UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2025

or

☐ 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: 000-30421

HANMI FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	95-4788120
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

900 Wilshire Boulevard, Suite 1250
Los Angeles, California	90017
(Address of Principal Executive Offices)	(Zip Code)

(213) 382-2200

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	HAFC	Nasdaq Global Select Market

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

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

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

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging Growth Company	☐

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

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

As of July 30, 2025, there were 30,126,029 outstanding shares of the Registrant’s Common Stock.

Hanmi Financial Corporation and Subsidiaries Quarterly Report on Form 10-Q

Three Months Ended June 30, 2025

Table of Contents

	Part I – Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets at June 30, 2025 (unaudited) and December 31, 2024	3
	Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024 (unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	65
	Part II – Other Information
Item 1.	Legal Proceedings	66
Item 1A.	Risk Factors	66
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	67
Item 6.	Exhibits	68
Signatures		69

2

Part I — Financial Information

Item 1. Financial Statements

Hanmi Financial Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)

	June 30,			December 31,
	2025			2024
	(Unaudited)
Assets
Cash and due from banks	$	380,050		$	304,800
Securities available for sale, at fair value (amortized cost of $994,611 and $1,004,563 as of June 30, 2025 and December 31, 2024, respectively)		918,094			905,798
Loans held for sale, at the lower of cost or fair value		49,611			8,579
Loans receivable, net of allowance for credit losses of $66,756 and $70,147 as of June 30, 2025 and December 31, 2024, respectively		6,239,201			6,181,230
Accrued interest receivable		23,749			22,937
Premises and equipment, net		20,607			21,404
Customers' liability on acceptances		214			1,226
Servicing assets		6,420			6,457
Goodwill and other intangible assets, net		11,031			11,031
Federal Home Loan Bank ("FHLB") stock, at cost		16,385			16,385
Income tax assets		39,550			44,901
Bank-owned life insurance		56,985			57,168
Prepaid expenses and other assets		100,466			96,009
Total assets	$	7,862,363		$	7,677,925
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	2,105,369		$	2,096,634
Interest-bearing		4,623,753			4,339,142
Total deposits		6,729,122			6,435,776
Accrued interest payable		30,567			34,824
Bank's liability on acceptances		214			1,226
Borrowings		127,500			262,500
Subordinated debentures		130,960			130,638
Accrued expenses and other liabilities		81,166			80,787
Total liabilities		7,099,529			6,945,751
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 10,000,000 shares; no shares issued as of June 30, 2025 and December 31, 2024		—			—
Common stock, $0.001 par value; authorized 62,500,000 shares; issued 34,294,037 shares (30,176,568 shares outstanding) and 34,151,464 shares (30,195,999 shares outstanding) as of June 30, 2025 and December 31, 2024, respectively		34			34
Additional paid-in capital		592,825			591,069
Accumulated other comprehensive loss, net of tax benefit of $22,092 and $28,576 as of June 30, 2025 and December 31, 2024, respectively		(54,511	)		(70,723	)
Retained earnings		367,251			350,869
Less treasury stock; 4,117,469 shares and 3,955,465 shares as of June 30, 2025 and December 31, 2024, respectively		(142,765	)		(139,075	)
Total stockholders’ equity		762,834			732,174
Total liabilities and stockholders’ equity	$	7,862,363		$	7,677,925

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

3

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(in thousands, except share and per share data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Interest and dividend income:
Interest and fees on loans receivable	$	92,589	$	90,752	$	183,476	$	182,427
Interest on securities		6,261		5,238		12,430		10,193
Dividends on FHLB stock		354		357		714		719
Interest on deposits in other banks		2,129		2,313		3,969		4,914
Total interest and dividend income		101,333		98,660		200,589		198,253
Interest expense:
Interest on deposits		41,924		46,495		82,483		92,133
Interest on borrowings		684		1,896		2,708		3,551
Interest on subordinated debentures		1,586		1,649		3,167		3,295
Total interest expense		44,194		50,040		88,358		98,979
Net interest income before credit loss expense		57,139		48,620		112,231		99,274
Credit loss expense		7,631		961		10,352		1,188
Net interest income after credit loss expense		49,508		47,659		101,879		98,086
Noninterest income:
Service charges on deposit accounts		2,169		2,429		4,387		4,878
Trade finance and other service charges and fees		1,461		1,277		2,858		2,691
Gain on sale of Small Business Administration ("SBA") loans		2,160		1,644		4,161		3,126
Gain on sale of residential mortgage loans		—		365		175		808
Other operating income		2,281		2,342		4,215		4,287
Total noninterest income		8,071		8,057		15,796		15,790
Noninterest expense:
Salaries and employee benefits		22,069		20,434		43,041		42,019
Occupancy and equipment		4,344		4,607		8,794		9,144
Data processing		3,727		3,686		7,514		7,237
Professional fees		1,725		1,749		3,194		3,642
Supplies and communications		515		570		1,031		1,172
Advertising and promotion		798		669		1,382		1,576
Other operating expenses		3,169		3,561		6,374		6,930
Total noninterest expense		36,347		35,276		71,330		71,720
Income before tax		21,232		20,440		46,345		42,156
Income tax expense		6,115		5,989		13,556		12,541
Net income	$	15,117	$	14,451	$	32,789	$	29,615
Basic earnings per share	$	0.50	$	0.48	$	1.09	$	0.98
Diluted earnings per share	$	0.50	$	0.48	$	1.08	$	0.97
Weighted-average shares outstanding:
Basic		29,948,836		30,055,913		29,943,279		30,089,341
Diluted		30,054,456		30,133,646		30,048,704		30,166,181

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

4

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Net income	$	15,117		$	14,451		$	32,789		$	29,615
Other comprehensive income (loss), net of tax:
Unrealized gain (loss):
Unrealized holding gain (loss) on available for sale securities		7,706			(1,277	)		22,248			(6,375	)
Unrealized loss on cash flow hedges		(235	)		(746	)		(45	)		(2,953	)
Unrealized gain (loss)		7,471			(2,023	)		22,203			(9,328	)
Income tax benefit (expense) related to other comprehensive income items		(2,155	)		588			(6,339	)		2,933
Other comprehensive income (loss)		5,316			(1,435	)		15,864			(6,395	)
Reclassification adjustment for losses included in net income		248			460			493			460
Income tax benefit related to reclassification adjustment		(73	)		(135	)		(145	)		(137	)
Reclassification adjustment for losses included in net income, net of tax		175			325			348			323
Other comprehensive income (loss), net of tax		5,491			(1,110	)		16,212			(6,072	)
Total comprehensive income	$	20,608		$	13,341		$	49,001		$	23,543

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

5

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Three Months Ended June 30, 2025 and 2024

(in thousands, except share data)

	Common Stock - Number of Shares								Stockholders' Equity
													Accumulated
											Additional		Other						Treasury			Total
	Shares		Treasury			Shares			Common		Paid-in		Comprehensive			Retained			Stock,			Stockholders'
	Issued		Shares			Outstanding			Stock		Capital		Loss			Earnings			at Cost			Equity
Balance at April 1, 2024		33,957,284		(3,680,926	)		30,276,358		$	34	$	587,687	$	(76,890	)	$	326,526		$	(134,257	)	$	703,100
Issuance of awards pursuant to equity incentive plans, net of forfeitures		167,626		—			167,626			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		960		—			—			—			960
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(1,874	)		(1,874	)		—		—		—			—			(28	)		(28	)
Repurchase of common stock		—		(170,000	)		(170,000	)		—		—		—			—			(2,729	)		(2,729	)
Cash dividends paid (common stock, $0.25/share)		—		—			—			—		—		—			(7,585	)		—			(7,585	)
Net income		—		—			—			—		—		—			14,451			—			14,451
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		(906	)		—			—			(906	)
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		(204	)		—			—			(204	)
Balance at June 30, 2024		34,124,910		(3,852,800	)		30,272,110		$	34	$	588,647	$	(78,000	)	$	333,392		$	(137,014	)	$	707,059
Balance at April 1, 2025		34,265,030		(4,031,516	)		30,233,514		$	34	$	591,942	$	(60,002	)	$	360,289		$	(140,778	)	$	751,485
Issuance of awards pursuant to equity incentive plans, net of forfeitures		29,007		—			29,007			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		883		—			—			—			883
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(15,953	)		(15,953	)		—		—		—			—			(359	)		(359	)
Repurchase of common stock		—		(70,000	)		(70,000	)		—		—		—			—			(1,628	)		(1,628	)
Cash dividends paid (common stock, $0.27/share)		—		—			—			—		—		—			(8,155	)		—			(8,155	)
Net income		—		—			—			—		—		—			15,117			—			15,117
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		5,482			—			—			5,482
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		9			—			—			9
Balance at June 30, 2025		34,294,037		(4,117,469	)		30,176,568		$	34	$	592,825	$	(54,511	)	$	367,251		$	(142,765	)	$	762,834

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

6

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Six Months Ended June 30, 2025 and 2024

(in thousands, except share data)

	Common Stock - Number of Shares								Stockholders' Equity
													Accumulated
											Additional		Other						Treasury			Total
	Shares		Treasury			Shares			Common		Paid-in		Comprehensive			Retained			Stock,			Stockholders'
	Issued		Shares			Outstanding			Stock		Capital		Loss			Earnings			at Cost			Equity
Balance at January 1, 2024		33,918,035		(3,549,380	)		30,368,655		$	34	$	586,912	$	(71,928	)	$	319,048		$	(132,175	)	$	701,891
Issuance of awards pursuant to equity incentive plans, net of forfeitures		206,875		—			206,875			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		1,735		—			—			—			1,735
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(33,420	)		(33,420	)		—		—		—			—			(518	)		(518	)
Repurchase of common stock		—		(270,000	)		(270,000	)		—		—		—			—			(4,321	)		(4,321	)
Cash dividends paid (common stock, $0.50/share)		—		—			—			—		—		—			(15,271	)		—			(15,271	)
Net income		—		—			—			—		—		—			29,615			—			29,615
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		(4,298	)		—			—			(4,298	)
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		(1,774	)		—			—			(1,774	)
Balance at June 30, 2024		34,124,910		(3,852,800	)		30,272,110		$	34	$	588,647	$	(78,000	)	$	333,392		$	(137,014	)	$	707,059
Balance at January 1, 2025		34,151,464		(3,955,465	)		30,195,999		$	34	$	591,069	$	(70,723	)	$	350,869		$	(139,075	)	$	732,174
Issuance of awards pursuant to equity incentive plans, net of forfeitures		142,573		—			142,573			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		1,756		—			—			—			1,756
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(42,004	)		(42,004	)		—		—		—			—			(938	)		(938	)
Repurchase of common stock		—		(120,000	)		(120,000	)		—		—		—			—			(2,752	)		(2,752	)
Cash dividends paid (common stock, $0.54/share)		—		—			—			—		—		—			(16,407	)		—			(16,407	)
Net income		—		—			—			—		—		—			32,789			—			32,789
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		15,892			—			—			15,892
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		320			—			—			320
Balance at June 30, 2025		34,294,037		(4,117,469	)		30,176,568		$	34	$	592,825	$	(54,511	)	$	367,251		$	(142,765	)	$	762,834

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

7

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net income	$	32,789		$	29,615
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,244			3,214
Amortization of servicing assets - net		1,372			1,366
Share-based compensation expense		1,756			1,735
Credit loss expense		10,352			1,188
(Gain) loss on sales of SBA loans		(4,161	)		(3,126	)
Origination of loans held for sale		(108,610	)		(47,595	)
Proceeds from sales of loans		80,730			51,070
(Gain) loss on sales of residential loans		(175	)		(808	)
Change in bank-owned life insurance		183			131
Change in prepaid expenses and other assets		(4,681	)		4,730
Change in income tax assets		(988	)		(4,087	)
Change in accrued interest payable and other liabilities		(4,958	)		(5,399	)
Net cash provided by operating activities		6,853			32,034
Cash flows from investing activities:
Purchases of securities available for sale		(101,004	)		(78,454	)
Proceeds from matured, called and repayment of securities		109,626			58,848
Purchases of loans receivable		(44,631	)		(24,656	)
Proceeds from sales of residential mortgage loans		—			50,352
Purchases of premises and equipment		(832	)		(1,563	)
Proceeds from disposition of premises and equipment		14			—
Proceeds from sales of other real estate owned ("OREO")		713			—
Change in loans receivable, excluding purchases and sales		(33,736	)		(21,956	)
Net cash used in investing activities		(69,850	)		(17,429	)
Cash flows from financing activities:
Change in deposits		293,346			48,765
Change in open FHLB advances		(135,000	)		(32,500	)
Cash paid for employee vested shares surrendered due to employee tax liability		(938	)		(518	)
Repurchase of common stock		(2,754	)		(4,326	)
Cash dividends paid		(16,407	)		(15,271	)
Net cash provided by (used in) financing activities		138,247			(3,850	)
Net increase in cash and due from banks		75,250			10,755
Cash and due from banks at beginning of year		304,800			302,324
Cash and due from banks at end of period	$	380,050		$	313,079
Supplemental disclosures of cash flow information:
Interest paid	$	92,615		$	90,586
Income taxes paid	$	13,590		$	22,365
Non-cash activities:
Transfer of fixed assets to other real estate owned		-		$	655
Income tax (expense) benefit related to other comprehensive income items	$	(6,484	)	$	2,796
Change in right-of-use asset obtained in exchange for lease liability	$	(3,814	)	$	(1,932	)

See Accompanying Notes to Consolidated Financial Statements (Unaudited)

8

Hanmi Financial Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 1 — Organization and Basis of Presentation

Hanmi Financial Corporation (“Hanmi Financial,” the “Company,” “we,” “us” or “our”) is a bank holding company whose primary subsidiary is Hanmi Bank (the “Bank”). Our primary operations are related to traditional banking activities, including the acceptance of deposits and the lending and investing of money by the Bank.

In management’s opinion, the accompanying unaudited consolidated financial statements of Hanmi Financial and its subsidiaries reflect all adjustments of a normal and recurring nature that are necessary for a fair presentation of the results for the interim period ended June 30, 2025. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. The unaudited consolidated financial statements are prepared in conformity with GAAP and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Operating results for the three or six-month periods ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ended December 31, 2025 or for any other period. The interim information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”).

The preparation of interim unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the unaudited financial statements and disclosures provided, and actual results could differ.

Descriptions of our significant accounting policies are included in Note 1 - Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in the 2024 Annual Report on Form 10-K.

Effective January 1, 2025, the Company changed its methodology for estimating expected credit losses on its loan portfolio in accordance with Accounting Standards Update ("ASU") 2016-23, Financial Instruments – Credit Losses. Prior to January 1, 2025, the Company primarily used a Probability of Default / Loss Given Default (PD/LGD) model to determine the allowance for credit losses. Following a periodic review of its credit loss estimation process, the Company concluded that a historical loss rate approach, adjusted for current conditions and reasonable and supportable forecasts, more appropriately reflected the expected credit losses for its loan portfolio. This change is considered a change in accounting estimate resulting from a change in methodology and assumptions and was accounted for prospectively in accordance with ASC 250-10-45-17 through 45-18.

The change in methodology had an immaterial impact to the Company’s operating results and financial condition. The provision for credit losses for the six months ended June 30, 2025 reflects this change in estimate. Management believes the revised approach enhances the accuracy and relevance of its allowance for credit losses by aligning the methodology more closely with the Company’s historical experience, the nature of its loan portfolio, and expectations for future economic conditions.

Accounting Standards Adopted in 2025

Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU 2023-09 to enhance the transparency and usefulness of income tax disclosures primarily related to income tax rate reconciliation and income tax information. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 did not have a material effect on the Company’s operating results or financial condition.

Recently Issued Accounting Standards Not Yet Effective

ASU 2024-03, Income Statement Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), as amended by ASU 2025-01, Clarifying the Effective Date: In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03 to require additional information about specific expense categories in the financial statement notes at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements. The amendments affect where the information appears in the financial statement notes. ASU 2025-01 amends the changes in ASU 2024-03 to be effective for fiscal years beginning after December 15, 2026. The adoption of ASU 2024-03 is not expected to have a material effect on the Company’s operating results or financial condition.

9

Note 2 — Securities

The following is a summary of securities available for sale as of the dates indicated:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gain		Loss			Value
	(in thousands)
June 30, 2025
U.S. Treasury securities	$	119,908	$	236	$	(323	)	$	119,821
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		434,588		549		(47,105	)		388,032
Mortgage-backed securities - commercial		73,295		85		(12,030	)		61,350
Collateralized mortgage obligations		203,969		1,861		(7,176	)		198,654
Debt securities		87,287		6		(2,133	)		85,160
Total U.S. government agency and sponsored agency obligations		799,139		2,501		(68,444	)		733,196
Municipal bonds-tax exempt		75,564		—		(10,487	)		65,077
Total securities available for sale	$	994,611	$	2,737	$	(79,254	)	$	918,094
December 31, 2024
U.S. Treasury securities	$	89,208	$	242	$	(521	)	$	88,929
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		453,993		222		(61,643	)		392,572
Mortgage-backed securities - commercial		75,947		24		(13,055	)		62,916
Collateralized mortgage obligations		182,553		404		(9,401	)		173,556
Debt securities		126,776		9		(3,969	)		122,816
Total U.S. government agency and sponsored agency obligations		839,269		659		(88,068	)		751,860
Municipal bonds-tax exempt		76,086		—		(11,077	)		65,009
Total securities available for sale	$	1,004,563	$	901	$	(99,666	)	$	905,798

The amortized cost and estimated fair value of securities as of June 30, 2025 and December 31, 2024, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. All other securities are included based on their contractual maturities.

	June 30, 2025				December 31, 2024
	Available for Sale				Available for Sale
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
	(in thousands)
Within one year	$	121,820	$	121,099	$	93,251	$	92,646
Over one year through five years		106,462		104,431		133,408		129,556
Over five years through ten years		134,725		121,037		90,772		81,833
Over ten years		631,604		571,527		687,132		601,763
Total	$	994,611	$	918,094	$	1,004,563	$	905,798

10

The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded at June 30, 2025 or December 31, 2024, aggregated by major security type and length of time in a continuous unrealized loss position:

	Holding Period
	Less than 12 Months							12 Months or More							Total
	Gross			Estimated		Number		Gross			Estimated		Number		Gross			Estimated		Number
	Unrealized			Fair		of		Unrealized			Fair		of		Unrealized			Fair		of
	Loss			Value		Securities		Loss			Value		Securities		Loss			Value		Securities
	(in thousands, except number of securities)
June 30, 2025
U.S. Treasury securities	$	(28	)	$	27,020		7	$	(295	)	$	8,193		2	$	(323	)	$	35,213		9
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(179	)		19,577		7		(46,926	)		338,997		113		(47,105	)		358,574		120
Mortgage-backed securities - commercial		(309	)		14,631		4		(11,721	)		40,470		12		(12,030	)		55,101		16
Collateralized mortgage obligations		(31	)		5,541		2		(7,145	)		50,234		23		(7,176	)		55,775		25
Debt securities		—			—		—		(2,133	)		69,919		14		(2,133	)		69,919		14
Total U.S. government agency and sponsored agency obligations		(519	)		39,749		13		(67,925	)		499,620		162		(68,444	)		539,369		175
Municipal bonds-tax exempt		—			—		—		(10,487	)		65,077		19		(10,487	)		65,077		19
Total	$	(547	)	$	66,769		20	$	(78,707	)	$	572,890		183	$	(79,254	)	$	639,659		203
December 31, 2024
U.S. Treasury securities	$	(61	)	$	13,603		6	$	(460	)	$	9,771		3	$	(521	)	$	23,374		9
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(271	)		23,276		10		(61,372	)		351,793		114		(61,643	)		375,069		124
Mortgage-backed securities - commercial		(447	)		19,092		5		(12,608	)		41,817		14		(13,055	)		60,909		19
Collateralized mortgage obligations		(645	)		76,963		18		(8,756	)		54,020		24		(9,401	)		130,983		42
Debt securities		(23	)		11,712		3		(3,946	)		107,595		21		(3,969	)		119,307		24
Total U.S. government agency and sponsored agency obligations		(1,386	)		131,043		36		(86,682	)		555,225		173		(88,068	)		686,268		209
Municipal bonds-tax exempt		—			—		—		(11,077	)		65,009		19		(11,077	)		65,009		19
Total	$	(1,447	)	$	144,646		42	$	(98,219	)	$	630,005		195	$	(99,666	)	$	774,651		237

The Company evaluates its available for sale securities portfolio for impairment on a quarterly basis. The Company did not recognize unrealized losses in income because it has the ability and the intent to hold and does not expect to be required to sell these securities until the recovery of their cost basis. The quarterly impairment assessment considers the changes in the credit quality of these debt securities since acquisition and the likelihood of a credit loss occurring over the life of the securities. If a credit loss is expected to occur, an allowance is established and a corresponding credit loss is recognized. Based on its analysis, as of June 30, 2025, the Company determined that no credit losses were expected to be realized on the tax-exempt municipal bond portfolio. The remainder of the portfolio consists of U.S. Treasury obligations, U.S. government agency securities, and U.S. government sponsored agency securities, all of which have the backing of the U.S. government, and are therefore not expected to incur credit losses.

There were no sales of securities during the six months ended June 30, 2025 or June 30, 2024.

Securities available for sale with market values of $27.9 million and $29.4 million as of June 30, 2025 and December 31, 2024, respectively, were pledged to secure borrowings from the Federal Reserve Bank (“FRB”) Discount Window.

At June 30, 2025, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

11

Note 3 — Loans

Loans Receivable

Loans consisted of the following as of the dates indicated:

	June 30, 2025			December 31, 2024
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,116,540		$	1,068,978
Hospitality		822,021			848,134
Office		556,453			568,861
Other (1)		1,373,836			1,385,051
Total commercial property loans		3,868,850			3,871,024
Construction		80,072			78,598
Residential (2)		993,869			951,302
Total real estate loans		4,942,791			4,900,924
Commercial and industrial loans		917,995			863,431
Equipment financing agreements		445,171			487,022
Loans receivable		6,305,957			6,251,377
Allowance for credit losses		(66,756	)		(70,147	)
Loans receivable, net	$	6,239,201		$	6,181,230

(1)Includes mixed-use, multifamily, industrial, gas stations, faith-based facilities, and medical; all other property types represent less than one percent of total loans receivable.

(2)Includes $8.3 million and $1.3 million of home equity loans and lines, and $7.1 million and $4.1 million of personal loans at June 30, 2025 and December 31, 2024, respectively.

Accrued interest on loans was $19.8 million and $19.1 million at June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025 and December 31, 2024, loans with carrying values of $2.40 billion and $2.46 billion, respectively, were pledged to secure advances from the FHLB.

Loans Held for Sale

The following is the activity for loans held for sale for the following periods:

	Real Estate			Commercial and Industrial			Total
	(in thousands)
Three months ended June 30, 2025
Balance at beginning of period	$	5,015		$	6,816		$	11,831
Originations and transfers		56,000			17,190			73,190
Sales		(15,601	)		(19,787	)		(35,388	)
Principal paydowns and amortization		(2	)		(20	)		(22	)
Balance at end of period	$	45,412		$	4,199		$	49,611
Three months ended June 30, 2024
Balance at beginning of period	$	1,454		$	2,545		$	3,999
Originations and transfers		20,572			9,391			29,963
Sales		(14,877	)		(8,613	)		(23,490	)
Principal paydowns and amortization		—			(5	)		(5	)
Balance at end of period	$	7,149		$	3,318		$	10,467

12

	Real Estate			Commercial and Industrial			Total
	(in thousands)
Six months ended June 30, 2025
Balance at beginning of period	$	3,994		$	4,585		$	8,579
Originations and transfers		74,615			33,995			108,610
Sales		(33,195	)		(34,358	)		(67,553	)
Principal payoffs and amortization		(2	)		(23	)		(25	)
Balance at end of period	$	45,412		$	4,199		$	49,611
Six months ended June 30, 2024
Balance at beginning of period	$	8,792		$	3,221		$	12,013
Originations and transfers		30,186			17,409			47,595
Sales		(31,775	)		(17,301	)		(49,076	)
Principal payoffs and amortization		(54	)		(11	)		(65	)
Balance at end of period	$	7,149		$	3,318		$	10,467

The following table presents loans purchased by portfolio segment for the following periods:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Commercial real estate	$	—	$	6,060	$	15,113	$	6,334
Commercial and industrial		—		8,398		9,203		18,322
Residential real estate		10,330		5,178		20,315		5,178
Total	$	10,330	$	19,636	$	44,631	$	29,834

Allowance for Credit Losses

Effective January 1, 2025, we transitioned to a new allowance for credit losses (“ACL”) model to perform our ACL analysis. Part of the transition to the new model, in addition to the factors previously mentioned, includes a change in our methodology on commercial and industrial, commercial real estate, and residential loans. The change in models did not result in a material change in our ACL as of January 1, 2025. The table below includes in credit loss expense for the six months ended June 30, 2025 the effect of the ACL model change of $1.4 million.

The following table details the information on the allowance for credit losses by portfolio segment for the following periods:

	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
Three months ended June 30, 2025
Balance at beginning of period	$	51,302		$	6,242		$	13,053		$	70,597
Charge-offs		(8,615	)		(811	)		(2,951	)		(12,377	)
Recoveries		194			198			621			1,013
Credit loss expense		5,140			1,306			1,077			7,523
Ending balance	$	48,021		$	6,935		$	11,800		$	66,756
Three months ended June 30, 2024
Balance at beginning of period	$	42,584		$	11,836		$	13,850		$	68,270
Charge-offs		(93	)		(93	)		(2,152	)		(2,338	)
Recoveries		64			166			318			548
Credit loss expense (recovery)		(403	)		(1,346	)		2,998			1,249
Ending balance	$	42,152		$	10,563		$	15,014		$	67,729

13

	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
Six months ended June 30, 2025
Balance at beginning of period	$	45,099		$	10,006		$	15,042		$	70,147
Charge-offs		(8,785	)		(1,033	)		(5,749	)		(15,567	)
Recoveries		618			234			1,404			2,256
Credit loss expense (recovery)		11,089			(2,272	)		1,103			9,920
Ending balance	$	48,021		$	6,935		$	11,800		$	66,756
Six months ended June 30, 2024
Balance at beginning of period	$	45,499		$	10,257		$	13,706		$	69,462
Charge-offs		(93	)		(248	)		(4,120	)		(4,461	)
Recoveries		111			224			741			1,076
Credit loss expense (recovery)		(3,365	)		330			4,687			1,652
Ending balance	$	42,152		$	10,563		$	15,014		$	67,729

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the aggregate investment of loans receivable as of:

	June 30, 2025										December 31, 2024
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	9,886		14.8	%	$	1,116,540		17.7	%	$	10,171		14.5	%	$	1,068,978		17.1	%
Hospitality		7,579		11.3			822,021		13.1			15,302		21.8			848,134		13.6
Office		5,603		8.4			556,453		8.8			3,935		5.6			568,861		9.1
Other		13,268		19.9			1,373,836		21.8			8,243		11.8			1,385,051		22.2
Total commercial property loans		36,336		54.4			3,868,850		61.4			37,651		53.7			3,871,024		62.0
Construction		1,107		1.7			80,072		1.3			1,664		2.4			78,598		1.3
Residential		10,578		15.8			993,869		15.8			5,784		8.2			951,302		15.2
Total real estate loans		48,021		71.9			4,942,791		78.5			45,099		64.3			4,900,924		78.5
Commercial and industrial loans		6,935		10.4			917,995		14.5			10,006		14.3			863,431		13.8
Equipment financing agreements		11,800		17.7			445,171		7.0			15,042		21.4			487,022		7.7
Total	$	66,756		100.0	%	$	6,305,957		100.0	%	$	70,147		100.0	%	$	6,251,377		100.0	%

The following table represents the amortized cost basis of collateral-dependent loans by class of loans, for which repayment is expected to be obtained through the sale of the underlying collateral, as of:

	June 30, 2025		December 31, 2024
	(in thousands)
Real estate loans:
Commercial property
Retail	$	874	$	1,377
Hospitality		2,514		215
Office		10,990		—
Total commercial property loans		14,378		1,592
Residential		3,997		1,875
Total real estate loans		18,375		3,467
Total	$	18,375	$	3,499

14

Loan Quality Indicators

As part of the on-going monitoring of the quality of our loans portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade (from 1 to 8) for each loan in our portfolio. Third-party loan reviews are conducted annually on a sample basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows:

Pass and Pass-Watch: Pass and Pass-Watch loans, grades (1-4), are in compliance with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under “Special Mention”, “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It consists of all performing loans with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.

Special Mention: A Special Mention loan, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified.

Substandard: A Substandard loan, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.

Doubtful: A Doubtful loan, grade (7), is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the loan, and therefore the amount or timing of a possible loss cannot be determined at the current time.

Loss: A loan classified as Loss, grade (8), is considered uncollectible and of such little value that their continuance as active bank assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as Loss will be charged off in a timely manner.

Under regulatory guidance, loans graded special mention or worse are considered criticized loans, and loans graded substandard or worse are considered classified loans.

15

Loans by Vintage Year and Risk Rating

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2025			2024			2023			2022		2021		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
June 30, 2025
Real estate loans:
Commercial property
Risk Rating										`
Pass / Pass-Watch	$	572,829		$	425,598		$	519,482		$	883,296	$	762,889	$	592,258		$	87,965		$	3,844,317
Special Mention		—			—			—			148		—		301			—			449
Classified		834			678			—			12,534		3,089		6,949			—			24,084
Total commercial property		573,663			426,276			519,482			895,978		765,978		599,508			87,965			3,868,850
YTD gross charge-offs		—			—			—			8,585		—		200			—			8,785
YTD net charge-offs (recoveries)		(3	)		—			—			8,311		—		(139	)		—			8,169
Construction
Risk Rating
Pass / Pass-Watch		19,071			53,002			7,999			—		—		—			—			80,072
Special Mention		—			—			—			—		—		—			—			—
Classified		—			—			—			—		—		—			—			—
Total construction		19,071			53,002			7,999			—		—		—			—			80,072
YTD gross charge-offs		—			—			—			—		—		—			—			—
YTD net charge-offs (recoveries)		—			—			—			—		—		—			—			—
Residential
Risk Rating
Pass / Pass-Watch		128,556			97,446			167,830			343,344		137,640		109,026			7,562			991,404
Special Mention		—			—			—			—		—		—			250			250
Classified		—			—			—			946		—		1,269			—			2,215
Total residential		128,556			97,446			167,830			344,290		137,640		110,295			7,812			993,869
YTD gross charge-offs		—			—			—			—		—		—			—			—
YTD net charge-offs (recoveries)		—			—			—			—		—		(2	)		—			(2	)
Total real estate loans
Risk Rating
Pass / Pass-Watch		720,456			576,046			695,311			1,226,640		900,529		701,284			95,527			4,915,793
Special Mention		—			—			—			148		—		301			250			699
Classified		834			678			—			13,480		3,089		8,218			—			26,299
Total real estate loans		721,290			576,724			695,311			1,240,268		903,618		709,803			95,777			4,942,791
YTD gross charge-offs		—			—			—			8,585		—		200			—			8,785
YTD net charge-offs (recoveries)		(3	)		—			—			8,311		—		(141	)		—			8,167
Commercial and industrial loans:
Risk Rating
Pass / Pass-Watch		216,947			194,113			45,908			68,389		27,439		20,422			332,135			905,353
Special Mention		—			—			—			12,001		—		—			—			12,001
Classified		—			(2	)		—			110		82		47			404			641
Total commercial and industrial loans		216,947			194,111			45,908			80,500		27,521		20,469			332,539			917,995
YTD gross charge-offs		—			373			—			362		—		298			—			1,033
YTD net charge-offs (recoveries)		—			373			(5	)		346		—		85			—			799
Equipment financing agreements:
Risk Rating
Pass / Pass-Watch		77,045			113,036			114,946			94,254		34,222		4,751			—			438,254
Special Mention		—			—			—			—		—		—			—			—
Classified		—			493			1,442			3,693		1,089		200			—			6,917
Total equipment financing agreements		77,045			113,529			116,388			97,947		35,311		4,951			—			445,171
YTD gross charge-offs		—			258			1,826			2,453		1,081		131			—			5,749
YTD net charge-offs (recoveries)		—			229			1,634			1,924		600		(40	)		(2	)		4,345
Total loans receivable:
Risk Rating
Pass / Pass-Watch		1,014,448			883,195			856,165			1,389,283		962,190		726,457			427,662			6,259,400
Special Mention		—			—			—			12,149		—		301			250			12,700
Classified		834			1,169			1,442			17,283		4,260		8,465			404			33,857
Total loans receivable	$	1,015,282		$	884,364		$	857,607		$	1,418,715	$	966,450	$	735,223		$	428,316		$	6,305,957
YTD gross charge-offs		—			631			1,826			11,400		1,081		629			—			15,567
YTD net charge-offs (recoveries)		(3	)		602			1,629			10,581		600		(96	)		(2	)		13,311

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

16

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2024		2023			2022		2021			2020			Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
December 31, 2024
Real estate loans:
Commercial property
Risk Rating
Pass / Pass-Watch	$	533,989	$	558,271		$	930,190	$	800,938		$	553,490		$	271,209		$	101,277		$	3,749,364
Special Mention		29,935		—			1,009		—			—			76,524			—			107,468
Classified		541		—			5,658		3,151			72			4,770			—			14,192
Total commercial property		564,465		558,271			936,857		804,089			553,562			352,503			101,277			3,871,024
YTD gross charge-offs		—		—			274		—			—			136			—			410
YTD net charge-offs (recoveries)		—		—			274		—			(21	)		(704	)		—			(451	)
Construction
Risk Rating
Pass / Pass-Watch		70,601		7,997			—		—			—			—			—			78,598
Special Mention		—		—			—		—			—			—			—			—
Classified		—		—			—		—			—			—			—			—
Total construction		70,601		7,997			—		—			—			—			—			78,598
YTD gross charge-offs		—		—			—		—			1,133			—			—			1,133
YTD net charge-offs (recoveries)		—		—			—		—			1,132			(1,358	)		—			(226	)
Residential
Risk Rating
Pass / Pass-Watch		127,986		200,316			355,134		145,310			11,164			105,406			4,436			949,752
Special Mention		—		—			—		—			—			—			251			251
Classified		—		—			983		—			316			—			—			1,299
Total residential		127,986		200,316			356,117		145,310			11,480			105,406			4,687			951,302
YTD gross charge-offs		—		—			—		—			—			—			—			—
YTD net charge-offs (recoveries)		—		—			—		—			—			(3	)		—			(3	)
Total real estate loans
Risk Rating
Pass / Pass-Watch		732,576		766,584			1,285,324		946,248			564,654			376,615			105,713			4,777,714
Special Mention		29,935		—			1,009		—			—			76,524			251			107,719
Classified		541		—			6,641		3,151			388			4,770			—			15,491
Total real estate loans		763,052		766,584			1,292,974		949,399			565,042			457,909			105,964			4,900,924
YTD gross charge-offs		—		—			274		—			1,133			136			—			1,543
YTD net charge-offs (recoveries)		—		—			274		—			1,111			(2,065	)		—			(680	)
Commercial and industrial loans:
Risk Rating
Pass / Pass-Watch		271,655		59,453			94,385		32,226			12,761			13,360			346,001			829,841
Special Mention		19,473		—			12,401		—			—			20			—			31,894
Classified		—		(5	)		196		102			—			215			1,188			1,696
Total commercial and industrial loans		291,128		59,448			106,982		32,328			12,761			13,595			347,189			863,431
YTD gross charge-offs		19		169			168		—			11			207			2			576
YTD net charge-offs (recoveries)		19		169			160		(13	)		11			123			(3,375	)		(2,906	)
Equipment financing agreements:
Risk Rating
Pass / Pass-Watch		140,143		144,617			129,764		52,354			8,085			3,563			—			478,526
Special Mention		—		—			—		—			—			—			—			—
Classified		431		1,945			3,851		1,934			129			206			—			8,496
Total equipment financing agreements		140,574		146,562			133,615		54,288			8,214			3,769			—			487,022
YTD gross charge-offs		30		1,456			5,128		2,206			354			325			—			9,499
YTD net charge-offs (recoveries)		30		1,299			4,488		1,826			287			(211	)		—			7,719
Total loans receivable:
Risk Rating
Pass / Pass-Watch		1,144,374		970,654			1,509,473		1,030,828			585,500			393,538			451,714			6,086,081
Special Mention		49,408		—			13,410		—			—			76,544			251			139,613
Classified		972		1,940			10,688		5,187			517			5,191			1,188			25,683
Total loans receivable	$	1,194,754	$	972,594		$	1,533,571	$	1,036,015		$	586,017		$	475,273		$	453,153		$	6,251,377
YTD gross charge-offs		49		1,625			5,570		2,206			1,498			668			2			11,618
YTD net charge-offs (recoveries)		49		1,468			4,922		1,813			1,409			(2,153	)		(3,375	)		4,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

17

Loans by Vintage Year and Payment Performance

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2025			2024			2023			2022		2021		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
June 30, 2025
Real estate loans:
Commercial property
Payment performance
Performing	$	573,663		$	425,956		$	519,482		$	884,371	$	765,978	$	596,574		$	87,965		$	3,853,989
Nonperforming		—			320			—			11,607		—		2,934			—			14,861
Total commercial property		573,663			426,276			519,482			895,978		765,978		599,508			87,965			3,868,850
YTD gross charge-offs		—			—			—			8,585		—		200			—			8,785
YTD net charge-offs (recoveries)		(3	)		—			—			8,311		—		(139	)		—			8,169
Construction
Payment performance
Performing		19,071			53,002			7,999			—		—		—			—			80,072
Nonperforming		—			—			—			—		—		—			—			—
Total construction		19,071			53,002			7,999			—		—		—			—			80,072
YTD gross charge-offs		—			—			—			—		—		—			—			—
YTD net charge-offs (recoveries)		—			—			—			—		—		—			—			—
Residential
Payment performance
Performing		128,556			97,446			167,830			341,566		137,640		109,026			7,812			989,876
Nonperforming		—			—			—			2,724		—		1,269			—			3,993
Total residential		128,556			97,446			167,830			344,290		137,640		110,295			7,812			993,869
YTD gross charge-offs		—			—			—			—		—		—			—			—
YTD net charge-offs (recoveries)		—			—			—			—		—		(2	)		—			(2	)
Total real estate loans
Payment performance
Performing		721,290			576,404			695,311			1,225,937		903,618		705,600			95,777			4,923,937
Nonperforming		—			320			—			14,331		—		4,203			—			18,854
Total real estate loans		721,290			576,724			695,311			1,240,268		903,618		709,803			95,777			4,942,791
YTD gross charge-offs		—			—			—			8,585		—		200			—			8,785
YTD net charge-offs (recoveries)		(3	)		—			—			8,311		—		(141	)		—			8,167
Commercial and industrial loans:
Payment performance
Performing		216,947			194,113			45,908			80,390		27,521		20,447			332,539			917,865
Nonperforming		—			(2	)		—			110		—		22			—			130
Total commercial and industrial loans		216,947			194,111			45,908			80,500		27,521		20,469			332,539			917,995
YTD gross charge-offs		—			373			—			362		—		298			—			1,033
YTD net charge-offs (recoveries)		—			373			(5	)		346		—		85			—			799
Equipment financing agreements:
Payment performance
Performing		77,045			113,036			114,946			94,188		34,222		4,751			—			438,188
Nonperforming		—			493			1,442			3,759		1,089		200			—			6,983
Total equipment financing agreements		77,045			113,529			116,388			97,947		35,311		4,951			—			445,171
YTD gross charge-offs		—			258			1,826			2,453		1,081		131			—			5,749
YTD net charge-offs (recoveries)		—			229			1,634			1,924		600		(40	)		(2	)		4,345
Total loans receivable:
Payment performance
Performing		1,015,282			883,553			856,165			1,400,515		965,361		730,798			428,316			6,279,990
Nonperforming		—			811			1,442			18,200		1,089		4,425			—			25,967
Total loans receivable	$	1,015,282		$	884,364		$	857,607		$	1,418,715	$	966,450	$	735,223		$	428,316		$	6,305,957
YTD gross charge-offs		—			631			1,826			11,400		1,081		629			—			15,567
YTD net charge-offs (recoveries)		(3	)		602			1,629			10,581		600		(96	)		(2	)		13,311

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

18

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2024		2023			2022		2021			2020			Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
December 31, 2024
Real estate loans:
Commercial property
Payment performance
Performing	$	564,465	$	558,271		$	936,140	$	804,089		$	553,562		$	351,042		$	101,277		$	3,868,846
Nonperforming		—		—			717		—			—			1,461			—			2,178
Total commercial property		564,465		558,271			936,857		804,089			553,562			352,503			101,277			3,871,024
YTD gross charge-offs		—		—			274		—			—			136			—			410
YTD net charge-offs (recoveries)		—		—			274		—			(21	)		(704	)		—			(451	)
Construction
Payment performance
Performing		70,601		7,997			—		—			—			—			—			78,598
Nonperforming		—		—			—		—			—			—			—			—
Total construction		70,601		7,997			—		—			—			—			—			78,598
YTD gross charge-offs		—		—			—		—			1,133			—			—			1,133
YTD net charge-offs (recoveries)		—		—			—		—			1,132			(1,358	)		—			(226	)
Residential
Payment performance
Performing		127,986		200,316			354,562		145,310			11,164			105,406			4,687			949,431
Nonperforming		—		—			1,555		—			316			—			—			1,871
Total residential		127,986		200,316			356,117		145,310			11,480			105,406			4,687			951,302
YTD gross charge-offs		—		—			—		—			—			—			—			—
YTD net charge-offs (recoveries)		—		—			—		—			—			(3	)		—			(3	)
Total real estate loans
Payment performance
Performing		763,052		766,584			1,290,702		949,399			564,726			456,448			105,964			4,896,875
Nonperforming		—		—			2,272		—			316			1,461			—			4,049
Total real estate loans		763,052		766,584			1,292,974		949,399			565,042			457,909			105,964			4,900,924
YTD gross charge-offs		—		—			274		—			1,133			136			—			1,543
YTD net charge-offs (recoveries)		—		—			274		—			1,111			(2,065	)		—			(680	)
Commercial and industrial loans:
Payment performance
Performing		291,128		59,453			106,863		32,328			12,761			13,498			346,001			862,032
Nonperforming		—		(5	)		119		—			—			97			1,188			1,399
Total commercial and industrial loans		291,128		59,448			106,982		32,328			12,761			13,595			347,189			863,431
YTD gross charge-offs		19		169			168		—			11			207			2			576
YTD net charge-offs (recoveries)		19		169			160		(13	)		11			123			(3,375	)		(2,906	)
Equipment financing agreements:
Payment performance
Performing		140,143		144,617			129,442		52,354			8,079			3,563			—			478,198
Nonperforming		431		1,945			4,173		1,934			135			206			—			8,824
Total equipment financing agreements		140,574		146,562			133,615		54,288			8,214			3,769			—			487,022
YTD gross charge-offs		30		1,456			5,128		2,206			354			325			—			9,499
YTD net charge-offs (recoveries)		30		1,299			4,488		1,826			287			(211	)		—			7,719
Total loans receivable:
Payment performance
Performing		1,194,323		970,654			1,527,007		1,034,081			585,566			473,509			451,965			6,237,105
Nonperforming		431		1,940			6,564		1,934			451			1,764			1,188			14,272
Total loans receivable	$	1,194,754	$	972,594		$	1,533,571	$	1,036,015		$	586,017		$	475,273		$	453,153		$	6,251,377
YTD gross charge-offs		49		1,625			5,570		2,206			1,498			668			2			11,618
YTD net charge-offs (recoveries)		49		1,468			4,922		1,813			1,409			(2,153	)		(3,375	)		4,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

19

The following is an aging analysis of loans, including loans on nonaccrual status, disaggregated by loan class, as of:

	30-59 Days Past Due		60-89 Days Past Due			90 Days or More Past Due		Total Past Due		Current		Total
	(in thousands)
June 30, 2025
Real estate loans:
Commercial property
Retail	$	1,599	$	—		$	401	$	2,000	$	1,114,540	$	1,116,540
Hospitality		1,021		—			2,003		3,024		818,997		822,021
Office		—		—			10,990		10,990		545,463		556,453
Other		662		—			—		662		1,373,174		1,373,836
Total commercial property loans		3,282		—			13,394		16,676		3,852,174		3,868,850
Construction		—		—			—		—		80,072		80,072
Residential		1,928		2,005			487		4,421		989,448		993,869
Total real estate loans		5,210		2,005			13,881		21,097		4,921,694		4,942,791
Commercial and industrial loans		575		209			—		784		917,211		917,995
Equipment financing agreements		5,895		2,145			4,287		12,327		432,844		445,171
Total loans receivable	$	11,680	$	4,359		$	18,168	$	34,208	$	6,271,749	$	6,305,957
December 31, 2024
Real estate loans:
Commercial property
Retail	$	975	$	855		$	254	$	2,084	$	1,066,894	$	1,068,978
Hospitality		516		(50	)		216		682		847,452		848,134
Office		—		212			—		212		568,649		568,861
Other		1,288		—			—		1,288		1,383,763		1,385,051
Total commercial property loans		2,779		1,017			470		4,266		3,866,758		3,871,024
Construction		—		—			—		—		78,598		78,598
Residential		5,129		2,975			980		9,084		942,218		951,302
Total real estate loans		7,908		3,992			1,450		13,350		4,887,574		4,900,924
Commercial and industrial loans		236		132			1,278		1,646		861,785		863,431
Equipment financing agreements		6,154		2,866			5,760		14,780		472,242		487,022
Total loans receivable	$	14,298	$	6,990		$	8,488	$	29,776	$	6,221,601	$	6,251,377

20

Nonaccrual Loans and Nonperforming Assets

The following tables represent the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of:

	June 30, 2025
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	918	$	255	$	—	$	1,173
Hospitality		1,747		944		—		2,691
Office		10,990		—		—		10,990
Other		—		7		—		7
Total commercial property loans		13,655		1,206		—		14,861
Residential		3,993		—		—		3,993
Total real estate loans		17,648		1,206		—		18,854
Commercial and industrial loans		—		130		—		130
Equipment financing agreements		114		6,869		—		6,983
Total	$	17,762	$	8,205	$	—	$	25,967
	December 31, 2024
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,480	$	277	$	—	$	1,757
Hospitality		165		249		—		414
Other		—		7		—		7
Total commercial property loans		1,645		533		—		2,178
Residential		1,866		—		—		1,866
Total real estate loans		3,511		533		—		4,044
Commercial and industrial loans		—		1,404		—		1,404
Equipment financing agreements		513		8,311		—		8,824
Total	$	4,024	$	10,248	$	—	$	14,272

Prior to designating loans nonaccrual, the Company collected and recognized interest income of $15,000 and $361,000 for the three and six months ended June 30, 2025, respectively.

21

The following table details nonperforming assets as of the dates indicated:

	June 30, 2025		December 31, 2024
	(in thousands)
Nonaccrual loans	$	25,967	$	14,272
Loans past due 90 days and still accruing		—		—
Total nonperforming loans receivable		25,967		14,272
Other real estate owned (“OREO”)		—		117
Total nonperforming assets*	$	25,967	$	14,389
* Excludes repossessed personal property of $0.6 million and $0.6 million as of June 30, 2025 and December 31, 2024, respectively.

OREO of $0.1 million is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2024. The Company did not have any OREO at June 30, 2025.

Loan Modifications

The following table presents loan modifications made to borrowers experiencing financial difficulty, by type of modification, with related amortized cost balances, respective percentage shares of the total class of loans, and the related financial effect, as of the periods indicated:

	Principal and Interest Deferment
	Amortized Cost Basis		% of Total Class of Loans			Financial Effect
	(in thousands)
Six months ended June 30, 2025
Commercial property loans: Retail	$	13,533		1.2	%	Two loans with three-month principal and interest deferment

The table above includes two retail commercial loans with an amortized cost of $13.5 million that were modified during the six months ended June 30, 2025.

	Term Extension
	Amortized Cost Basis		% of Total Class of Loans			Financial Effect
	(in thousands)
Six months ended June 30, 2025
Commercial and industrial loans	$	20,620		2.6	%	One loan with term extension of six years

The modified loans above were current at June 30, 2025. No loans were modified during the three months ended June 30, 2025.

During the three and six months ended June 30, 2025 and 2024, there were no payment defaults on loans modified within the preceding 12 months.

22

Note 4 — Servicing Assets

The activity in servicing assets was as follows for the periods indicated:

	Three Months Ended June 30,
	2025			2024
	(in thousands)
Balance at beginning of period	$	6,422		$	6,890
Addition related to sale of loans		678			618
Amortization		(680	)		(672	)
Balance at end of period	$	6,420		$	6,836

	Six Months Ended June 30,
	2025			2024
	(in thousands)
Balance at beginning of period	$	6,457		$	7,070
Addition related to sale of loans		1,335			1,132
Amortization		(1,372	)		(1,366	)
Balance at end of period	$	6,420		$	6,836

At June 30, 2025 and December 31, 2024, we serviced loans sold to unaffiliated parties of $565.7 million and $560.1 million, respectively. These represented loans that were sold for which the Bank continues to provide servicing. These loans are maintained off-balance sheet and are not included in the loans receivable balance. At June 30, 2025, all the loans serviced, except for $33.4 million of residential mortgage loans, were SBA loans.

The Company recorded servicing fee income of $1.3 million and $1.4 million for the three months ended June 30, 2025 and 2024, respectively and $2.6 million and $2.7 million for the six months ended June 30, 2025 and 2024, respectively. Servicing fee income, net of the amortization of servicing assets, is included in other operating income in the consolidated statements of income. Amortization expense was $0.7 million for both the three months ended June 30, 2025 and 2024 and $1.4 million for both the six months ended June 30, 2025 and 2024.

The fair value of servicing rights was $8.1 million at June 30, 2025 and was determined using discount rates ranging from 11.2% to 18.7% and prepayment speeds ranging from 9.9% to 27.7%, depending on the stratification of the specific right. The fair value of servicing rights was $7.9 million at December 31, 2024 and was determined using discount rates ranging from 10.8% to 27.3% and prepayment speeds ranging from 15.4% to 21.2%, depending on the stratification of the specific right.

Note 5 — Income Taxes

The Company’s income tax expense was $6.1 million and $6.0 million, representing an effective income tax rate of 28.8% and 29.3% for the three months ended June 30, 2025 and 2024, respectively. The Company's income tax expense was $13.6 million and $12.5 million, representing an effective income tax rate of 29.3% and 29.7%, for the six months ended June 30, 2025 and 2024, respectively.

Management concluded that as of June 30, 2025 and December 31, 2024, a valuation allowance of $1.5 million was appropriate against certain state net operating loss carry forwards. For all other deferred tax assets, management believes it was more likely than not these deferred tax assets will be realized principally through future taxable income and reversal of existing taxable temporary differences. Net deferred tax assets were $36.8 million and $38.2 million as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025, the Company was subject to examination for its federal tax returns for years ending after December 31, 2020 and for state tax returns for the periods ended after December 31, 2019. As of June 30, 2025, the Company is under audit with the State of New York for tax years 2021 and 2022. During the quarter ended June 30, 2025, there was no material change to the Company’s uncertain tax positions. The Company does not expect its unrecognized tax positions to change significantly over the next twelve months.

23

Note 6 — Goodwill

Goodwill of $11.0 million was recorded as a result of the acquisition of an equipment financing agreements portfolio in 2016. At June 30, 2025 and December 31, 2024, the carrying amount of goodwill was $11.0 million.

The Company performed an impairment analysis in the second quarter of 2025 and determined there was no impairment as of June 30, 2025. No triggering event occurred as of, or subsequent to June 30, 2025, that would require a reassessment of goodwill.

Note 7 — Deposits

The scheduled maturities of time deposits are as follows for the periods indicated:

	Time Deposits More Than $250,000		Other Time Deposits		Total
	(in thousands)
At June 30, 2025
2025	$	734,065	$	718,615	$	1,452,680
2026		422,685		492,255		914,940
2027		—		58,522		58,522
2028		—		14,119		14,119
2029 and thereafter		—		473		473
Total	$	1,156,750	$	1,283,984	$	2,440,734
At December 31, 2024
2025	$	1,002,785	$	1,254,185	$	2,256,970
2026		264		19,112		19,376
2027		—		48,630		48,630
2028		—		130		130
2029 and thereafter		—		177		177
Total	$	1,003,049	$	1,322,234	$	2,325,283

Accrued interest payable on deposits was $30.6 million and $34.8 million at June 30, 2025 and December 31, 2024, respectively. Total deposits reclassified to loans due to overdrafts at June 30, 2025 and December 31, 2024 were $1.5 million and $1.2 million, respectively.

Note 8 — Borrowings and Subordinated Debentures

At June 30, 2025, the Bank had $90.0 million of open advances and $37.5 million of term advances at the FHLB with a weighted average interest rate of 4.64% and 4.58%, respectively. At December 31, 2024, the Bank had $225.0 million of open advances and $37.5 million of term advances at the FHLB with a weighted average rate of 4.78% and 4.58%, respectively. Interest expense on borrowings for the six months ended June 30, 2025 and 2024 was $2.7 million and $3.6 million, respectively.

	June 30, 2025					December 31, 2024
	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Open advances	$	90,000		4.64	%	$	225,000		4.78	%
Advances due within 12 months		25,000		4.44			—		—
Advances due over 12 months through 24 months		12,500		4.85			37,500		4.58
Outstanding advances	$	127,500		4.62	%	$	262,500		4.75	%

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The following is financial data pertaining to FHLB advances:

	June 30, 2025			December 31, 2024
	(dollars in thousands)
Weighted-average interest rate at end of period		4.62	%		4.75	%
Weighted-average interest rate during the period		4.57	%		4.37	%
Average balance of FHLB advances	$	119,213		$	154,112
Maximum amount outstanding at any month-end	$	152,500		$	350,000

The Bank maintains a secured credit facility with the FHLB, allowing the Bank to borrow on an overnight, open (no maturity) and a term basis. The Bank had pledged $2.40 billion and $2.46 billion of loans at carrying values as collateral with the FHLB as of June 30, 2025 and December 31, 2024, respectively. The remaining available borrowing capacity was $1.52 billion and $1.69 billion at June 30, 2025 and December 31, 2024, respectively.

The Bank also had securities pledged with the FRB with market values of $27.9 million and $29.4 million at June 30, 2025 and December 31, 2024, respectively. The pledged securities provided $26.1 million; and $27.6 million in available borrowing capacity through the Fed Discount Window as of June 30, 2025 and December 31, 2024, respectively.

On August 20, 2021, the Company issued $110.0 million of Fixed-to-Floating Subordinated Notes (“2031 Notes”) with a maturity date of September 1, 2031. The 2031 Notes have an initial fixed interest rate of 3.75% per annum, payable semiannually in arrears on March 1 and September 1 of each year, up to but excluding September 1, 2026. From and including September 1, 2026 and thereafter, the 2031 Notes will bear interest at a floating rate per annum equal to the Three-Month Term SOFR plus 310 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year. If the then current three-month term SOFR rate is less than zero, the three-month SOFR will be deemed to be zero. Debt issuance cost was $2.1 million, which is being amortized through the 2031 Notes’ maturity date. At June 30, 2025 and December 31, 2024, the balance of the 2031 Notes included in the Company’s Consolidated Balance Sheet, net of issuance cost, was $108.6 million and $108.5 million, respectively.

The Company assumed Junior Subordinated Deferrable Interest Debentures (“Subordinated Debentures”) as a result of an acquisition in 2014 with an unpaid principal balance of $26.8 million and an estimated fair value of $18.5 million. The $8.3 million discount is being amortized to interest expense through the debentures’ maturity date of March 15, 2036. A trust was formed in 2005, which issued $26.0 million of Trust Preferred Securities (“TPS”) at a 6.26% fixed rate for the first five years and a variable rate of three-month LIBOR plus 140 basis points thereafter and invested the proceeds in the Subordinated Debentures. Beginning September 15, 2023, the variable rate on the TPS changed to three-month SOFR plus 166 basis points, representing the credit spread of 140 basis points and a 26 basis point adjustment to convert three-month LIBOR to three-month SOFR. The rate on the TPS at June 30, 2025 was 5.98%. The TPS will be subject to mandatory redemption if the Subordinated Debentures are repaid by the Company. Interest is payable quarterly, and the Company has the option to defer interest payments on the Subordinated Debentures from time to time for a period not to exceed five consecutive years. At June 30, 2025 and December 31, 2024, the balance of Subordinated Debentures included in the Company’s Consolidated Balance Sheets, net of discount of $4.5 million and $4.7 million, was $22.3 million and $22.1 million, respectively. The amortization of discount was $112,000 and $104,000 for the three months ended June 30, 2025 and 2024, respectively.

Note 9 — Earnings Per Share

Earnings per share (“EPS”) is calculated on both a basic and a diluted basis. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that then shared in earnings, excluding common shares in treasury. For diluted EPS, the weighted-average number of common shares includes the impact of unvested performance stock units (“PSUs”) under the treasury method.

Unvested restricted stock containing rights to non-forfeitable dividends are considered participating securities prior to vesting and have been included in the earnings allocation in computing basic and diluted EPS under the two-class method.

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The following table is a reconciliation of the components used to derive basic and diluted EPS for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
	(dollars in thousands, except per share and unit amounts)
Basic EPS
Net income	$	15,117	$	14,451	$	32,789	$	29,615
Less: income allocated to unvested restricted stock		122		129		272		222
Income allocated to common shares	$	14,995	$	14,322	$	32,517	$	29,393
Weighted-average shares for basic EPS		29,948,836		30,055,913		29,943,279		30,089,341
Basic EPS (1)	$	0.50	$	0.48	$	1.09	$	0.98
Effect of dilutive PSUs		105,620		77,733		105,425		76,840
Diluted EPS
Income allocated to common shares	$	14,995	$	14,322	$	32,517	$	29,393
Weighted-average shares for diluted EPS		30,054,456		30,133,646		30,048,704		30,166,181
Diluted EPS (1)	$	0.50	$	0.48	$	1.08	$	0.97

(1)Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

On a weighted-average basis, options to purchase 3,000 and 31,000 shares of common stock were excluded from the calculation of diluted earnings per share for the six months ended June 30, 2025 and 2024, respectively, because their effect would have been anti-dilutive. There were no anti-dilutive unvested PSUs outstanding for the six months ended June 30, 2025 and 91,732 anti-dilutive unvested PSUs outstanding for the six months ended June 30, 2024.

During the six months ended June 30, 2025, 53,509 PSUs were awarded to executive officers from the 2021 Equity Compensation Plan, with a fair value of $1.2 million on the grant date. 88,598 PSUs were awarded to executive officers during the six months ended June 30, 2024 with a fair value of $1.3 million on the grant date. These units have a three-year cliff vesting period and include dividend equivalent rights. Total PSUs outstanding as of June 30, 2025 were 191,804 with an aggregate grant fair value of $3.5 million. Total PSUs outstanding as of June 30, 2024 were 180,330 with an aggregate grant fair value of $3.4 million.

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Note 10 — Regulatory Matters

Federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.0% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%. In addition to the risk-based guidelines, federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of Tier 1 capital to average assets, referred to as the leverage ratio, of 4.0%.

In order for banks to be considered “well capitalized,” federal bank regulatory agencies require a minimum ratio of qualifying total capital to risk-weighted assets of 10.0% and a minimum ratio of Tier 1 capital to risk-weighted assets of 8.0%. In addition to the risk-based guidelines, federal bank regulatory agencies require depository institutions to maintain a minimum ratio of Tier 1 capital to average assets, referred to as the leverage ratio, of 5.0%.

At June 30, 2025, the Bank’s capital ratios exceeded the minimum requirements for the Bank to be considered “well capitalized” and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.5% must be met to avoid limitations on the ability of the Bank and the Company to pay dividends, repurchase shares or pay discretionary bonuses. The Bank's capital conservation buffer was 6.39% and 6.43% and the Company's capital conservation buffer was 6.46% and 6.46% as of June 30, 2025 and December 31, 2024, respectively.

In March 2020, federal banking agencies announced an interim final rule to delay the impact on regulatory capital arising from the implementation of the Current Expected Credit Loss ("CECL") methodology contained in ASU 2016-13. The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company and the Bank adopted the capital transition relief over the permissible five-year period. Effective January 1, 2025, the capital transition relief period terminated.

The capital ratios of Hanmi Financial and the Bank as of June 30, 2025 and December 31, 2024 were as follows:

						Minimum					Minimum to Be
						Regulatory					Categorized as
	Actual					Requirement					“Well Capitalized”
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
June 30, 2025
Total capital (to risk-weighted assets):
Hanmi Financial	$	996,444		15.20	%	$	524,002		8.00	%	N/A		N/A
Hanmi Bank	$	942,875		14.39	%	$	523,995		8.00	%	$	654,993		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	816,687		12.46	%	$	393,002		6.00	%	N/A		N/A
Hanmi Bank	$	873,118		13.32	%	$	392,996		6.00	%	$	523,995		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	794,364		12.12	%	$	294,751		4.50	%	N/A		N/A
Hanmi Bank	$	873,118		13.32	%	$	294,747		4.50	%	$	425,746		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	816,687		10.63	%	$	307,282		4.00	%	N/A		N/A
Hanmi Bank	$	873,118		11.43	%	$	305,481		4.00	%	$	381,851		5.00	%
December 31, 2024
Total capital (to risk-weighted assets):
Hanmi Financial	$	979,843		15.24	%	$	514,455		8.00	%	N/A		N/A
Hanmi Bank	$	927,882		14.43	%	$	514,406		8.00	%	$	643,007		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	801,040		12.46	%	$	385,841		6.00	%	N/A		N/A
Hanmi Bank	$	859,079		13.36	%	$	385,804		6.00	%	$	514,406		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	778,941		12.11	%	$	289,381		4.50	%	N/A		N/A
Hanmi Bank	$	859,079		13.36	%	$	289,353		4.50	%	$	417,955		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	801,040		10.63	%	$	301,346		4.00	%	N/A		N/A
Hanmi Bank	$	859,079		11.47	%	$	299,771		4.00	%	$	374,714		5.00	%

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Note 11 — Fair Value Measurements

Fair Value Measurements

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

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

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

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

Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes.

We record securities available for sale at fair value on a recurring basis. Certain other assets, such as loans held for sale, impaired loans, OREO, and core deposit intangible, are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument below:

Securities available for sale - The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges. If quoted prices are not available, fair values are measured using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curve, prepayment speeds, and default rates. Level 1 securities include U.S. Treasury securities that are traded on an active exchange or by dealers or brokers in active over-the-counter markets. The fair value of these securities is determined by quoted prices on an active exchange or over-the-counter market. Level 2 securities primarily include U.S. government agency and sponsored agency mortgage-backed securities, collateralized mortgage obligations and debt securities as well as municipal bonds in markets that are active. In determining the fair value of the securities categorized as Level 2, we obtain reports from nationally recognized broker-dealers detailing the fair value of each investment security held as of each reporting date. The broker-dealers use prices obtained from nationally recognized pricing services to value our fixed income securities. The fair value of the municipal securities is determined based on pricing data provided by nationally recognized pricing services. We review the prices obtained for reasonableness based on our understanding of the marketplace, and also consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. Level 3 securities are instruments that are not traded in the market. As such, no observable market data for the instrument is available, which necessitates the use of significant unobservable inputs.

Derivatives – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

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Loans held for sale - Loans held for sale includes the guaranteed portion of SBA 7(a) loans carried at the lower of cost or fair value. Management obtains quotes, bids or pricing indication sheets on all or part of the loans directly from the purchasing financial institutions. Premiums received or to be received on the quotes, bids or pricing indication sheets are indicative of the fact that cost is lower than fair value. At June 30, 2025 and December 31, 2024, the SBA 7(a) loans held for sale were recorded at its cost. We record SBA 7(a) loans held for sale on a nonrecurring basis with Level 2 inputs.

Nonperforming loans – Nonaccrual loans receivable and loans 90-days past due and still accruing interest are considered nonperforming for reporting purposes. All nonperforming loans with a carrying balance over $250,000 are individually evaluated for the amount of impairment, if any. Nonperforming loans with a carrying balance of $250,000 or less are evaluated collectively. However, from time to time, nonrecurring fair value adjustments to collateral dependent nonperforming loans, for which repayment is expected to be obtained through the sale of the underlying collateral, are recorded based on either the current appraised value of the collateral, or management’s judgment, that are then adjusted based on recent market trends. When the fair value of the collateral is less than the book value, a valuation allowance is established to carry the loan at the fair value of the collateral, and results in a Level 3 measurement.

OREO - Fair value of OREO is based primarily on third party appraisals, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Appraisals are required annually and may be updated more frequently as circumstances require and the fair value adjustments are made to OREO based on the updated appraised value of the property.

Servicing assets - On a quarterly basis, the Company utilizes a third party service to evaluate servicing assets related to loans sold to unaffiliated parties with servicing retained, and result in a Level 3 classification. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date.

Other repossessed assets – Fair value of equipment from equipment financing agreements is based primarily on a third party valuation service, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Valuations are required at the time the asset is repossessed and may be subsequently updated periodically due to the Company’s short-term possession of the asset prior to sale or as circumstances require and the fair value adjustments are made to the asset based on its value prior to sale.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2025 and December 31, 2024, assets and liabilities measured at fair value on a recurring basis are as follows:

	Level 1		Level 2		Level 3
			Significant
			Observable
	Quoted Prices in		Inputs with No
	Active Markets		Active Market		Significant
	for Identical		with Identical		Unobservable
	Assets		Characteristics		Inputs		Total Fair Value
	(in thousands)
June 30, 2025
Assets:
Securities available for sale:
U.S. Treasury securities	$	119,821	$	—	$	—	$	119,821
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		388,032		—		388,032
Mortgage-backed securities - commercial		—		61,350		—		61,350
Collateralized mortgage obligations		—		198,654		—		198,654
Debt securities		—		85,160		—		85,160
Total U.S. government agency and sponsored agency obligations		—		733,196		—		733,196
Municipal bonds-tax exempt		—		65,077		—		65,077
Total securities available for sale	$	119,821	$	798,273	$	—	$	918,094
Derivative financial instruments	$	—	$	3,283	$	—	$	3,283
Liabilities:
Derivative financial instruments	$	—	$	3,439	$	—	$	3,439
December 31, 2024
Assets:
Securities available for sale:
U.S. Treasury securities	$	88,929	$	—	$	—	$	88,929
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		392,572		—		392,572
Mortgage-backed securities - commercial		—		62,916		—		62,916
Collateralized mortgage obligations		—		173,556		—		173,556
Debt securities		—		122,816		—		122,816
Total U.S. government agency and sponsored agency obligations		—		751,860		—		751,860
Municipal bonds-tax exempt		—		65,009		—		65,009
Total securities available for sale	$	88,929	$	816,869	$	—	$	905,798
Derivative financial instruments	$	—	$	4,690	$	—	$	4,690
Liabilities:
Derivative financial instruments	$	—	$	5,292	$	—	$	5,292

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

As of June 30, 2025 and December 31, 2024, assets and liabilities measured at fair value on a non-recurring basis are as follows:

			Level 1		Level 2		Level 3
					Significant
					Observable
			Quoted Prices in		Inputs With No
			Active Markets		Active Market		Significant
			for Identical		With Identical		Unobservable
	Total		Assets		Characteristics		Inputs
	(in thousands)
June 30, 2025
Assets:
Collateral dependent loans (1)	$	18,269	$	—	$	—	$	18,269
Repossessed personal property		605		—		—		605
December 31, 2024
Assets:
Collateral dependent loans (2)	$	3,467	$	—	$	—	$	3,467
Other real estate owned		117		—		—		117
Repossessed personal property		568		—		—		568

(1)Consisted of real estate loans of $18.3 million.

(2)Consisted of real estate loans of $3.5 million.

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The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at June 30, 2025 and December 31, 2024:

	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
June 30, 2025
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	874	Market approach	Adjustments to market data	(45%) to 6% / (17)%	(1)
Hospitality		2,408	Market approach	Adjustments to market data	(11)% to 17% / 1%	(1)
Office		10,990	Market approach	Adjustments to market data	(26)% to (4)% / (14)%	(1)
Residential		3,997	Market approach	Adjustments to market data	(11) to 17% / (1)%	(1)
Total real estate loans		18,269
Total	$	18,269
Repossessed personal property		605	Market approach	Adjustments to market data	N/A	(2)
December 31, 2024
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,377	Market approach	Adjustments to market data	(45)% to 30% / (10)%	(1)
Hospitality		215	Market approach	Adjustments to market data	(11)% to 17% / 5%	(1)
Residential		1,875	Market approach	Adjustments to market data	(11)% to 8% / (2)%	(1)
Total real estate loans		3,467
Total	$	3,467
Other real estate owned	$	117	Market approach	Adjustments to market data	0% to 5% / 4%	(1)
Repossessed personal property		568	Market approach	Adjustments to market data	N/A	(2)

(1)Appraisal reports utilize a combination of valuation techniques including a market approach, where prices and other relevant information generated by market transactions involving similar or comparable properties are used to determine the appraised value. Appraisals may include an ‘as is’ and ‘upon completion’ valuation scenarios. Adjustments are routinely made in the appraisal process by third-party appraisers to adjust for differences between the comparable sales and income data. Adjustments also result from the consideration of relevant economic and demographic factors with the potential to affect property values. Also, prospective values are based on the market conditions which exist at the date of inspection combined with informed forecasts based on current trends in supply and demand for the property types under appraisal. Positive adjustments disclosed in this table represent increases to the sales comparison and negative adjustments represent decreases.

(2)The equipment is usually too small in value to use a professional appraisal service. The values are determined internally using a combination of auction values, vendor recommendations and sales comparisons depending on the equipment type. Some highly commoditized equipment, such as commercial trucks have services that provide industry values.

ASC 825, Financial Instruments, requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured on a recurring basis or non-recurring basis are discussed above.

The estimated fair value of financial instruments has been determined by using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market

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exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825), among other provisions, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Other than certain financial instruments for which we had concluded that the carrying amounts approximate fair value, the fair value estimates shown below were based on an exit price notion as of June 30, 2025, as required by ASU 2016-01. The financial instruments for which we had concluded that the carrying amounts approximate fair value include cash and due from banks, accrued interest receivable and payable, and noninterest-bearing deposits.

The estimated fair values of financial instruments were as follows:

	June 30, 2025
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	380,050	$	380,050	$	—	$	—
Securities available for sale		918,094		119,821		798,273		—
Loans held for sale		49,611		—		51,126		—
Loans receivable, net of allowance for credit losses		6,239,201		—		—		6,195,404
Accrued interest receivable		23,749		23,749		—		—
Derivative financial instruments		3,283		—		3,283		—
Financial liabilities:
Noninterest-bearing deposits		2,105,369		—		2,105,369		—
Interest-bearing deposits		4,623,753		—		—		4,620,420
Borrowings and subordinated debentures		258,460		—		127,460		134,212
Accrued interest payable		30,567		30,567		—		—
Derivative financial instruments		3,439		—		3,439		—

	December 31, 2024
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	304,800	$	304,800	$	—	$	—
Securities available for sale		905,798		88,929		816,869		—
Loans held for sale		8,579		—		9,229		—
Loans receivable, net of allowance for credit losses		6,181,230		—		—		6,078,567
Accrued interest receivable		22,937		22,937		—		—
Financial liabilities:
Noninterest-bearing deposits		2,096,634		—		2,096,634		—
Interest-bearing deposits		4,339,142		—		—		4,336,429
Borrowings and subordinated debentures		393,138		—		262,183		129,226
Accrued interest payable		34,824		34,824		—		—

The methods and assumptions used to estimate the fair value of each class of financial instruments for which it was practicable to estimate that value are explained below:

Cash and due from banks – The carrying amounts of cash and due from banks approximate fair value due to the short-term nature of these instruments (Level 1).

Securities – The fair value of securities, consisting of securities available for sale, is generally obtained from market bids for similar or identical securities, from independent securities brokers or dealers, or from other model-based valuation techniques

33

described above (Level 1 and 2).

Loans held for sale – Loans held for sale are carried at the lower of aggregate cost or fair market value, as determined based upon quotes, bids or sales contract prices (Levels 1 and 2).

Loans receivable, net of allowance for credit losses – The fair value of loans receivable is estimated based on the discounted cash flow approach. To estimate the fair value of the loans, certain loan characteristics such as account types, remaining terms, annual interest rates or coupons, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan-to-value ratios, loss exposures, and remaining balances are considered. Additionally, the Company’s prior charge-off rates and loss ratios as well as various other assumptions relating to credit, interest, and prepayment risks are used as part of valuing the loan portfolio. Subsequently, the loans were individually evaluated by sorting and pooling them based on loan types, credit risk grades, and payment types. Consistent with the requirements of ASU 2016-01, the fair value of the Company's loans receivable is considered to be an exit price notion as of June 30, 2025 (Level 3).

The fair value of collateral dependent loans is estimated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company does not record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent loans are recorded based on the current appraised value of the collateral (Level 3).

Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value (Level 1).

Noninterest-bearing deposits – The fair value of noninterest-bearing deposits is the amount payable on demand at the reporting date (Level 2).

Interest-bearing deposits – The fair value of interest-bearing deposits, such as savings accounts, money market checking, and certificates of deposit, is estimated based on discounted cash flows. The cash flows for non-maturity deposits, including savings accounts and money market checking, are estimated based on their historical decaying experiences. The discount rate used for fair valuation is based on interest rates currently being offered by the Bank on comparable deposits as to amount and term (Level 3).

Borrowings and subordinated debentures – Borrowings consist of FHLB advances, subordinated debentures and other borrowings. Discounted cash flows based on current market rates for borrowings with similar remaining maturities are used to estimate the fair value of borrowings (Level 2 and 3).

Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value (Level 1).

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Note 12 — Off-Balance Sheet Commitments

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved with on-balance sheet items.

The Bank’s exposure to losses in the event of non-performance by the other party to commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for extending loan facilities to customers. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon an extension of credit, was based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, premises and equipment, and income-producing or borrower-occupied properties.

Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. As of June 30, 2025, the Bank was obligated on $150.0 million of letters of credit to the FHLB of San Francisco, which were being used as collateral for $150.0 million in public fund deposits from the State of California.

The following table shows the distribution of total loan commitments as of the dates indicated:

	June 30,		December 31,
	2025		2024
	(in thousands)
Unused commitments to extend credit	$	915,847	$	782,291
Standby letters of credit		118,290		97,463
Commercial letters of credit		14,629		18,324
Total commitments	$	1,048,766	$	898,078

The allowance for credit losses related to off-balance sheet items was maintained at a level believed to be sufficient to absorb current expected lifetime losses related to these unfunded credit facilities. The determination of the allowance adequacy was based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities.

Activity in the allowance for credit losses related to off-balance sheet items was as follows for the periods indicated:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
	(in thousands)					(in thousands)
Balance at beginning of period	$	2,399	$	2,297		$	2,074	$	2,474
Credit loss expense (recovery)		107		(287	)		432		(464	)
Balance at end of period	$	2,506	$	2,010		$	2,506	$	2,010

Note 13 — Leases

The Company enters into leases in the normal course of business primarily for bank branch offices, back-office operations locations, business development offices, information technology data centers and information technology equipment. The Company’s leases have remaining terms ranging from one month to nine years, some of which include renewal or termination options to extend the lease for up to ten years.

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s balance sheet.

Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the term of the lease. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

35

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term.

As of June 30, 2025, the outstanding balances for our right-of-use asset and lease liability were $34.6 million and $38.7 million, respectively. The outstanding balances of the right-of-use asset and lease liability were $35.6 million and $39.8 million, respectively, as of December 31, 2024. The right-of-use asset is reported in prepaid expenses and other assets line item and lease liability is reported in accrued expenses and other liabilities line item on the Consolidated Balance Sheets.

In determining the discount rates, since most of our leases do not provide an implicit rate, we used our incremental borrowing rate provided by the FHLB of San Francisco based on the information available at the commencement date to calculate the present value of lease payments.

At June 30, 2025, future minimum rental commitments under these non-cancelable operating leases, with initial or remaining terms of one year or more, were as follows:

	Amount
	(in thousands)
2025	$	4,337
2026		7,659
2027		7,447
2028		6,985
2029		6,295
Thereafter		10,129
Remaining lease commitments		42,852
Interest		(4,165	)
Present value of lease liability	$	38,687

Net lease expense recognized for the three months ended June 30, 2025 and 2024 were $2.1 million and $2.5 million, respectively. This included operating lease costs of $2.1 million and $2.4 million for the three months ended June 30, 2025 and 2024, respectively. Net lease expense recognized for the six months ended June 30, 2025 and 2024 was $4.2 million and $4.7 million, respectively. Operating lease costs were $4.3 million and $4.6 million for the six months ended June 30, 2025 and 2024, respectively. Sublease income for operating leases was immaterial for both the three and six months ended June 30, 2025 and 2024.

Weighted average remaining lease terms for the Company's operating leases were 5.93 years and 6.35 years as of June 30, 2025 and December 31, 2024, respectively. Weighted average discount rates used for the Company's operating leases were 3.37% and 3.30% as of June 30, 2025 and December 31, 2024, respectively.

Cash paid and included in cash flows from operating activities for amounts used in the measurement of the lease liability of the Company's operating leases was $2.2 million and $2.0 million for the three months ended June 30, 2025 and 2024, respectively, and $4.4 million and $4.2 million for the six months ended June 30, 2025 and 2024, respectively.

Note 14 — Liquidity

Hanmi Financial

As of June 30, 2025, Hanmi Financial had $8.9 million in cash on deposit with its bank subsidiary and $43.2 million of U.S. Treasury securities at fair value. As of December 31, 2024, the Company had $11.4 million in cash on deposit with its bank subsidiary and $38.8 million of U.S. Treasury securities at fair value. Management believes that Hanmi Financial, on a stand-alone basis, had adequate liquid assets to meet its current debt obligations.

Hanmi Bank

The principal objective of our liquidity management program is to maintain the Bank’s ability to meet the day-to-day cash flow requirements of its customers who wish either to withdraw funds or to draw upon credit facilities to meet their cash needs. Management believes that the Bank, on a stand-alone basis, has adequate liquid assets to meet its current obligations. The Bank’s primary funding source will continue to be deposits originating from its branch platform. The Bank’s wholesale funds historically consisted of FHLB advances, brokered deposits, as well as State of California time deposits. As of June 30, 2025 and December 31, 2024, the Bank had $127.5 million and $262.5 million of FHLB advances, and $85.5 million and $60.7 million of brokered deposits,

36

respectively. As of June 30, 2025 and December 31, 2024, the Bank had $150.0 million and $120.0 million of State of California time deposits, respectively.

We monitor the sources and uses of funds on a regular basis to maintain an acceptable liquidity position. The Bank’s primary source of borrowings is the FHLB, from which the Bank is eligible to borrow up to 30% of its assets. As of June 30, 2025 and December 31, 2024, the total borrowing capacity available, based on pledged collateral was $1.80 billion and $1.69 billion, respectively. The remaining available borrowing capacity was $1.52 billion and $1.30 billion as of June 30, 2025 and December 31, 2024, respectively.

The amount that the FHLB is willing to advance differs based on the quality and character of qualifying collateral pledged by the Bank, and the FHLB may adjust the advance rates for qualifying collateral upwards or downwards from time to time. To the extent deposit renewals and deposit growth are not sufficient to fund maturing and withdrawable deposits, repay maturing borrowings, fund existing and future loans, equipment financing agreements and securities, and otherwise fund working capital needs and capital expenditures, the Bank may utilize the remaining borrowing capacity from its FHLB borrowing arrangement.

As a means of augmenting its liquidity, the Bank also had an available borrowing source of $26.1 million from the Federal Reserve Discount Window, to which the Bank pledged securities with a carrying value of $33.4 million, with no borrowings outstanding as of June 30, 2025. At December 31, 2024, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window was $27.6 million on pledged securities with market values of $29.4 million, with no borrowings outstanding. The Bank also maintains a line of credit for repurchase agreements up to $100.0 million. The Bank also had three unsecured federal funds lines of credit totaling $140.0 million with no outstanding balances as of June 30, 2025 or December 31, 2024.

Note 15 — Derivatives and Hedging Activities

Risk Management Objective of Using Derivative

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Derivatives Designated as Hedging Instruments - Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets. During the fourth quarter of 2023, the Company entered into a $100.0 million notional interest rate swap designated as a cash flow hedge, with an effective date of May 1, 2024 and a maturity date of May 1, 2026, to hedge a pool of Prime Rate-indexed loans against falling rates. The principal balance of the loan pool designated for the Prime Rate-indexed loans was $131.4 million as of June 30, 2025. During the first quarter of 2024, the Company entered into a $75.0 million notional interest rate swap designated as a cash flow hedge, with an effective date of May 1, 2024 and a maturity date of May 1, 2026, to hedge a pool of one-month SOFR-indexed loans against falling rates. The principal balance of the loan pool designated for the SOFR-indexed loans was $101.5 million as of June 30, 2025.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Management evaluated the effectiveness of the Company’s derivatives designated as cash flow hedges at inception and at the balance sheet date and determined they are effective. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate asset. During the next 12 months, the Company estimates that an additional $0.1 million will be reclassified as a decrease to interest income.

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Derivatives Not Designated as Hedging Instruments

The Company also enters into interest rate swap agreements between the Company and its customers and other third-party counterparties. The Company enters into “back to back swap” arrangements whereby the Company executes interest rate swap agreements with its customers and acquires an offsetting swap position from a third-party counterparty. These derivative financial statements are accounted for at fair value, with changes in fair value recognized in the Company’s Consolidated Statements of Income.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of June 30, 2025 and December 31, 2024.

As of June 30, 2025	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	100,485	Other Assets	$	3,283	$	100,485	Other Liabilities	$	3,274
Total derivatives not designated as hedging instruments				$	3,283				$	3,274
Derivatives designated as hedging instruments
Interest rate products	$	—	Other Assets	$	—	$	175,000	Other Liabilities	$	165
Total derivatives designated as hedging instruments				$	—				$	165
As of December 31, 2024	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	101,892	Other Assets	$	4,690	$	101,892	Other Liabilities	$	4,650
Total derivatives not designated as hedging instruments				$	4,690				$	4,650
Derivatives designated as hedging instruments
Interest rate products	$	—	Other Assets	$	—	$	175,000	Other Liabilities	$	642
Total derivatives designated as hedging instruments				$	—				$	642

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The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income for the three and six months ended June 30, 2025 and 2024.

Three Months Ended June 30, 2025
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	(234	)	$	(234	)	$	—	Interest Income	$	(248	)	$	(248	)	$	—
Total	$	(234	)	$	(234	)	$	—		$	(248	)	$	(248	)	$	—
Three Months Ended June 30, 2024
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	(746	)	$	(746	)	$	—	Interest Income	$	(460	)	$	(460	)	$	—
Total	$	(746	)	$	(746	)	$	—		$	(460	)	$	(460	)	$	—

39

Six Months Ended June 30, 2025
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	44		$	44		$	—	Interest Income	$	(493	)	$	(493	)	$	—
Total	$	44		$	44		$	—		$	(493	)	$	(493	)	$	—
Six Months Ended June 30, 2024
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative			Amount of Gain or (Loss) Recognized in OCI Included Component			Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	(2,953	)	$	(2,953	)	$	—	Interest Income	$	(460	)	$	(460	)	$	—
Total	$	(2,953	)	$	(2,953	)	$	—		$	(460	)	$	(460	)	$	—

The table below presents the effect of cash flow hedge accounting on the Income Statement for the three and six months ended June 30, 2025 and 2024.

	Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationship
	Three Months Ended										Six Months Ended
	June 30,										June 30,
	2025					2024					2025					2024
	Interest Income			Interest Expense		Interest Income			Interest Expense		Interest Income			Interest Expense		Interest Income			Interest Expense
	(in thousands)										(in thousands)
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income	$	(248	)	$	—	$	(460	)	$	—	$	(493	)	$	—	$	(460	)	$	—
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income - included component		(248	)		—		(460	)		—		(493	)		—		(460	)		—

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The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Income Statement for the three and six months ended June 30, 2025 and 2024.

Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended June 30,					Six Months Ended June 30,
		2025			2024		2025			2024
		(in thousands)					(in thousands)
Interest rate products	Other income	$	(16	)	$	3	$	(31	)	$	26
Total		$	(16	)	$	3	$	(31	)	$	26

No fee income was recognized from its derivative financial instruments for the six months ended June 30, 2025 or 2024.

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The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2025 and December 31, 2024. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The derivative assets are located within the prepaid and other assets line item on the Consolidated Balance Sheets and the derivative liabilities are located within the accrued expenses and other liabilities line item on the Consolidated Balance Sheets.

Offsetting of Derivative Assets
As of June 30, 2025
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	3,283	$	—	$	3,283	$	548	$	2,380	$	355
Offsetting of Derivative Liabilities
As of June 30, 2025
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	3,439	$	—	$	3,439	$	548	$	—	$	2,891
Offsetting of Derivative Assets
As of December 31, 2024
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	4,690	$	—	$	4,690	$	642	$	4,048	$	—
Offsetting of Derivative Liabilities
As of December 31, 2024
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	5,292	$	—	$	5,292	$	642	$	—	$	4,650

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The Company has agreements with each of its derivative counterparties that contain a provision stating if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. In addition, these agreements may also require the Company to post additional collateral should it fail to maintain its status as a well- or adequately- capitalized institution.

As of June 30, 2025 and December 31, 2024, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0. As of June 30, 2025 and December 31, 2024, no collateral was provided related to these agreements.

Note 16 — Segment Reporting

The Company has one reportable segment, Banking, as determined by the Chief Financial Officer, who is designated the chief operating decision maker, based upon information provided about the Company's products and services offered, which are primarily banking operations. The Banking segment is also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business. The chief operating decision maker uses net interest income, net interest margin, non-interest income, non-interest expense, credit loss expense, and net income to assess performance and in the determination of allocating resources. These metrics, coupled with monitoring of budget to actual results, are used in assessment performance and in establishing compensation. Loans, investments, and deposits provide the revenues in our banking operations. Interest expense, provisions for credit losses, and salaries and benefits provide the significant expenses in our banking operations.

The following table presents information reported internally for performance assessment by the chief operating decision maker for the following periods:

	Banking Segment
	Quarter Ended June 30,
	2025		2024
	(in thousands)
Net interest income	$	57,139	$	48,620
Noninterest income		8,071		8,057
Segment revenues		65,210		56,677
Other revenues		—		—
Total consolidated revenues		65,210		56,677
Less:
Credit loss expense		7,631		961
Noninterest expenses		36,347		35,276
Income tax expense		6,115		5,989
Segment net income		15,117		14,451
Reconciliation of profit:
Adjustments and reconciling items		—		—
Consolidated net income		15,117		14,451

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	Banking Segment
	Six Months Ended June 30,
	2025		2024
	(in thousands)
Net interest income	$	112,231	$	99,274
Noninterest income		15,796		15,790
Segment revenues		128,027		115,064
Other revenues		—		—
Total consolidated revenues		128,027		115,064
Less:
Credit loss expense		10,352		1,188
Noninterest expenses		71,330		71,720
Income tax expense		13,556		12,541
Segment net income		32,789		29,615
Reconciliation of profit:
Adjustments and reconciling items		—		—
Consolidated net income		32,789		29,615
	June 30,		December 31,
	2025		2024
Segment assets		7,862,363		7,677,925
Other assets		—		—
Consolidated assets	$	7,862,363	$	7,677,925

Note 17 — Subsequent Events

Cash Dividend

On July 24, 2025, the Company announced that the Board of Directors of the Company declared a quarterly cash dividend of $0.27 per share to be paid on August 20, 2025 to stockholders of record as of the close of business on August 4, 2025.

Recent Regulatory and Legislative Developments

On July 4, 2025, President Trump signed into law the legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14" and commonly referred to as the One Big Beautiful Bill (the "Act"). The Company is currently evaluating income tax implications of the Act. The Company does not currently expect the Act to have a material impact on the Company's financial statements.

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

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

Forward-Looking Statements

Some of the statements contained in this Report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this Report other than statements of historical fact are “forward–looking statements” for purposes of federal and state securities laws, including, but not limited to, statements about anticipated future operating and financial performance, financial condition and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital and strategic plans and other similar forecasts and statements of expectation and statements of assumptions underlying any of the foregoing. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, financial condition, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statements. These factors include:

•a failure to maintain adequate levels of capital and liquidity to support our operations;

•general economic and business conditions internationally, nationally and in those areas in which we operate, including potential recessionary conditions;

•volatility and deterioration in the credit and equity markets;

•changes in investor sentiment or consumer spending, borrowing and savings habits;

•availability of capital from private and government sources;

•demographic changes;

•competition for loans and deposits and failure to attract or retain loans and deposits;

•inflation and fluctuations in interest rates that reduce our margins and yields, the fair value of financial instruments, the level of loan originations or prepayments on loans we have made and make, the level of loan sales and the cost we pay to retain and attract deposits and secure other types of funding;

•our ability to enter new markets successfully and capitalize on growth opportunities;

•the current or anticipated impact of military conflict, terrorism or other geopolitical events;

•the effect of potential future supervisory action against us or Hanmi Bank and our ability to address any issues raised in our regulatory exams;

•risks of natural disasters;

•legal proceedings and litigation brought against us;

•a failure in or breach of our operational or security systems or infrastructure, including cyberattacks;

•the failure to maintain current technologies;

•risks associated with Small Business Administration loans;

•failure to attract or retain key employees;

•our ability to access cost-effective funding;

•the imposition of tariffs or other domestic or international governmental policies and retaliatory responses;

•changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;

•fluctuations in real estate values;

•changes in accounting policies and practices;

•changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;

•the ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial considerations;

•strategic transactions we may enter into;

45

•the adequacy of and changes in the economic assumptions and methodology for computing our allowance for credit losses;

•our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses;

•changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements;

•our ability to control expenses; and

•cyber security and fraud risks against our information technology and those of our third-party providers and vendors.

For additional information concerning risks we face, see “Part II, Item 1A. Risk Factors” in this Report and “Item 1A. Risk Factors” in Part I of the 2024 Annual Report on Form 10-K. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.

Critical Accounting Policies

We have established various accounting policies that govern the application of GAAP in the preparation of our financial statements. Our significant accounting policies are described in the Notes to the consolidated financial statements in our 2024 Annual Report on Form 10-K. We had no significant changes in what constituted our accounting policies since the filing of our 2024 Annual Report on Form 10-K.

Certain accounting policies require us to make significant estimates and assumptions that have a material impact on the carrying value of certain assets and liabilities, and we consider these to be critical accounting policies. For a description of these critical accounting policies, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in our 2024 Annual Report on Form 10-K. Actual results could differ significantly from these estimates and assumptions, which could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods. Management has discussed the development and selection of these critical accounting policies with the Audit Committee of the Company’s Board of Directors.

Executive Overview

Net income was $15.1 million, or $0.50 per diluted share, for the three months ended June 30, 2025 compared with $14.5 million, or $0.48 per diluted share, for the same period a year ago. The increase in net income was driven by a $8.5 million increase in net interest income, offset by a $6.6 million increase in credit loss expense, a $1.1 million increase in noninterest expense, and a $0.1 million higher income tax expense. Credit loss expense for the second quarter of 2025 was $7.6 million compared with a $1.0 million expense for the second quarter of 2024.

Net income was $32.8 million, or $1.08 per diluted share, for the six months ended June 30, 2025 compared with $29.6 million, or $0.97 per diluted share, for the same period a year ago. The $3.2 million increase in net income was driven by a $13.0 million increase in net interest income and a $0.4 million decrease in noninterest expense, offset by increases in credit loss expense of $9.2 million and income tax expense of $1.0 million. Credit loss expense for the six months ended June 30, 2025 was $10.4 million compared with credit loss expense of $1.2 million for the six months ended June 30, 2024.

Additional significant financial highlights include:

•Loans receivable increased by $58.0 million, or 0.94%, to $6.24 billion as of June 30, 2025, compared with $6.18 billion as of December 31, 2024. The net increase was due to loan production of $0.7 billion, offset by payoffs, loan sales, and prepayments of $0.6 billion.

•Deposits were $6.73 billion at June 30, 2025 compared with $6.44 billion at December 31, 2024 as money market and savings accounts increased by $159.3 million, time deposits increased by $115.5 million, and demand deposits increased by $18.9 million.

•Return on average assets and return on average stockholders’ equity for the six months ended June 30, 2025 were 0.86% and 8.19%, respectively, as compared with 0.79% and 7.70%, respectively for the six months ended June 30, 2024.

Results of Operations

Net Interest Income

Our primary source of revenue is net interest income, which is the difference between interest derived from earning assets, and interest paid on liabilities obtained to fund those assets. Our net interest income is affected by changes in the level and mix of

46

interest-earning assets and interest-bearing liabilities, referred to as volume changes. Net interest income is also affected by changes in the yields earned on assets and rates paid on liabilities, referred to as rate changes. Interest rates charged on loans are affected principally by changes to market interest rates, the demand for loans receivable, the supply of money available for lending purposes, and other competitive factors. Those factors are, in turn, affected by general economic conditions and other factors beyond our control, such as federal economic policies, the general supply of money in the economy, legislative tax policies, governmental budgetary matters, and the actions of the Federal Reserve.

The following table shows the average balance of assets, liabilities and stockholders’ equity, the amount of interest income, and interest expense, the average yield or rate for each category of interest-earning assets and interest-bearing liabilities, and the net interest spread and the net interest margin on a taxable-equivalent basis for the periods indicated. All average balances are daily average balances.

47

	Three Months Ended
	June 30, 2025								June 30, 2024
				Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate
Assets	(dollars in thousands)
Interest-earning assets:
Loans receivable (1)	$	6,257,741		$	92,589		5.93	%	$	6,089,440		$	90,752		5.99	%
Securities (2)		993,975			6,261		2.55	%		979,671			5,238		2.17	%
FHLB stock		16,385			354		8.65	%		16,385			357		8.77	%
Interest-bearing deposits in other banks		200,266			2,129		4.26	%		180,177			2,313		5.16	%
Total interest-earning assets		7,468,367			101,333		5.44	%		7,265,673			98,660		5.46	%
Noninterest-earning assets:
Cash and due from banks		53,977								55,442
Allowance for credit losses		(70,222	)							(67,908	)
Other assets		250,241								252,410
Total assets	$	7,702,363							$	7,505,617
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	81,308		$	29		0.15	%	$	85,443		$	32		0.15	%
Money market and savings		2,109,221			17,342		3.30	%		1,845,870			17,324		3.77	%
Time deposits		2,434,659			24,553		4.05	%		2,453,154			29,139		4.78	%
Total interest-bearing deposits		4,625,188			41,924		3.64	%		4,384,467			46,495		4.27	%
Borrowings		60,134			684		4.58	%		169,525			1,896		4.50	%
Subordinated debentures		130,880			1,586		4.84	%		130,239			1,649		5.07	%
Total interest-bearing liabilities		4,816,202			44,194		3.68	%		4,684,231			50,040		4.30	%
Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,934,985								1,883,765
Other liabilities		140,053								162,543
Stockholders’ equity		811,123								775,078
Total liabilities and stockholders’ equity	$	7,702,363							$	7,505,617
Net interest income				$	57,139							$	48,620
Cost of deposits (3)							2.56	%							2.98	%
Net interest spread (taxable equivalent basis) (4)							1.76	%							1.16	%
Net interest margin (taxable equivalent basis) (5)							3.07	%							2.69	%

(1)Loans receivable include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans receivable are included in the average loans receivable balance.

(2)Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

(3)Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.

(4)Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.

(5)Represents net interest income as a percentage of average interest-earning assets.

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The table below shows changes in interest income and interest expense and the amounts attributable to variations in interest rates and volumes for the periods indicated. The variances attributable to simultaneous volume and rate changes have been allocated to the change due to volume and the change due to rate categories in proportion to the relationship of the absolute dollar amount attributable solely to the change in volume and to the change in rate.

	Three Months Ended
	June 30, 2025 vs June 30, 2024
	Increases (Decreases) Due to Change In
	Volume			Rate			Total
	(in thousands)
Interest and dividend income:
Loans receivable (1)	$	2,762		$	(925	)	$	1,837
Securities (2)		76			947			1,023
FHLB stock		2			(5	)		(3	)
Interest-bearing deposits in other banks		264			(448	)		(184	)
Total interest and dividend income		3,104			(431	)		2,673
Interest expense:
Demand: interest-bearing	$	(1	)	$	(2	)	$	(3	)
Money market and savings		2,526			(2,508	)		18
Time deposits		(140	)		(4,446	)		(4,586	)
Borrowings		(1,219	)		7			(1,212	)
Subordinated debentures		8			(71	)		(63	)
Total interest expense		1,174			(7,020	)		(5,846	)
Change in net interest income	$	1,930		$	6,589		$	8,519

(1)Loans receivable include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans receivable are included in the average loans receivable balance.

(2)Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

For the three months ended June 30, 2025 and 2024, net interest income was $57.1 million and $48.6 million, respectively. The increase of $8.5 million was due to a decrease in interest expense and an increase in interest and dividend income. The net interest spread and net interest margin, on a taxable equivalent basis, for the quarter ended June 30, 2025, were 1.76% and 3.07%, respectively, compared with 1.16% and 2.69%, respectively, for the same period in 2024. Interest and dividend income increased $2.7 million, or 2.7%, to $101.3 million for the three months ended June 30, 2025 from $98.7 million for the same period in 2024 primarily due to an increase in the average balance of loans. Interest expense decreased $5.8 million, or 11.7%, to $44.2 million for the three months ended June 30, 2025 from $50.0 million for the same period in 2024 primarily due to decreases in deposit rates.

The average balance of interest earning assets increased $202.7 million, or 2.8%, to $7.47 billion for the three months ended June 30, 2025, from $7.27 billion for the three months ended June 30, 2024. The average balance of loans increased $168.3 million, or 2.8%, to $6.26 billion for the three months ended June 30, 2025, from $6.09 billion for the three months ended June 30, 2024. The average balance of securities was $1.0 billion for the three months ended June 30, 2025 and 2024. The average balance of interest-bearing deposits at other banks increased $20.1 million, or 11.1%, to $200.3 million for the three months ended June 30, 2025, from $180.2 million for the three months ended June 30, 2024.

The average yield on interest-earning assets, on a taxable equivalent basis, decreased two basis points to 5.44% for the three months ended June 30, 2025, from 5.46% for the three months ended June 30, 2024. The average yield on loans decreased to 5.93% for the three months ended June 30, 2025, from 5.99% for the three months ended June 30, 2024. The average yield on securities, on a taxable equivalent basis, increased to 2.55% for the three months ended June 30, 2025, from 2.17% for the three months ended June 30, 2024. The increase in the average yield on securities was primarily due to the Company using the proceeds from lower-coupon maturing securities to reinvest into higher-coupon securities.

The average balance of interest-bearing liabilities increased $132.0 million, or 2.8%, to $4.82 billion for the three months ended June 30, 2025 compared with $4.68 billion for the three months ended June 30, 2024. The average balances of money market and savings accounts and increased $263.4 million, offset partially by decreases in borrowings of $109.4 million and in interest-bearing demand deposits and time deposits of $4.1 million and $18.5 million, respectively. The increase in average balances of money market and savings accounts was due to an increase in new commercial accounts. The decrease in the average balance of time deposits was due to the shift to money market and savings accounts as market rates decreased. The decrease in the average balance of borrowings during the three months ended June 30, 2025 was due to the increase in the average balance on interest-bearing deposits.

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The average cost of interest-bearing liabilities was 3.68% and 4.30% for the three months ended June 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits decreased 63 basis points to 3.64% for the three months ended June 30, 2025, compared with 4.27% for the three months ended June 30, 2024. The average cost of time deposits decreased 73 basis points to 4.05% for the three months ended June 30, 2025 compared with 4.78% for the three months ended June 30, 2024. The average cost of money market and savings accounts decreased 47 basis points to 3.30% for the three months ended June 30, 2024 compared with 3.77% for the three months ended June 30, 2024. The decrease in the cost of deposits was due to a decrease in deposit market rates. The average cost of borrowings increased to 4.58% for the three months ended June 30, 2025 compared with 4.50% for the three months ended June 30, 2024, as the lower-rate borrowings matured or were paid off.

The following table shows the average balance of assets, liabilities and stockholders’ equity; the amount of interest income, and interest expense; the average yield or rate for each category of interest-earning assets and interest-bearing liabilities; and the net interest spread and the net interest margin on a taxable-equivalent basis for the periods indicated. All average balances are daily average balances.

	Six Months Ended
	June 30, 2025								June 30, 2024
				Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate
Assets	(dollars in thousands)
Interest-earning assets:
Loans receivable (1)	$	6,223,825		$	183,476		5.94	%	$	6,113,664		$	182,427		6.00	%
Securities (2)		997,716			12,430		2.52	%		974,596			10,193		2.12	%
FHLB stock		16,385			715		8.79	%		16,385			719		8.82	%
Interest-bearing deposits in other banks		188,214			3,968		4.25	%		190,950			4,914		5.18	%
Total interest-earning assets		7,426,140			200,589		5.44	%		7,295,595			198,253		5.46	%
Noninterest-earning assets:
Cash and due from banks		53,824								56,912
Allowance for credit losses		(69,936	)							(68,507	)
Other assets		249,697								248,555
Total assets	$	7,659,725							$	7,532,555
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	80,344		$	56		0.14	%	$	85,922		$	61		0.14	%
Money market and savings		2,073,421			33,779		3.29	%		1,830,478			33,877		3.72	%
Time deposits		2,390,249			48,648		4.10	%		2,480,492			58,195		4.72	%
Total interest-bearing deposits		4,544,014			82,483		3.66	%		4,396,892			92,133		4.21	%
Borrowings		119,460			2,708		4.57	%		165,972			3,551		4.30	%
Subordinated debentures		130,799			3,167		4.84	%		130,163			3,295		5.06	%
Total interest-bearing liabilities		4,794,273			88,358		3.72	%		4,693,027			98,979		4.24	%
Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,915,577								1,902,477
Other liabilities		142,341								163,533
Stockholders’ equity		807,534								773,518
Total liabilities and stockholders’ equity	$	7,659,725							$	7,532,555
Net interest income				$	112,231							$	99,274
Cost of deposits (3)							2.58	%							2.94	%
Net interest spread (taxable equivalent basis) (4)							1.73	%							1.22	%
Net interest margin (taxable equivalent basis) (5)							3.05	%							2.74	%

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(1)Loans receivable include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans receivable are included in the average loans receivable balance.

(2)Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

(3)Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.

(4)Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.

(5)Represents net interest income as a percentage of average interest-earning assets.

The table below shows changes in interest income and interest expense and the amounts attributable to variations in interest rates and volumes for the periods indicated. The variances attributable to simultaneous volume and rate changes have been allocated to the change due to volume and the change due to rate categories in proportion to the relationship of the absolute dollar amount attributable solely to the change in volume and to the change in rate.

	Six Months Ended
	June 30, 2025 vs June 30, 2024
	Increases (Decreases) Due to Change In
	Volume			Rate			Total
	(in thousands)
Interest and dividend income:
Loans receivable (1)	$	2,770		$	(1,721	)	$	1,049
Securities (2)		242			1,995			2,237
FHLB stock		(2	)		(2	)		(4	)
Interest-bearing deposits in other banks		(84	)		(862	)		(946	)
Total interest and dividend income		2,926			(590	)		2,336
Interest expense:
Demand: interest-bearing	$	(4	)	$	(1	)	$	(5	)
Money market and savings		4,390			(4,488	)		(98	)
Time deposits		(2,273	)		(7,274	)		(9,547	)
Borrowings		(1,000	)		157			(843	)
Subordinated debentures		16			(144	)		(128	)
Total interest expense		1,129			(11,750	)		(10,621	)
Change in net interest income	$	1,797		$	11,160		$	12,957

(1)Loans receivable include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans receivable are included in the average loans receivable balance.

(2)Securities average yield is calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

For the six months ended June 30, 2025 and 2024, net interest income was $112.2 million and $99.3 million, respectively. The increase of $12.9 million was primarily due to a decrease in interest expense due to decreases in deposit rates. The net interest spread and net interest margin, on a taxable equivalent basis, for the six months ended June 30, 2025, were 1.73% and 3.05%, respectively, compared with 1.22% and 2.74%, respectively, for the same period in 2024. Interest and dividend income increased $2.3 million, or 1.2%, to $200.6 million for the six months ended June 30, 2025 from $198.3 million for the same period in 2024. Interest expense decreased $10.6 million, or 10.7%, to $88.4 million for the six months ended June 30, 2025 from $99.0 million for the same period in 2024 primarily due to decreases in deposit rates.

The average balance of interest earning assets increased $130.5 million, or 1.8%, to $7.43 billion for the six months ended June 30, 2025, from $7.30 billion for the six months ended June 30, 2024. The average balance of loans increased $110.2 million, or 1.8%, to $6.22 billion for the six months ended June 30, 2025, from $6.11 billion for the six months ended June 30, 2024. The average balance of securities was $1.00 billion for the six months ended June 30, 2025 and 2024. The average balance of interest-bearing deposits at other banks decreased $2.7 million, or 1.4%, to $188.2 million for the six months ended June 30, 2025, from $191.0 million for the six months ended June 30, 2024.

The average yield on interest-earning assets, on a taxable equivalent basis, decreased two basis points to 5.44% for the six months ended June 30, 2025, from 5.46% for the six months ended June 30, 2024. The average yield on loans decreased to 5.94% for the six months ended June 30, 2025, from 6.00% for the six months ended June 30, 2024. The average yield on securities, on a taxable equivalent basis, increased to 2.52% for the six months ended June 30, 2025, from 2.12% for the six months ended June 30, 2024. The increase in the average yield on securities was primarily due to the Company using the proceeds from lower-coupon maturing securities to reinvest into higher-coupon securities.

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The average balance of interest-bearing liabilities increased $101.2 million, or 2.2%, to $4.8 billion for the six months ended June 30, 2025 compared with $4.6 billion for the six months ended June 30, 2024 due to a $147.1 million increase in the average balance of interest-bearing deposits offset by a $46.5 million decrease in the average balance of borrowings. The average balances of money market and savings accounts increased by $242.9 million while the average balance of time deposits decreased $90.2 million. The increase in average balances of money market and savings accounts was due to an increase in new commercial accounts. The decrease in the average balance of time deposits was due to the shift to money market and savings accounts as market rates decreased. The decrease in the average balance of borrowings was due to an increase in the average balance of interest-bearing deposits.

The average cost of interest-bearing liabilities was 3.72% and 4.24% for the six months ended June 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits decreased 55 basis points to 3.66% for the six months ended June 30, 2025, compared with 4.21% for the six months ended June 30, 2024. The average cost of time deposits decreased 62 basis points to 4.10% for the six months ended June 30, 2025 compared with 4.72% for the six months ended June 30, 2024. The average cost of money market and savings accounts decreased 43 basis points to 3.29% for the six months ended June 30, 2024 compared with 3.72% for the six months ended June 30, 2024. The decrease in the cost of deposits was due to a decrease in deposit market rates. The average cost of borrowings increased to 4.57% for the six months ended June 30, 2025 compared with 4.30% for the six months ended June 30, 2024, as the lower-rate borrowings matured or were paid off.

Credit Loss Expense

For the second quarter of 2025, the Company recorded $7.6 million of credit loss expense, comprised of a $7.5 million provision for loan losses and a $0.1 million provision recorded for off-balance sheet items. For the same period in 2024, the Company recorded $1.0 million of credit loss expense, comprised of a $1.2 million provision for loan losses, partially offset by a $0.2 million recovery for off-balance sheet items. The $6.6 million increase in credit loss expense reflected an increase in net charge-offs as well as an increase in quantitative and qualitative estimated loss rates. Net charge-offs included an $8.6 million loan charge-off on a syndicated commercial real estate office loan designated as nonaccrual, which had an associated specific allowance of $6.2 million assigned in the first quarter of 2025.

For the six months ended June 30, 2025, the Company recorded $10.4 million of credit loss expense, comprised of a $9.9 million provision for loan losses and a $0.5 million provision recorded for off-balance sheet items. For the same period in 2024, the Company recorded $1.2 million of credit loss expense, comprised of a $1.7 million provision for loan losses, partially offset by a $0.5 million recovery for off-balance sheet items. The $8.2 million increase in provision for loan losses was the result of a $9.9 million increase in net charge-offs, partially offset by a $2.7 million decrease in specific allowances.

See also “Allowance for Credit Losses and Allowance for Credit Losses Related to Off-Balance Sheet Items” for further details.

Noninterest Income

The following table sets forth the various components of noninterest income for the periods indicated:

	Three Months Ended June 30,				Increase (Decrease)			Increase (Decrease)
	2025		2024		Amount			Percent
	(in thousands)
Service charges on deposit accounts	$	2,169	$	2,429	$	(260	)		(10.70	)%
Trade finance and other service charges and fees		1,461		1,277		184			14.41
Servicing income		754		796		(42	)		(5.28	)
Bank-owned life insurance income		708		638		70			10.97
All other operating income		819		908		(89	)		(9.80	)
Service charges, fees & other		5,911		6,048		(137	)		(2.27	)
Gain on sale of SBA loans		2,160		1,644		516			31.39
Gain on sale of residential mortgage loans		—		365		(365	)		(100.00	)
Total noninterest income	$	8,071	$	8,057	$	14			0.17	%

For the three months ended June 30, 2025 and 2024, noninterest income was $8.1 million. A $0.5 million increase in gain on sale of SBA loans and a $0.2 million increase in trade finance and other service charges was offset by a $0.4 million decrease in gain on sale of residential mortgage loans and $0.3 million decrease in service charges on deposit accounts due to reductions in the number of transactions eligible for service charges.

52

During the second quarter of 2025, the Company sold $35.4 million of SBA loans, recognizing a net gain of $2.2 million. There were no residential mortgage loans sold during the second quarter of 2025. During the second quarter of 2024, the Company sold $19.5 million of residential loans, recognizing a net gain of $0.4 million, and sold $23.5 million of SBA loans, recognizing a net gain of $1.6 million. Trade premiums on SBA loan sales were 7.61% and 8.54% for the three months ended June 30, 2025 and 2024, respectively.

The following table sets forth the various components of noninterest income for the periods indicated:

	Six Months Ended June 30,				Increase (Decrease)			Increase (Decrease)
	2025		2024		Amount			Percent
	(in thousands)
Service charges on deposit accounts	$	4,387	$	4,878	$	(491	)		(10.07	)%
Trade finance and other service charges and fees		2,858		2,691		167			6.21
Servicing income		1,486		1,508		(22	)		(1.46	)
Bank-owned life insurance income		1,017		942		75			7.96
All other operating income		1,712		1,837		(125	)		(6.80	)
Service charges, fees & other		11,460		11,856		(396	)		(3.34	)
Gain on sale of SBA loans		4,161		3,126		1,035			33.11
Gain on sale of residential mortgage loans		175		808		(633	)		(78.34	)
Total noninterest income	$	15,796	$	15,790	$	6			0.04	%

For the six months ended June 30, 2025 and 2024, noninterest income was $15.8 million. The $1.0 million increase in gain on sale of SBA loans and $0.2 million increase in trade finance and other service charges was offset by a $0.6 million decrease in gain on sale of residential mortgage loans and $0.5 million decrease in service charges on deposit accounts due to reductions in the number of transactions eligible for service charges.

During the six months ended June 30, 2025, the Company sold $10.0 million of residential mortgage loans, recognizing a gain of $0.2 million, and sold $67.6 million of SBA loans, recognizing a net gain of $4.2 million. During the six months ended June 30, 2024, the Company sold $49.2 million of residential loans, recognizing a net gain of $0.8 million, and sold $49.1 million of SBA loans, recognizing a net gain of $3.1 million. Trade premiums on SBA loans sales were 7.71% and 7.85% for the six months ended June 30, 2025 and 2024, respectively.

Noninterest Expense

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

	Three Months Ended June 30,					Increase (Decrease)			Increase (Decrease)
	2025			2024		Amount			Percent
	(in thousands)
Salaries and employee benefits	$	22,069		$	20,434	$	1,635			8.00	%
Occupancy and equipment		4,344			4,607		(263	)		(5.71	)
Data processing		3,727			3,686		41			1.11
Professional fees		1,725			1,749		(24	)		(1.37	)
Supplies and communications		515			570		(55	)		(9.65	)
Advertising and promotion		798			669		129			19.28
All other operating expenses		3,567			2,992		575			19.22
Subtotal		36,745			34,707		2,038			5.87
Branch consolidation expense		—			301		(301	)		—
Other real estate owned (income) expense		(461	)		6		(467	)	N/M
Repossessed personal property expense		63			262		(199	)		(75.95	)
Total noninterest expense	$	36,347		$	35,276	$	1,071			3.04	%

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For the three months ended June 30, 2025, noninterest expense was $36.3 million, an increase of $1.1 million, or 3.0%, compared with $35.3 million for the same period in 2024. The increase was mainly attributed to a $1.6 million increase in salaries and employee benefits, a $0.6 million increase in all other operating expenses, and a $0.1 million increase in advertising and promotion, partially offset by a $0.3 million decrease in occupancy and equipment due to branch consolidations and a $0.5 million increase in other real estate owned income due to the gain on sale of other real estate owned. The increase in salaries and employee benefits was mainly attributed to annual merit increases and a decrease in capitalized salaries related to loan originations for the three months ended June 30, 2025 compared with the same period in 2024. Advertising and promotion increased $0.1 million due to new branch promotional expenses. The increase in other operating expenses was due to loan and deposit operations.

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

	Six Months Ended June 30,					Increase (Decrease)			Increase (Decrease)
	2025			2024		Amount			Percent
	(in thousands)
Salaries and employee benefits	$	43,041		$	42,019	$	1,022			2.43	%
Occupancy and equipment		8,794			8,843		(49	)		(0.55	)
Data processing		7,514			7,237		277			3.83
Professional fees		3,194			3,642		(448	)		(12.30	)
Supplies and communications		1,031			1,172		(141	)		(12.03	)
Advertising and promotion		1,382			1,576		(194	)		(12.31	)
All other operating expenses		6,742			6,451		291			4.51
Subtotal		71,698			70,940		758			1.07
Branch consolidation expense		—			301		(301	)	N/M
Other real estate owned (income) expense		(420	)		28		(448	)	N/M
Repossessed personal property expense		52			451		(399	)		(88.47	)
Total noninterest expense	$	71,330		$	71,720	$	(390	)		(0.54	)%

For the six months ended June 30, 2025, noninterest expense was $71.3 million, a decrease of $0.4 million, or 0.5%, compared with $71.7 million for the same period in 2024. The decrease was mainly attributed to a $0.4 million decrease in professional fees, a $0.2 million decrease in advertising and promotion, a $0.3 million branch consolidation expense during the six months ended June 30, 2024, a $0.4 million increase in other real estate owned income due to the sale of other real estate owned and $0.4 million decrease in repossessed personal property expense, offset by a $1.0 million increase in salaries and benefits. The increase in salaries and employee benefits was primarily due to an increase in annual merit raises and promotions. Professional fees decreased $0.4 million for the six months ended June 30, 2025 due to the completion of a loan system implementation in 2024. Advertising and promotion decreased $0.2 million due to a decrease in deposit marketing campaign expenses.

Income Tax Expense

Income tax expense was $6.1 million and $6.0 million, representing an effective income tax rate of 28.8% and 29.3% for the three months ended June 30, 2025 and 2024, respectively. Income tax expense was $13.6 million and $12.5 million, representing an effective income tax rate of 29.3% and 29.7% for the six months ended June 30, 2025 and 2024, respectively.

Financial Condition

Securities

As of June 30, 2025, our securities portfolio consisted of U.S. government agency and sponsored agency mortgage-backed securities, collateralized mortgage obligations and debt securities, tax-exempt municipal bonds and U.S. Treasury securities. Most of these securities carry fixed interest rates. Other than holdings of U.S. government agency and sponsored agency obligations, there were no securities of any one issuer exceeding 10% of stockholders’ equity as of June 30, 2025 or December 31, 2024.

Securities increased $12.3 million to $918.1 million at June 30, 2025 from $905.8 million at December 31, 2024, mainly attributed to $101.0 million in securities purchases and a decrease in unrealized losses on securities, net of tax, of $15.9 million during the six months ended June 30, 2025, partially offset by $109.6 million in payments and maturities.

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The following table summarizes the contractual maturity schedule for securities, at amortized cost, and their cost weighted average yield, which is calculated using amortized cost as the weight, as of June 30, 2025:

						After One Year But					After Five Years But
	Within One Year					Within Five Years					Within Ten Years					After Ten Years					Total
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
	(dollars in thousands)
Securities available for sale:
U.S. Treasury securities	$	80,844		4.46	%	$	39,064		3.51	%	$	—		0.00	%	$	—		0.00	%	$	119,908		4.15	%
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		—			—		—			67,608		1.98			366,980		1.91			434,588		1.92
Mortgage-backed securities - commercial		1,480		0.76			3,203		3.46			—		—			68,612		2.48			73,295		2.49
Collateralized mortgage obligations		—		—			81		1.31			1,399		1.03			202,489		4.31			203,969		4.29
Debt securities		39,496		1.52			47,791		2.25			—		—			—		—			87,287		1.92
Total U.S. government agency and sponsored agency obligations		40,976		1.49			51,075		2.32			69,007		1.96			638,081		2.73			799,139		2.58
Municipal bonds-tax exempt		—		—			—		—			53,062		1.33			22,502		1.34			75,564		1.34
Total securities available for sale	$	121,820		3.47	%	$	90,139		2.84	%	$	122,069		1.69	%	$	660,583		2.69	%	$	994,611		2.67	%

Loans Receivable

As of June 30, 2025 and December 31, 2024, loans receivable (excluding loans held for sale), net of deferred loan fees and costs, discounts and allowance for credit losses, were $6.24 billion and $6.18 billion, respectively. For the six months ended June 30, 2025, there was $675.5 million in new loan production, offset partially by $321.8 million in loan sales and payoffs, and amortization and other reductions of $258.1 million. Loan production consisted of commercial real estate loans of $258.6 million, residential mortgages of $138.8 million, commercial and industrial loans of $95.8 million, equipment financing agreements of $80.3 million and SBA loans of $102.1 million.

The table below shows the maturity distribution of outstanding loans, before the allowance for credit losses as of June 30, 2025. In addition, the table shows the distribution of such loans between those with floating or variable interest rates and those with fixed or predetermined interest rates.

	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	169,350	$	306,509	$	425,818	$	136,850	$	78,013	$	1,116,540
Hospitality		145,223		267,240		348,296		44,739		16,523		822,021
Office		241,831		248,758		46,353		9,957		9,554		556,453
Other		338,734		464,636		424,740		107,913		37,813		1,373,836
Total commercial property loans		895,138		1,287,143		1,245,207		299,459		141,903		3,868,850
Construction		76,076		3,996		—		—		—		80,072
Residential		7,103		—		230		4,250		982,286		993,869
Total real estate loans		978,317		1,291,139		1,245,437		303,709		1,124,189		4,942,791
Commercial and industrial loans		416,708		152,778		152,214		196,295		—		917,995
Equipment financing agreements		32,819		222,640		175,740		13,972		—		445,171
Loans receivable	$	1,427,844	$	1,666,557	$	1,573,391	$	513,976	$	1,124,189	$	6,305,957
Loans with predetermined interest rates		782,718		1,091,615		640,878		32,641		259,709		2,807,561
Loans with variable interest rates		645,126		574,942		932,513		481,335		864,480		3,498,396

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The table below shows the maturity distribution of outstanding loans, before the allowance for credit losses, with fixed or predetermined interest rates, as of June 30, 2025.

	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	137,363	$	242,039	$	199,583	$	104	$	472	$	579,561
Hospitality		75,370		132,053		94,285		—		215		301,923
Office		122,030		198,116		17,446		—		—		337,592
Other		276,476		291,673		142,975		10,985		3,237		725,346
Total commercial property loans		611,239		863,881		454,289		11,089		3,924		1,944,422
Construction		—		—		—		—		—		—
Residential		1,467		—		21		2,201		255,785		259,474
Total real estate loans		612,706		863,881		454,310		13,290		259,709		2,203,896
Commercial and industrial loans		137,193		5,094		10,828		5,379		—		158,494
Equipment financing agreements		32,819		222,640		175,740		13,972		—		445,171
Loans receivable	$	782,718	$	1,091,615	$	640,878	$	32,641	$	259,709	$	2,807,561

The table below shows the maturity distribution of outstanding loans, before the allowance for credit losses, with floating or variable interest rates (including floating, adjustable and hybrids), as of June 30, 2025.

	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	31,987	$	64,470	$	226,235	$	136,746	$	77,542	$	536,980
Hospitality		69,853		135,187		254,011		44,739		16,307		520,097
Office		119,801		50,642		28,907		9,957		9,554		218,861
Other		62,258		172,964		281,765		96,929		34,574		648,490
Total commercial property loans		283,899		423,263		790,918		288,371		137,977		1,924,428
Construction		76,076		3,995		—		—		—		80,071
Residential		5,637		—		209		2,049		726,503		734,398
Total real estate loans		365,612		427,258		791,127		290,420		864,480		2,738,897
Commercial and industrial loans		279,514		147,684		141,386		190,915		—		759,499
Loans receivable	$	645,126	$	574,942	$	932,513	$	481,335	$	864,480	$	3,498,396

Industry

As of June 30, 2025, the loan portfolio included the following concentrations of loan types to borrowers in industries that represented greater than 10.0% of loans receivable outstanding:

			Percentage of
	Balance as of		Loans Receivable
	June 30, 2025		Outstanding
	(in thousands)
Lessor of nonresidential buildings	$	1,635,211		25.9	%
Hospitality		820,660		13.0	%

Loan Quality Indicators

Loans 30 to 89 days past due and still accruing were $11.0 million at June 30, 2025, compared with $18.5 million at December 31, 2024.

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Activity in criticized loans was as follows for the periods indicated:

	Special Mention			Classified
	(in thousands)
Three months ended June 30, 2025
Balance at beginning of period	$	118,380		$	46,519
Additions		300			4,769
Reductions		(105,980	)		(17,431	)
Ending balance	$	12,700		$	33,857
Three months ended June 30, 2024
Balance at beginning of period	$	62,316		$	23,669
Additions		1,969			13,993
Reductions		(27,363	)		(3,716	)
Ending balance	$	36,922		$	33,946

	Special Mention			Classified
	(in thousands)
Six months ended June 30, 2025
Balance at beginning of period	$	139,613		$	25,683
Additions		448			20,045
Reductions		(127,361	)		(11,871	)
Ending balance	$	12,700		$	33,857
Six months ended June 30, 2024
Balance at beginning of period	$	65,315		$	31,367
Additions		2,522			16,571
Reductions		(30,915	)		(13,992	)
Ending balance	$	36,922		$	33,946

Special mention loans were $12.7 million and $139.6 million at June 30, 2025 and December 31, 2024, respectively. The $126.9 million decrease in the first six months of 2025 reflected loan upgrades of $105.8 million on a commercial and industrial loan during the first quarter and two commercial real estate loans during the second quarter, paydowns of $20.0 million and amortization of $1.5 million, offset by downgrades of $0.4 million. The $28.4 million decrease in special mention loans during the six months ended June 30, 2024 reflected upgrades to pass loans of $19.4 million, downgrades to classified loans of $8.0 million, and paydowns and payoffs of $3.7 million, offset by downgrades from pass loans of $2.7 million. The upgrades to pass loans were primarily attributable to upgrades of two commercial and industrial loans totaling $13.6 million and one commercial real estate loan of $4.3 million during the second quarter of 2024.

Classified loans were $33.9 million and $25.7 million at June 30, 2025 and December 31, 2024, respectively. The $8.2 million increase in classified loans for the six months ended June 30, 2025 resulted from $25.2 million of loan downgrades and $5.8 million of additions to classified loans. The increase in loan downgrades was primarily the result of a $20.0 million commercial real estate office loan designated as nonaccrual during the first quarter of 2025. Additions were offset by $14.6 million of charge-offs, including an $8.6 million charge-off during the second quarter of 2025 on the previously mentioned office loan and $5.6 million of equipment financing charge-offs, $4.3 million of upgrades, $2.6 million of amortization and paydowns and $1.3 million of payoffs. The $2.5 million increase in classified loans during the six months ended June 30, 2024 was primarily driven by new downgrades to classified of $17.6 million, offset by payoffs of $8.3 million, charge-offs of $3.7 million, and paydowns and amortization of $3.1 million.

Nonperforming Assets

Nonperforming loans consist of nonaccrual loans and loans 90 days or more past due and still accruing interest. Nonperforming assets consist of nonperforming loans and OREO. Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless we believe the loan is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s delinquency. When a loan is placed on nonaccrual status, previously accrued but

57

unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest become current and full repayment is expected, which generally occurs after sustained payment of six months. Interest income is recognized on the accrual basis for loans not meeting the criteria for nonaccrual. OREO consists of properties acquired by foreclosure or similar means.

Except for nonaccrual loans, management is not aware of any other loans as of June 30, 2025 for which known credit problems of the borrower would cause serious doubts as to the ability of such borrowers to comply with their present loan repayment terms, or any known events that would result in a loan being designated as nonperforming at some future date.

Nonaccrual loans were $26.0 million and $14.3 million as of June 30, 2025 and December 31, 2024, respectively, representing an increase of $11.7 million, or 82.6%. The increase was due to the previously mentioned commercial real estate office loan designated as nonaccrual during the first quarter of 2025. As of June 30, 2025 and December 31, 2024, 1.57% and 1.81% of equipment financing agreements were on nonaccrual status, respectively. At June 30, 2025, there were no loans 90 days or more past due and still accruing interest. At December 31, 2024, all loans 90 days or more past due were classified as nonaccrual.

The $26.0 million of nonperforming loans as of June 30, 2025 had individually evaluated allowances of $4.1 million, compared with $14.3 million of nonperforming loans with individually evaluated allowances of $6.2 million as of December 31, 2024.

Nonperforming assets were $26.0 million at June 30, 2025, or 0.33% of total assets, compared with $14.4 million, or 0.19%, at December 31, 2024. Additionally, not included in nonperforming assets were repossessed personal property assets associated with equipment finance agreements of $0.6 million and $0.6 million at June 30, 2025 and December 31, 2024, respectively.

Individually Evaluated Loans

The Company reviews loans on an individual basis when the loan does not share similar risk characteristics with loan pools. Individually evaluated loans are measured for expected credit losses based on the present value of expected cash flows discounted at the effective interest rate, the observable market price, or the fair value of collateral.

Individually evaluated loans were $23.0 million and $14.3 million as of June 30, 2025 and December 31, 2024, respectively, representing a increase of $8.7 million, or 60.8%. Specific allowances associated with individually evaluated loans decreased $2.1 million to $4.1 million as of June 30, 2025 compared with $6.2 million as of December 31, 2024. due to increased charge-offs, offset by new specific allowances on individually evaluated loans.

A borrower is experiencing financial difficulties when there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. The Company may modify loans to borrowers experiencing financial difficulties by providing principal forgiveness, a term extension, an other-than-insignificant payment delay, or an interest rate reduction.

The following table presents loan modifications made to borrowers experiencing financial difficulty by type of modification, with related amortized cost balances, respective percentage shares of the total class of loans, and the related financial effect, as of the periods indicated:

	Principal and Interest Deferment
	Amortized Cost Basis	% of Total Class of Loans	Financial Effect
	(in thousands)
Six months ended June 30, 2025
Commercial property loans: Retail	$13,533	1.2%	Two loans with three-month principal and interest deferment

The modified loans above were current at June 30, 2025.

No loans were modified during the three months ended June 30, 2025. The table above includes two retail commercial loans with an amortized cost of $13.5 million that were modified during the six months ended June 30, 2025.

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	Term Extension
	Amortized Cost Basis		% of Total Class of Loans			Financial Effect
	(in thousands)
Six months ended June 30, 2025
Commercial and industrial loans	$	20,620		2.6	%	One loan with term extension of six years

During the three and six months ended June 30, 2025 and 2024, there were no payment defaults on loans modified within the preceding 12 months.

Allowance for Credit Losses and Allowance for Credit Losses Related to Off-Balance Sheet Items

As previously mentioned, effective January 1, 2025, the Company changed its methodology for estimating expected credit losses on its loan portfolio. The Company’s estimate of the allowance for credit losses at June 30, 2025 and December 31, 2024 reflected losses expected over the remaining contractual life of assets based on historical, current, and forward-looking information. The contractual term does not consider extensions, renewals or modifications.

Our allowance for credit losses methodology incorporates a variety of risk considerations, both quantitative and qualitative, that management believes is appropriate to absorb lifetime credit losses at each reporting date. Quantitative factors include the general economic forecast in our markets, risk ratings, delinquency trends, collateral values, changes in nonperforming loans, and other factors.

We use qualitative factors to adjust the allowance calculation for risks not considered by the quantitative calculations. Qualitative factors considered in our methodologies include concentrations of credit, changes in lending management and staff, and quality of the loan review system.

The Company reviews baseline and alternative economic scenarios from Moody’s (previously known as Moody’s Analytics, a subsidiary of Moody’s Corporation) for consideration in the quantitative portion of our analysis of the allowance for credit losses. Moody’s publishes a baseline forecast that represents the estimate of the most likely path for the United States economy through the current business cycle (50% probability that economic conditions will be worse and 50% probability that economic conditions will be better) as well as alternative scenarios to examine how different types of shocks will affect the future performance of the United States economy.

The Company utilizes a midpoint approach of multiple forward-looking scenarios to incorporate losses from a baseline, upside (stronger near-term growth) and downside (slower near-term growth) economy. As a result, the upside and downside scenarios each receive a weight of 30%, and the baseline receives a weight of 40%.

Certain quantitative and qualitative factors used to estimate credit losses and establish an allowance for credit losses are subject to uncertainty. The adequacy of our allowance for credit losses is sensitive to changes in current and forecasted economic conditions that may affect the ability of borrowers to make contractual payments as well as the value of the collateral securing such payments.

Although management believes it uses the best information available to establish the allowance for credit losses, future adjustments to the allowance for credit losses may be necessary and the Company’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.

In addition, because future events affecting borrowers and collateral cannot be predicted without uncertainty, the existing allowance for credit losses may not be adequate or increases may be necessary should the quality of any loans deteriorate as a result of the factors discussed. Any material increase in the allowance for credit losses would adversely impact the Company's financial condition and results of operations.

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The following table reflects our allocation of the allowance for credit losses by loan category as well as the amount of loans in each loan category, including related percentages:

	June 30, 2025										December 31, 2024
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	9,886		14.8	%	$	1,116,540		17.7	%	$	10,171		14.5	%	$	1,068,978		17.1	%
Hospitality		7,579		11.3			822,021		13.1			15,302		21.8			848,134		13.6
Office		5,603		8.4			556,453		8.8			3,935		5.6			568,861		9.1
Other		13,268		19.9			1,373,836		21.8			8,243		11.8			1,385,051		22.2
Total commercial property loans		36,336		54.4			3,868,850		61.4			37,651		53.7			3,871,024		62.0
Construction		1,107		1.7			80,072		1.3			1,664		2.4			78,598		1.3
Residential		10,578		15.8			993,869		15.8			5,784		8.2			951,302		15.2
Total real estate loans		48,021		71.9			4,942,791		78.5			45,099		64.3			4,900,924		78.5
Commercial and industrial loans		6,935		10.4			917,995		14.5			10,006		14.3			863,431		13.8
Equipment financing agreements		11,800		17.7			445,171		7.0			15,042		21.4			487,022		7.7
Total	$	66,756		100.0	%	$	6,305,957		100.0	%	$	70,147		100.0	%	$	6,251,377		100.0	%

The following table sets forth certain ratios related to our allowance for credit losses at the dates presented:

	As of
	June 30, 2025			December 31, 2024
	(dollars in thousands)
Ratios:
Allowance for credit losses to loans receivable		1.06	%		1.12	%
Nonaccrual loans to loans		0.41	%		0.23	%
Allowance for credit losses to nonaccrual loans		257.08	%		491.50	%
Balance:
Nonaccrual loans at end of period	$	25,967		$	14,272
Nonperforming loans at end of period	$	25,967		$	14,272

The allowance for credit losses was $66.8 million and $70.1 million at June 30, 2025 and December 31, 2024, respectively. The allowance attributed to individually evaluated loans was $4.1 million and $6.2 million as of June 30, 2025 and December 31, 2024, respectively. The decrease in the allowance on individually evaluated loans during the six months ended June 30, 2025 was due to increased charge-offs, offset by new specific allowances on individually evaluated loans. The allowance attributed to collectively evaluated loans was $62.7 million and $64.0 million as of June 30, 2025 and December 31, 2024, respectively. The decrease in the allowance attributed to collectively evaluated loans was primarily due to the change in ACL methodology.

As of June 30, 2025 and December 31, 2024, the allowance for credit losses related to off-balance sheet items, primarily unfunded loan commitments, was $2.5 million and $2.1 million, respectively. The Bank closely monitors the borrower’s repayment capabilities, while funding existing commitments to ensure losses are minimized. Based on management’s evaluation and analysis of portfolio credit quality, prevailing economic conditions and economic forecasts, we believe these allowances were adequate for current expected lifetime losses in the loan portfolio and off-balance sheet exposure as of June 30, 2025.

The following table presents a summary of gross charge-offs and recoveries for the loan portfolio:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(in thousands)						(in thousands)
Gross charge-offs	$	(12,377	)	$	(2,338	)	$	(15,567	)	$	(4,461	)
Gross recoveries		1,013			548			2,256			1,076
Net (charge-offs) recoveries	$	(11,364	)	$	(1,790	)	$	(13,311	)	$	(3,385	)

For the three months ended June 30, 2025, gross charge-offs increased $10.0 million from the same period in 2024. Gross recoveries for the three months ended June 30, 2025 increased $0.5 million from the same period in 2024. Gross charge-offs for the three months ended June 30, 2025 primarily consisted of an $8.6 million charge-off on the previously mentioned commercial real estate loan designated as nonaccrual in the first quarter of 2025 and $2.9 million of equipment financing agreements charge-offs.

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Gross charge-offs for the three months ended June 30, 2024 primarily consisted of $2.2 million of equipment financing charge-offs. Gross recoveries for the three months ended June 30, 2025 primarily consisted of $0.6 million of recoveries on equipment financing agreements.

For the six months ended June 30, 2025, gross charge-offs increased $11.1 million from the same period in 2024. Gross recoveries for the six months ended June 30, 2025 increased $1.2 million from the same period in 2024. Gross charge-offs for the six months ended June 30, 2025 primarily consisted of an $8.6 million charge-off on the previously mentioned commercial real estate loan designated as nonaccrual in the first quarter of 2025 and $5.7 million of equipment financing agreements charge-offs. Gross charge-offs for the six months ended June 30, 2024 primarily consisted of $4.1 million of equipment financing agreements charge-offs. Gross recoveries for the six months ended June 30, 2025 primarily consisted of $1.4 million of recoveries on equipment financing agreements.

The following table presents a summary of net (charge-offs) recoveries for the loan portfolio:

	Three Months Ended								Six Months Ended
	Average Loans		Net (Charge-Offs) Recoveries			Net (Charge-Offs) Recoveries to Average Loans (1)			Average Loans		Net (Charge-Offs) Recoveries			Net (Charge-Offs) Recoveries to Average Loans (1)
	(dollars in thousands)								(dollars in thousands)
June 30, 2025
Commercial real estate loans	$	3,978,350	$	(8,422	)		(0.85	)%	$	3,958,335	$	(8,169	)		(0.41	)%
Residential loans		997,921		1			0.00			982,922		2			0.00
Commercial and industrial loans		818,498		(613	)		(0.30	)		808,069		(799	)		(0.20	)
Equipment financing agreements		462,972		(2,330	)		(2.01	)		474,499		(4,345	)		(1.83	)
Total	$	6,257,741	$	(11,364	)		(0.73	)%	$	6,223,825	$	(13,311	)		(0.43	)%
June 30, 2024
Commercial real estate loans	$	3,853,792	$	—			—	%	$	3,864,615	$	—			—	%
Residential loans		959,072		(29	)		(0.01	)		965,708		18			0.00
Commercial and industrial loans		730,929		73			0.04			723,967		(24	)		(0.01	)
Equipment financing agreements		545,647		(1,834	)		(1.34	)		559,374		(3,379	)		(1.21	)
Total	$	6,089,440	$	(1,790	)		(0.12	)%	$	6,113,664	$	(3,385	)		(0.11	)%

(1)Annualized

Deposits

The following table shows the composition of deposits by type as of the dates indicated:

	June 30, 2025					December 31, 2024
	Balance		Percent			Balance		Percent
	(dollars in thousands)
Demand – noninterest-bearing	$	2,105,369		31.3	%	$	2,096,634		32.6	%
Interest-bearing:
Demand		90,172		1.3			80,323		1.2
Money market and savings		2,092,847		31.2			1,933,535		30.0
Uninsured amount of time deposits more than $250,000:
Three months or less		264,868		3.9			225,015		3.5
Over three months through six months		218,328		3.2			219,304		3.4
Over six months through twelve months		262,060		3.9			202,966		3.2
Over twelve months		494		0.0			14		—
All other insured time deposits		1,694,984		25.2			1,677,985		26.1
Total deposits	$	6,729,122		100.0	%	$	6,435,776		100.0	%

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Total deposits were $6.73 billion and $6.44 billion as of June 30, 2025 and December 31, 2024, respectively, representing an increase of $293.3 million, or 4.6%. The increase in deposits was primarily driven by a $159.3 million increase in money market and savings deposits and a $115.5 million increase in time deposits as a result of new commercial accounts and branch openings during the first six months of 2025. At June 30, 2025, the loan-to-deposit ratio was 93.7% compared with 97.1% at December 31, 2024.

As of June 30, 2025, the aggregate amount of uninsured deposit accounts (deposits in amounts greater than $250,000, which is the maximum amount for federal deposit insurance) was $2.94 billion. For time deposits, the aggregate amount exceeding the insurance limit was $745.8 million. For demand money market and savings accounts, the aggregate amount exceeding the insurance limit was $2.19 billion. At June 30, 2025, $1.31 billion of total uninsured deposits were in accounts with balances of $5.0 million or more. As of December 31, 2024, the aggregate amount of uninsured deposits was $2.72 billion. The aggregate amount of uninsured time deposits was $647.3 million. For demand, money market and savings accounts, the aggregate amount of uninsured deposits was $2.07 billion. At December 31, 2024, $1.21 billion of total uninsured deposits were in accounts with balances of $5.0 million or more.

Borrowings and Subordinated Debentures

The Bank’s wholesale funds have historically consisted of FHLB advances, brokered deposits as well as State of California time deposits. As of June 30, 2025 and December 31, 2024, the Bank had $127.5 million and $262.5 million of FHLB advances, and $85.5 million and $60.7 million of brokered deposits, respectively. The Bank had $150.0 million and $120.0 million of State of California time deposits, as of June 30, 2025 and December 31, 2024, respectively.

Borrowings mostly take the form of FHLB advances. At June 30, 2025 and December 31, 2024, FHLB advances were $127.5 million and $262.5 million, respectively. FHLB open advances were $90.0 million and $225.0 million at June 30, 2025 and December 31, 2024, respectively. For the same periods, term advances were $37.5 million and $37.5 million, respectively. Funds from deposit growth not used to fund loan production were used to pay off borrowings.

The weighted-average interest rate of all FHLB advances at June 30, 2025 and December 31, 2024 was 4.62% and 4.75%, respectively.

The FHLB maximum amount outstanding at any month end during each of the year-to-date periods ended June 30, 2025 and December 31, 2024 was $152.5 million and $350.0 million, respectively.

The following is a summary of contractual maturities of FHLB advances greater than twelve months:

	June 30, 2025					December 31, 2024
FHLB of San Francisco	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Advances due over 12 months through 24 months	$	12,500		4.85	%	$	37,500		4.58	%
Outstanding advances over 12 months	$	12,500		4.85	%	$	37,500		4.58	%

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Subordinated debentures were $131.0 million and $130.6 million as of June 30, 2025 and December 31, 2024, respectively. Subordinated debentures are comprised of fixed-to-floating subordinated notes of $108.6 million and $108.5 million as of June 30, 2025 and December 31, 2024, respectively, and junior subordinated deferrable interest debentures of $22.3 million and $22.1 million as of June 30, 2025 and December 31, 2024, respectively. See “Note 8 – Borrowings and Subordinated Debentures” to the consolidated financial statements for more details.

Stockholders' Equity

Stockholders’ equity was $762.8 million and $732.2 million as of June 30, 2025 and December 31, 2024, respectively. Net income, net of $16.4 million of dividends paid, added $16.4 million to stockholders' equity for the period, as did $0.9 million of share-based compensation, a $15.9 million decrease in unrealized after-tax losses on securities available for sale and a $0.3 million decrease in unrealized after-tax losses on cash flow hedges due to changes in interest rates. In addition, the Company repurchased 120,000 shares of common stock during the period at an average share price of $22.94 for a total cost of $2.8 million. At June 30, 2025, 1,110,500 shares remain under the Company's share repurchase program.

Interest Rate Risk Management

The spread between interest income on interest-earning assets and interest expense on interest-bearing liabilities is the principal component of net interest income, and interest rate changes substantially affect our financial performance. We emphasize capital protection through stable earnings. In order to achieve stable earnings, we prudently manage our assets and liabilities and closely monitor the percentage changes in net interest income and equity value in relation to limits established within our guidelines.

The Company performs simulation modeling to estimate the potential effects of interest rate changes. The following table summarizes one of the stress simulations performed to forecast the impact of changing interest rates on net interest income and the value of interest-earning assets and interest-bearing liabilities reflected on our balance sheet (i.e., an instantaneous parallel shift in the yield curve of the magnitude indicated below) as of June 30, 2025. The Company compares this stress simulation to policy limits, which specify the maximum tolerance level for net interest income exposure over a 1- to 12-month and a 13- to 24- month horizon, given the basis point adjustment in interest rates reflected below.

	Net Interest Income Simulation
	1- to 12-Month Horizon						13- to 24-Month Horizon
Change in Interest	Dollar			Percentage			Dollar			Percentage
Rates (Basis Points)	Change			Change			Change			Change
	(dollars in thousands)
300	$	22,761			8.48	%	$	46,198			15.44	%
200	$	15,500			5.77	%	$	31,253			10.45	%
100	$	9,455			3.52	%	$	18,340			6.13	%
(100)	$	(9,298	)		(3.46	%)	$	(19,331	)		(6.46	%)
(200)	$	(18,377	)		(6.84	%)	$	(40,210	)		(13.44	%)
(300)	$	(24,592	)		(9.16	%)	$	(59,708	)		(19.96	%)

	Economic Value of Equity (EVE)
Change in Interest	Dollar			Percentage
Rates (Basis Points)	Change			Change
	(dollars in thousands)
300	$	70,160			8.31	%
200	$	55,651			6.59	%
100	$	41,513			4.91	%
(100)	$	(53,182	)		(6.30	%)
(200)	$	(124,160	)		(14.70	%)
(300)	$	(205,910	)		(24.38	%)

The estimated sensitivity does not necessarily represent our forecast, and the results may not be indicative of actual changes to our net interest income. These estimates are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans receivable and securities, pricing strategies on loans receivable and deposits, and replacement of asset and liability cash flows.

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The key assumptions, based upon loans receivable, securities and deposits, are as follows:

Conditional prepayment rates*:
Loans receivable	10	%
Securities	6	%
Deposit rate betas*:
NOW, savings, money market demand	48	%
Time deposits, retail and wholesale	76	%
* Balance-weighted average

While the assumptions used are based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.

Capital Resources and Liquidity

Capital Resources

Historically, our primary source of capital has been the retention of operating earnings. In order to ensure adequate capital levels, the Board regularly assesses projected sources and uses of capital, expected loan growth, anticipated capital management tools (such as stock repurchases and dividends), and projected capital thresholds under adverse and severely adverse economic conditions. In addition, the Board considers the Company’s access to capital from financial markets through the issuance of additional debt and securities, including common stock or notes, to meet its capital needs.

The Company’s ability to pay dividends to stockholders depends in part upon dividends it receives from the Bank. California law restricts the amount available for cash dividends to the lesser of a bank’s retained earnings or net income for its last three fiscal years (less any distributions to stockholders made during such period). Where the above test is not met, cash dividends may still be paid, with the prior approval of the California Department of Financial Protection and Innovation (“DFPI”), in an amount not exceeding the greater of: (1) retained earnings of the Bank; (2) net income of the Bank for its last fiscal year; or (3) the net income of the Bank for its current fiscal year. The Company paid dividends of $16.4 million ($0.54 per share) for the six months ended June 30, 2025 and $30.4 million ($1.00 per share) for the year 2024. As of July 1, 2025, the Bank has the ability to pay dividends of approximately $83.1 million, after giving effect to the $0.27 dividend declared on July 24, 2025, for the third quarter of 2025, without the prior approval of the Commissioner of the DFPI.

At June 30, 2025, the Bank’s total risk-based capital ratio of 14.39%, Tier 1 risk-based capital ratio of 13.32%, common equity Tier 1 capital ratio of 13.32% and Tier 1 leverage capital ratio of 11.43% placed the Bank in the “well capitalized” category pursuant to capital rules, which is defined as institutions with total risk-based capital ratio equal to or greater than 10.00%, Tier 1 risk-based capital ratio equal to or greater than 8.00%, common equity Tier 1 capital ratios equal to or greater than 6.50%, and Tier 1 leverage capital ratio equal to or greater than 5.00%.

At June 30, 2025, the Company's total risk-based capital ratio was 15.20%, Tier 1 risk-based capital ratio was 12.46%, common equity Tier 1 capital ratio was 12.12% and Tier 1 leverage capital ratio was 10.63%.

For a discussion of the applicable capital adequacy framework, see "Regulation and Supervision - Capital Adequacy Requirements" in our 2024 Annual Report on Form 10-K.

Liquidity

For a discussion of liquidity for the Company, see Note 14 - Liquidity included in the notes to unaudited consolidated financial statements in this Report and Note 22 – Liquidity in our 2024 Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

For a discussion of off-balance sheet arrangements, see Note 12 - Off-Balance Sheet Commitments included in the notes to unaudited consolidated financial statements in this Report and “Item 1. Business - Off-Balance Sheet Commitments” in our 2024 Annual Report on Form 10-K.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures regarding market risks, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk Management” in this Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management is responsible for the disclosure controls and procedures of the Corporation. Disclosure controls and procedures are controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods required by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Corporation’s management, including the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures. Based on that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in the Corporation's internal control over financial reporting (as defined in Rule 13a-15(f)) during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

From time to time, Hanmi Financial and its subsidiaries are parties to litigation that arises in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the business of Hanmi Financial and its subsidiaries. In the opinion of management, the resolution of any such issues would not have a material adverse impact on the financial condition, results of operations, or liquidity of Hanmi Financial or its subsidiaries.

Item 1A. Risk Factors

There have been no material changes in risk factors applicable to the Corporation from those described in “Risk Factors” in Part I, Item 1A of the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

In addition to the other information contained in this Quarterly Report on Form 10-Q, the following risk factor represents a material update and addition to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Tariffs imposed on South Korea could have an impact on our business. On July 31, 2025, President Trump announced that an agreement has been reached with South Korea whereby a 15% tariff will be imposed on goods imported by South Korea into the U.S. and South Korea will make investments in certain U.S. industries. The final details of this trade agreement, including the timing of its implementation, remain unclear and may be subject to further negotiation. Any tariffs or required investments in U.S. industries imposed on South Korea may have an impact on South Korean businesses and the South Korean economy, which may negatively impact our customers with ties to South Korea, including U.S. subsidiaries of South Korean companies. While the impact of any final trade agreement with South Korea is uncertain, it may have an impact on the demand and performance of loans related to our customers with South Korean ties which, in turn, could have an effect on our financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

On April 25, 2024, the Company announced that the Board of Directors has adopted a stock repurchase program under which the Company may repurchase up to 5% of its outstanding shares, or approximately 1.5 million shares of its common stock. As of June 30, 2025, 1,110,500 shares remained available for future purchases under that stock repurchase program. The program has no scheduled expiration date and the Board of Directors has the right to suspend or discontinue the program at any time.

The following table represents information with respect to repurchases of common stock made by the Company during the three months ended June 30, 2025:

Purchase Date:	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Maximum Shares That May Yet Be Purchased Under the Program
April 1, 2025 - April 30, 2025	$	22.77		5,000		1,175,500
May 1, 2025 - May 31, 2025		23.40		52,500		1,123,000
June 1, 2025 - June 30, 2025	$	22.88		12,500		1,110,500
Total	$	23.26		70,000		1,110,500

The Company acquired 15,953 shares from employees in connection with the satisfaction of employee tax withholding obligations incurred through the vesting of Company stock awards during the three months ended June 30, 2025. Shares withheld to pay income taxes upon the vesting of stock awards are repurchased pursuant to the terms of the applicable plan and not under the Company's repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2025, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Hanmi securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6. Exhibits

Exhibit Number	Document
3.1	Amendment to Amended and Restated Certificate of Incorporation of Hanmi Financial Corporation, dated May 28, 2025.
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document *
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents *
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL

* Attached as Exhibit 101 to this report are documents formatted in Inline XBRL (Extensible Business Reporting Language).

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Signatures

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

		Hanmi Financial Corporation
Date:	August 8, 2025	By:	/s/ Bonita I. Lee
			Bonita I. Lee
			President and Chief Executive Officer (Principal Executive Officer)

Date:	August 8, 2025	By:	/s/ Romolo C. Santarosa
			Romolo C. Santarosa
			Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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