

—

53,~~181~~717

—

53,~~181~~717

Mortgage servicing revenue

—

32,~~056~~667

—

32,~~056~~667

Change in fair value of mortgage servicing rights:

Due to changes in model inputs of assumptions

—

~~(638)~~463

—

~~(638)~~463

Other

—

(~~612~~590)

—

(~~612~~590)

Total mortgage servicing revenue, net

—

12,~~806~~540

—

12,~~806~~540

Other mortgage banking revenue

—

~~286~~204

—

~~286~~204

Total mortgage banking revenue

—

76,~~273~~461

—

76,~~273~~461

Purchased receivable income

—

76,~~269~~132

Other operating income

172,~~107~~416

—

(~~410~~130)

162,~~697~~286

Total other operating income

172,~~107~~416

76,~~273~~461

6,~~859~~002

3114,~~239~~879

Salaries and other personnel expense

12,~~181~~392

5,~~505~~275

1,~~746~~839

19,~~432~~506

Data processing expense

2,~~826~~835

~~269~~300

~~145~~170

3,~~240~~305

Occupancy expense

1,~~359~~565

~~493~~468

6971

12,~~921~~104

Professional and outside services

~~713~~831

~~249~~253

~~150~~75

1,~~112~~159

Marketing expense

~~397~~756

~~110~~137

~~508~~901

Insurance expense

~~780~~385

2219

—

~~802~~404

Compensation expense - Sallyport acquisition payments

—

~~600~~500

Other operating expense

1,~~709~~626

~~717~~749

~~259~~368

2,~~685~~743

Total other operating expense

1920,~~965~~390

7,~~365~~201

23,~~970~~031

30,~~300~~622

Income before provision for income taxes

2713,~~890~~713

21,~~562~~494

42,~~117~~751

3417,~~569~~958

Provision for income taxes

53,~~634~~213

~~706~~408

~~1,164~~662

74,~~504~~283

Net income

$2210,~~256~~500

$1,~~856~~086

$2,~~953~~089

$2713,~~065~~675

4239

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

(In Thousands)

Community Banking

Home Mortgage Lending

Specialty Finance

Consolidated

Interest income

$40,~~743~~037

$4,~~315~~190

$~~920~~669

$4544,~~978~~896

Mortgage banking income - external revenue

—

76,~~273~~461

—

76,~~273~~461

Mortgage banking income - intersegment revenues

—

~~527~~954

—

~~527~~954

Purchased receivable income

—

76,~~269~~132

Other operating income

172,~~107~~416

—

(~~410~~130)

162,~~697~~286

57,850

12,115

7,779

77,744

42,453

11,605

6,671

60,729

Reconciliation of revenue

Elimination of intersegment revenues

—

(~~527~~954)

—

(~~527~~954)

Total consolidated revenues

$5742,~~850~~453

$1110,~~588~~651

$76,~~779~~671

$7759,~~217~~775

Less:

Interest expense

8,~~434~~197

1,~~503~~394

~~695~~644

10,~~632~~235

Provision (benefit) for credit losses

~~1,561~~153

~~158~~562

~~(3)~~245

~~1,716~~960

Segment gross profit

4734,~~855~~103

98,~~927~~695

75,~~087~~782

6448,~~869~~580

Less(1):

Salaries and other personnel expense

$12,~~181~~392

$5,~~505~~275

$1,~~746~~839

$19,~~432~~506

Data processing expense

2,~~826~~835

~~269~~300

~~145~~170

3,~~240~~305

Occupancy expense

1,~~359~~565

~~493~~468

6971

12,~~921~~104

Professional and outside services

~~713~~831

~~249~~253

~~150~~75

1,~~112~~159

Marketing expense

~~397~~756

~~110~~137

~~508~~901

Insurance expense

~~780~~385

2219

—

~~802~~404

Compensation expense - Sallyport acquisition payments

—

~~600~~500

Intersegment expense

~~527~~954

—

~~527~~954

Other segment items(2)

1,~~709~~626

~~717~~749

~~259~~368

2,~~685~~743

Segment expense

2021,~~492~~344

7,~~365~~201

23,~~970~~031

3031,~~827~~576

Reconciliation of expense

Elimination of intersegment expense

($~~527~~954)

$—

(~~527~~954)

Total consolidated expense

$1920,~~965~~390

$7,~~365~~201

$23,~~970~~031

$30,~~300~~622

Income before provision for income taxes

$2713,~~890~~713

$21,~~562~~494

$42,~~117~~751

$3417,~~569~~958

1The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. All expenses are allocated to a segment.

2Other segment items for each reportable segment include:

Community Banking: OREO (income) expense, net of rental income and gains on sale, director fees, operational charge offs net of recoveries, loan collection and collateral costs, and other miscellaneous operating costs related to community banking activities.

Home Mortgage Lending: OREO (income) expense, net of rental income and gains on sale related home mortgage loans, director fees related at RML, loan collection and collateral costs related to home mortgage loans, and other miscellaneous operating costs related to home mortgage lending activities.

Specialty Finance: miscellaneous operating costs related to specialty finance activities.

4340

	Three Months Ended September 30, 2024
	Three Months Ended March 31, 2025
(In Thousands)	Community Banking	Home Mortgage Lending	Specialty Finance	Consolidated
Interest income	$3436,~~862~~573	$4,~~396~~392	$~~158~~596	$3941,~~416~~561
Interest expense	8,~~934~~422	1,~~455~~346	~~185~~496	10,~~574~~264
Net interest income	2528,~~928~~151	23,~~941~~046	~~(27)~~100	2831,~~842~~297
Provision (benefit) for credit losses	(1,~~492~~768)	~~571~~(307)	—666	2(1,~~063~~409)
Net interest income after provision for credit losses	2429,~~436~~919	23,~~370~~353	(27566)	2632,~~779~~706
Net realized gains on mortgage loans sold	—	51,~~079~~580	—	51,~~079~~580
Change in fair value of mortgage loan commitments, net	—	60660	—	60660
Total production revenue	—	52,~~139~~240	—	52,~~139~~240
Mortgage servicing revenue	—	2,~~583~~696	—	2,~~583~~696
Change in fair value of mortgage servicing rights:
Due to changes in model inputs of assumptions	—	(~~566~~322)	—	(~~566~~322)
Other	—	(~~402~~533)	—	(~~402~~533)
Total mortgage servicing revenue, net	—	1,~~615~~841	—	1,~~615~~841
Other mortgage banking revenue	—	~~293~~170	—	~~293~~170
Total mortgage banking revenue	—	74,~~047~~251	—	74,~~047~~251
Purchased receivable income	—	—	16,~~033~~150	16,~~033~~150
Other operating income	32,~~507~~703	—	—(64)	32,~~507~~639
Total other operating income	32,~~507~~703	74,~~047~~251	16,~~033~~086	1113,~~587~~040
Salaries and other personnel expense	1110,~~422~~764	54,~~858~~769	~~269~~1,690	17,~~549~~223
Data processing expense	2,~~342~~670	~~273~~263	3171	23,~~618~~104
Occupancy expense	1,~~380~~381	~~500~~438	3170	1,~~911~~889
Professional and outside services	~~657~~562	~~224~~256	22297	~~903~~1,115
Marketing expense	~~738~~519	~~122~~150	—3	~~860~~672
Insurance expense	~~573~~989	2322	—6	~~596~~1,017
Other operating expense	1,611	643	37	2,291
Compensation expense - Sallyport acquisition payments	—	—	600	600
Total other operating expense	18,723	7,643	362	26,728
Other operating expense	1,696	592	263	2,551
Income before provision for income taxes	9,220	1,774	644	11,638
Total other operating expense	18,581	6,490	3,100	28,171
Provision (benefit) for income taxes	2,133	497	183	2,813
Income before provision for income taxes	14,041	1,114	2,420	17,575
Net income	$7,087	$1,277	$461	$8,825
Provision (benefit) for income taxes	3,253	310	688	4,251
Net income	$10,788	$804	$1,732	$13,324

4441

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

(In Thousands)

Community Banking

Home Mortgage Lending

Specialty Finance

Consolidated

Interest income

$3436,~~862~~573

$4,~~396~~392

$~~158~~596

$3941,~~416~~561

Mortgage banking income - external revenue

—

74,~~047~~251

—

74,~~047~~251

Mortgage banking income - intersegment revenues

—

~~1,275~~441

—

~~1,275~~441

Purchased receivable income

—

16,~~033~~150

Other operating income

32,~~507~~703

—

—(64)

32,~~507~~639

38,369

12,718

1,191

52,278

39,276

9,084

6,682

55,042

Reconciliation of revenue

Elimination of intersegment revenues

—

(~~1,275~~441)

—

(~~1,275~~441)

Total consolidated revenues

$3839,~~369~~276

$118,~~443~~643

$16,~~191~~682

$5154,~~003~~601

Less:

Interest expense

8,~~934~~422

1,~~455~~346

~~185~~496

10,~~574~~264

Provision (benefit) for credit losses

(1,~~492~~768)

~~571~~(307)

—666

2(1,~~063~~409)

Segment gross profit

2732,~~943~~622

97,~~417~~604

15,~~006~~520

3845,~~366~~746

Less(1):

Salaries and other personnel expense

$1110,~~422~~764

$54,~~858~~769

$~~269~~1,690

$17,~~549~~223

Data processing expense

2,~~342~~670

~~273~~263

3171

23,~~618~~104

Occupancy expense

1,~~380~~381

~~500~~438

3170

1,~~911~~889

Professional and outside services

~~657~~562

~~224~~256

22297

~~903~~1,115

Marketing expense

~~738~~519

~~122~~150

—3

~~860~~672

Insurance expense

~~573~~989

2322

—6

~~596~~1,017

Intersegment expense

1,275

—

1,275

Compensation expense - Sallyport acquisition payments

—

600

Other segment items(2)

1,611

643

2,291

Intersegment expense

441

—

441

Segment expense

19,998

7,643

362

28,003

Other segment items(2)

1,696

592

263

2,551

Segment expense

19,022

6,490

3,100

28,612

Reconciliation of expense

Elimination of intersegment expense

($~~1,275~~441)

$—

(~~1,275~~441)

Total consolidated expense

$18,~~723~~581

$76,~~643~~490

$~~362~~3,100

$2628,~~728~~171

Income before provision for income taxes

$914,~~220~~041

$1,~~774~~114

$~~644~~2,420

$1117,~~638~~575

1The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. All expenses are allocated to a segment.

2Other segment items for each reportable segment include:

Community Banking: OREO (income) expense, net of rental

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