Business
River City Bank Reports Net Income of $19.6 Million for the Second Quarter of 2026 and a Quarterly Cash Dividend
River City Bank Reports Net Income of $19.6 Million for the Second Quarter of 2026 and a Quarterly Cash
About this update from River City Bank
River City Bank ("the Bank") reported net income of $19.6 million or $1.37 per share for the quarter ended June 30, 2026, which compares to $15.4 million, or $1.05 per share, for the same period in 2025. Net income was $37.6 million or $2.60 per share for the six months ended June 30, 2026, which compares to $27.7 million, or $1.89 per share, for the six months ended June 30, 2025. The Bank’s earnings for the quarter ended June 30, 2026 resulted in a 13.92% return on average equity and a 1.28% return on average assets. The Bank’s book value per share rose to $40.58 as of June 30, 2026 from $35.61 per share as of June 30, 2025, an increase of 14%. Second Quarter Highlights Performance and operating highlights for the Bank for the periods noted below included the following: For the Three Months Ended June 30, 2026 March 31, 2026 June 30, 2025 ($ in thousands, except per share data) Return on average assets ("ROAA") 1.28 % 1.22 % 1.16 % Return on average equity ("ROAE") 13.92 % 13.07 % 12.22 % Efficiency ratio 29.44 % 32.10 % 33.50 % Core pre-credit provision, pre-tax income (1) $ 25,433 $ 24,599 $ 25,673 Net income $ 19,616 $ 17,946 $ 15,411 Earnings per share $ 1.37 $ 1.24 $ 1.05 Book value per share $ 40.58 $ 39.37 $ 35.61 Weighted average shares outstanding 14,341,273 14,517,560 14,647,651 Common shares outstanding at end of period 13,994,875 14,323,381 14,322,040 (1) See the section entitled “Non-GAAP Reconciliation” for a reconciliation of this non-GAAP financial measure. “The Bank continues to perform at a high level, as reflected in the metrics of growth in book value per share, return on average equity, return on average assets, and operating efficiency,” said Steve Fleming, President and Chief Executive Officer. “The Bank delivered strong operating results in the second quarter of 2026, as evidenced by the earnings per share of $1.37 and continued compounding of book value per share. In addition, credit quality remains pristine as we have not suffered any material losses on loans originated since the current management team took over in 2008. Maintaining our best-in-class operating efficiency and credit culture are integral to our business model." “Operational efficiency remains a core competency for the Bank, as evidenced by our second quarter 2026 efficiency ratio of 29%,” said Brian Killeen, Chief Financial Officer of River City Bank. “We view this operational efficiency as a competitive advantage, contributing to sustained profitability and growth in shareholder value. In addition, the Bank continues to maintain high levels of liquidity with $1.4 billion of cash and investments combined with $2.2 billion in available borrowing capacity as of June 30, 2026. The Bank’s high quality, short duration investment securities portfolio continues to perform well with a very low unrealized loss position of 0.8% as of June 30, 2026.” Financial Highlights Financial highlights as of and during the three and six months ended June 30, 2026 compared to the same periods in the prior year included the following: Interest-earning asset growth – Total loans increased by $64 million during the quarter ended June 30, 2026. Average loans outstanding for the quarter ended June 30, 2026 increased by $326 million (7.5% growth) compared to the prior-year quarter, and for the first half of 2026 increased by $312 million (7.3% growth) compared to the same period in 2025. Average cash balances and investment securities increased $440 million for the second quarter in 2026 and $409 million for the first half of 2026, compared to the respective prior year periods. This growth in interest-earning assets led to interest income growth for both periods. Deposit growth – The Bank continues to see strong deposit growth. Average deposits for the second quarter of 2026 increased by $731 million (15.5% growth) compared to the same period in the prior year and by $702 million (15.0% growth) for the first half of 2026 compared to the same period in 2025, supporting the Bank’s loan and interest-earning asset growth. Share repurchases – During the quarter ended June 30, 2026, the Bank repurchased $13 million of common stock with an average share price of $41.03, slightly above book value, which should be a significant long-term advantage for the Bank’s shareholders and demonstrates the Bank’s commitment to shareholder value. The Bank recognized a $3.2 million increase to noninterest income during the second quarter of 2026 compared to a $4.0 million reduction in noninterest income in the second quarter of the prior year related to undesignated interest rate swaps that have yet to be designated into a hedging relationship. The Bank regularly enters interest rate swaps to mitigate interest rate risk and all swaps are entered into for this purpose (regardless of accounting treatment). Approximately 17% of the Bank’s interest rate swaps are undesignated as of June 30, 2026, and until these interest rate swaps are designated as a hedge to specific assets or liabilities, the mark-to-market ("MTM") fluctuations (positive and negative) will flow through the income statement. Given the hedging purpose of the swaps, Bank management does not view the MTM gains and losses, which are recognized for accounting purposes as economic gains and losses. As of June 30, 2026, the Bank had zero non-performing loans, virtually no delinquent loans (0.03% of total loans), no loans more than 90 days past due and still accruing interest, and the Bank’s Allowance for Credit Losses for Loans ("ACL") was 2.30% of total loans. The Bank recorded a $1.5 million provision for credit losses (loans and unfunded commitments) for the three months ended June 30, 2026 and $3.0 million for the six months ended June 30, 2026. The Bank's efficiency ratio continued to be exceptionally low by industry standards at 29.4% and 33.5% for the three months ended June 30, 2026 and June 30, 2025, reflecting a highly productive team of employees and sustained cost discipline which is consistent with the Bank's commitment to being a low-cost producer. Net interest margin ("NIM") – The Bank’s NIM was 2.34% and 2.59% for the three months ended June 30, 2026 and June 30, 2025. This is due to a 38 basis point decrease in the yield on average earning assets while the cost of funds only decreased by 16 basis points during the same period. Summary Results Three months ended June 30, 2026, as compared to three months ended June 30, 2025 For the Three Months Ended Variance June 30, 2026 June 30, 2025 $ % ($ in thousands, except per share data) Interest income $ 73,544 $ 69,327 $ 4,217 6.1 % Interest expense 38,007 34,988 3,019 8.6 % Net interest income 35,537 34,339 1,198 3.5 % Provision for credit losses 1,518 — 1,518 100.0 % Net interest income after provision for credit losses 34,019 34,339 (320) (0.9 )% Net changes in the fair value of derivatives 3,178 (4,009 ) 7,187 NM Noninterest income 1,833 2,247 (414 ) (18.4 )% Noninterest expense 11,937 10,913 1,024 9.4 % Income before taxes 27,093 21,664 5,429 25.1 % Provision for income taxes 7,477 6,253 1,224 19.6 % Net income $ 19,616 $ 15,411 $ 4,205 27.3 % Earnings per share $ 1.37 $ 1.05 $ 0.32 30.5 % ROAA 1.28 % 1.16 % 0.12 % 10.3 % ROAE 13.92 % 12.22 % 1.70 % 13.9 % Efficiency ratio 29.44 % 33.50 % (4.06 )% (12.1 )% The Bank’s net income was $19.6 million for the three months ended June 30, 2026, as compared to $15.4 million for the three months ended June 30, 2025. The primary items of note are as follows: Interest income increased by $4.2 million, primarily due to an increase in average balances of loans, investment securities and cash balances. Interest expense increased by $3.0 million due to significant growth in the average balance of interest-bearing deposits, partially offset by a 31 basis point decrease in the cost of interest-bearing deposits as compared to the same quarter in the prior year. The MTM adjustment associated with interest rate swaps yet to be designated into a hedge relationship increased by $7.2 million to a $3.2 million MTM gain compared to $4.0 million MTM loss in the same quarter of the prior year. Noninterest expense increased by $1.0 million over the prior year quarter, primarily due to increases in compensation expenses as the Bank continues to build out its team to support its growth. In addition, during the second quarter of 2026, the Bank donated $215,000 of Visa Class A shares to the Kelly Foundation, one of the largest charitable foundations based in Sacramento. These shares were received as part of a tender offer which Visa completed in May 2026. Three months ended June 30, 2026, as compared to three months ended March 31, 2026 For the Three Months Ended Variance June 30, 2026 March 31, 2026 $ % ($ in thousands, except per share data) Interest income $ 73,544 $ 71,961 $ 1,583 2.2 % Interest expense 38,007 36,946 1,061 2.9 % Net interest income 35,537 35,015 522 1.5 % Provision for credit losses 1,518 1,512 6 0.4 % Net interest income after provision for credit losses 34,019 33,503 516 1.5 % Net changes in the fair value of derivatives 3,178 1,729 1,449 83.8 % Noninterest income 1,833 2,028 (195 ) (9.6 )% Noninterest expense 11,937 12,444 (507 ) (4.1 )% Income before taxes 27,093 24,816 2,277 9.2 % Provision for income taxes 7,477 6,870 607 8.8 % Net income $ 19,616 $ 17,946 $ 1,670 9.3 % Earnings per share $ 1.37 $ 1.24 0.13 10.5 % ROAA 1.28 % 1.22 % 0.06 % 4.9 % ROAE 13.92 % 13.07 % 0.85 % 6.5 % Efficiency ratio 29.44 % 32.10 % (2.66 )% (8.3 )% The Bank’s net income was $19.6 million for the three months ended June 30, 2026, as compared to $17.9 million for the three months ended March 31, 2026. The primary items of note are as follows: Interest income increased by $1.6 million, primarily due to a $50 million increase in average balances of loans and an $87 million increase in average balances of cash and investment securities. Interest expense increased by $1.1 million due to $122 million growth in average deposit balances, as compared to the prior quarter, slightly offset by a 7 basis point decrease in the cost of interest-bearing deposits. Noninterest expense decreased by $507,000, primarily reflecting a decline in compensation expense compared to the prior quarter. Six months ended June 30, 2026, as compared to six months ended June 30, 2025 For the Six Months Ended Variance June 30, 2026 June 30, 2025 $ % ($ in thousands, except per share data) Interest income $ 145,506 $ 136,548 $ 8,958 6.6 % Interest expense 74,954 69,823 5,131 7.3 % Net interest income 70,552 66,725 3,827 5.7 % Provision for (reversal of) credit losses 3,030 (124 ) 3,154 NM Net interest income after provision for (reversal of) credit losses 67,522 66,849 673 1.0 % Net changes in the fair value of derivatives 4,907 (10,445 ) 15,352 NM Noninterest income 3,861 4,526 (665 ) (14.7 )% Noninterest expense 24,381 21,922 2,459 11.2 % Income before taxes 51,909 39,008 12,901 33.1 % Provision for income taxes 14,347 11,291 3,056 27.1 % Net income $ 37,562 $ 27,717 $ 9,845 35.5 % Earnings per share $ 2.60 $ 1.89 $ 0.71 37.6 % ROAA 1.25 % 1.05 % 0.20 % 19.0 % ROAE 13.50 % 11.19 % 2.31 % 20.6 % Efficiency ratio 30.74 % 36.05 % (5.31 )% (14.7 )% The Bank’s net income was $37.6 million for the six months ended June 30, 2026, as compared to $27.7 million for the six months ended June 30, 2025. The primary items of note are as follows: Interest income increased by $9.0 million, primarily due to a $313 million increase in average balances of loans and a $409 million increase in average cash balances and investment securities. Interest expense increased by $5.1 million due to significant growth in the average balance of deposits, partially offset by a 17 basis point decrease in the cost of funds between the two periods. The MTM adjustment associated with interest rate swaps yet to be designated into a hedge relationship increased by $15.4 million to a $4.9 million MTM gain compared to $10.4 million MTM loss in the same period of the prior year. Noninterest expense increased by $2.5 million over the prior year period, primarily due to a $1.2 million increase in compensation expense as the Bank continues to build out its team to support growth. The increase also reflects higher operating expenses associated with the Bank’s strategic initiatives. Balance Sheet Summary Year over Year Balance Sheet Change As of June 30, Variance 2026 2025 $ % ($ in thousands) Total assets $ 6,042,514 $ 5,322,651 $ 719,863 13.5 % Total loans 4,678,130 4,351,223 326,907 7.5 % Total investments 1,003,538 707,827 295,711 41.8 % Total deposits 5,374,670 4,521,132 853,538 18.9 % Total shareholders' equity 567,881 510,018 57,863 11.3 % Loans outstanding increased by $327 million or 7.5% as of June 30, 2026 compared to June 30, 2025. The growth was primarily in Commercial Real Estate loans that grew $293 million from June 30, 2025. Deposit balances increased by $854 million from June 30, 2025 to June 30, 2026, due primarily to significant growth in Commercial and Clean Energy client relationships. Shareholders’ equity increased $58 million to $568 million as of June 30, 2026 when compared to $510 million as of June 30, 2025. The increase was driven primarily by growth in retained earnings, as the Bank continues to maintain a relatively low dividend payout ratio, albeit partly mitigated by $17 million in share repurchases over the period. Trailing Quarter Balance Sheet Change As of Variance June 30, 2026 March 31, 2026 $ % ($ in thousands) Total assets $ 6,042,514 $ 6,047,747 $ (5,233) (0.1 )% Total loans 4,678,130 4,614,166 63,964 1.4 % Total investments 1,003,538 735,971 267,567 36.4 % Total deposits 5,374,670 5,386,542 (11,872) (0.2 )% Total shareholders' equity 567,881 563,858 4,023 0.7 % Total loans increased slightly by $64 million during the quarter ended June 30, 2026. Loan originations totaled approximately $174 million for the quarter ended June 30, 2026. Deposit balances decreased slightly by $12 million during the quarter ended June 30, 2026, reflecting stable deposit levels within the Bank's existing client base. As of June 30, 2026, the Bank had no wholesale funding. Shareholders’ equity increased $4 million to $568 million as of June 30, 2026 when compared to $564 million as of March 31, 2026. The increase was driven primarily by the current year retained earnings, less $13 million of share repurchases during the quarter ended June 30, 2026. The Bank’s capital ratios remain healthy and well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 9.22% and a Total Risk-Based Capital Ratio of 14.44% as of June 30, 2026. Asset Quality Ratios June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 ACL/Total loans 2.30 % 2.29 % 2.24 % 2.27 % 2.33 % Delinquent loans/Total loans 0.03 % 0.02 % 0.02 % 0.00 % 0.00 % Non-performing loans/Total loans 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Year-to-date net charge-off ratio 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % As of June 30, 2026, the Bank had no other real estate owned or non-performing loans and there were no charge-offs during the quarter. The Bank’s allowance for credit losses was $108 million as of June 30, 2026, as compared to $104 million as of December 31, 2025. Provision for Income Taxes The Bank’s effective tax rate was 27.6% and 28.9% for the six months ended June 30, 2026 and 2025, respectively. Differences between the Bank’s effective tax rate and applicable federal and state (primarily California) blended statutory rate of approximately 29.4% are primarily due to the proportion of excess benefit from restricted share instruments vesting, the benefits of tax credits, and changes in the Bank’s apportionment of taxable income in certain states. Dividend Announcement Mr. Fleming announced that the Bank’s board of directors has approved a cash dividend of $0.05 per common share to shareholders of record as of August 3, 2026, and payable on August 17, 2026. ABOUT RIVER CITY BANK: As a leading boutique commercial bank with assets over $6.0 billion, River City Bank is the largest, independent, locally owned and managed bank in the Sacramento region, with an office in San Francisco and a focus on the Western United States. River City Bank offers a comprehensive suite of banking services with a tailored, concierge-like level of service, to redefine the banking experience. Please visit http://www.rivercitybank.com or call (916) 567-2600. Member FDIC. Equal Housing Lender. FORWARD-LOOKING STATEMENTS The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. The financial results reported in this document are preliminary and unaudited. Condensed Financial Data (Unaudited) Income Statement Data For the Three Months Ended For the Six Months Ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 ($ in thousands) Interest income $ 73,544 $ 71,961 $ 69,327 $ 145,506 $ 136,548 Interest expense 38,007 36,946 34,988 74,954 69,823 Net interest income 35,537 35,015 34,339 70,552 66,725 Provision for (reversal of) credit losses 1,518 1,512 — 3,030 (124 ) Net interest income after provision for (reversal of) credit losses 34,019 33,503 34,339 67,522 66,849 Service charges on deposit accounts 215 202 199 417 388 Check card revenue 164 157 175 321 354 Net payments received on undesignated derivatives 909 935 1,372 1,844 2,693 Net changes in the fair value of derivatives 3,178 1,729 (4,009 ) 4,907 (10,445 ) Real estate lease income 162 162 67 323 131 FHLB dividends 187 760 324 947 654 Loss on investment securities, net (42) (441) (91) (483) (91) Other noninterest income 238 253 201 492 397 Total noninterest income 5,011 3,757 (1,762 ) 8,768 (5,919 ) Salaries and employee benefits 7,646 8,258 7,243 15,904 14,671 Occupancy and equipment 594 638 632 1,234 1,226 Data processing 983 921 920 1,904 1,794 Federal deposit insurance 720 675 600 1,395 1,250 Other noninterest expense 1,994 1,952 1,518 3,944 2,981 Total noninterest expense 11,937 12,444 10,913 24,381 21,922 Income before taxes 27,093 24,816 21,664 51,909 39,008 Provision for income taxes 7,477 6,870 6,253 14,347 11,291 Net income $ 19,616 $ 17,946 $ 15,411 $ 37,562 $ 27,717 Net Interest Income and Net Interest Margin For the Three Months Ended June 30, 2026 March 31, 2026 June 30, 2025 Average Balance Interest & Fees Yield/ Rate Average Balance Interest & Fees Yield/ Rate Average Balance Interest & Fees Yield/ Rate Interest-earning assets (tax-equivalent basis, $ in thousands) Interest-earning deposits in banks $ 512,960 $ 4,747 3.71 % $ 670,552 $ 6,017 3.64 % $ 315,248 $ 3,332 4.24 % Investment securities (TE) 936,585 8,723 3.74 % 691,581 6,608 3.88 % 694,549 7,091 4.10 % Loans 4,643,971 60,082 5.19 % 4,593,636 59,342 5.24 % 4,318,463 58,911 5.47 % Total interest-earning assets 6,093,516 73,552 4.84 % 5,955,769 71,967 4.90 % 5,328,260 69,334 5.22 % Total noninterest-earning assets 33,786 21,964 19,308 Total average assets $ 6,127,302 $ 5,977,733 5,347,568 Interest-bearing liabilities Interest-bearing transaction accounts 2,460,332 20,460 3.34 % 2,321,935 19,351 3.38 % 1,912,085 17,210 3.61 % Money market accounts 1,438,964 11,586 3.23 % 1,330,101 10,776 3.29 % 944,331 7,822 3.32 % Savings deposits 85,313 103 0.48 % 88,718 107 0.49 % 97,355 119 0.49 % Time deposits 603,903 5,572 3.70 % 692,286 6,563 3.84 % 877,579 9,321 4.26 % Interest-bearing deposits 4,588,512 37,721 3.30 % 4,433,040 36,797 3.37 % 3,831,350 34,472 3.61 % Borrowings 6 — 0.00 % 278 3 4.38 % 4,410 50 4.55 % Other interest-bearing liabilities 81,171 286 1.41 % 61,020 146 0.97 % 87,162 465 2.14 % Total interest-bearing liabilities $ 4,669,689 $ 38,007 3.26 % $ 4,494,338 $ 36,946 3.33 % $ 3,922,922 $ 34,987 3.58 % Noninterest-bearing liabilities Noninterest-bearing deposits 869,041 902,202 895,336 Other noninterest-bearing liabilities 23,466 24,253 23,477 Total noninterest-bearing liabilities 892,507 926,455 918,813 Total average liabilities 5,562,196 5,420,793 4,841,735 Shareholders' equity 565,106 556,940 505,833 Total liabilities and shareholders' equity $ 6,127,302 $ 5,977,733 $ 5,347,568 Net interest income $ 35,545 $ 35,021 $ 34,347 NIM 2.34 % 2.38 % 2.59 % Cost of funds $ 5,538,730 $ 38,007 2.75 % $ 5,396,540 $ 36,946 2.78 % $ 4,818,258 $ 34,987 2.91 % Cost of deposits $ 5,457,553 $ 37,721 2.77 % $ 5,335,242 $ 36,797 2.80 % $ 4,726,686 $ 34,472 2.93 % For the Six Months Ended June 30, 2026 June 30, 2025 Average Balance Interest & Fees Yield/ Rate Average Balance Interest & Fees Yield/ Rate (tax-equivalent basis, $ in thousands) Interest-earning assets Interest-earning deposits in banks $ 591,321 $ 10,764 3.67 % $ 302,627 $ 6,332 4.22 % Investment securities (TE) 814,760 15,331 3.79 % 694,615 14,406 4.18 % Loans 4,618,942 119,424 5.21 % 4,306,444 115,826 5.42 % Total interest-earning assets 6,025,023 145,519 4.87 % 5,303,686 136,564 5.19 % Total noninterest-earning assets 27,910 21,726 Total average assets $ 6,052,933 $ 5,325,412 Interest-bearing liabilities Interest-bearing transaction accounts 2,391,516 39,811 3.36 % 1,866,069 33,600 3.63 % Money market accounts 1,384,833 22,363 3.26 % 966,265 16,038 3.35 % Savings deposits 87,006 210 0.49 % 98,668 244 0.50 % Time deposits 647,850 12,134 3.78 % 862,118 18,608 4.35 % Interest-bearing deposits 4,511,205 74,518 3.33 % 3,793,120 68,490 3.64 % Borrowings 141 3 4.29 % 2,493 56 4.53 % Other interest-bearing liabilities 71,151 432 1.22 % 103,569 1,277 2.49 % Total interest-bearing liabilities $ 4,582,497 $ 74,953 3.30 % $ 3,899,182 $ 69,823 3.61 % Noninterest-bearing liabilities Noninterest-bearing deposits 885,530 901,931 Other noninterest-bearing liabilities 23,860 24,751 Total noninterest-bearing liabilities 909,390 926,682 Total average liabilities 5,491,887 4,825,864 Shareholders' Equity 561,045 499,548 Total liabilities and shareholders' equity $ 6,052,932 $ 5,325,412 Net interest income $ 70,566 $ 66,741 NIM 2.36 % 2.54 % Cost of funds $ 5,468,027 $ 74,953 2.76 % $ 4,801,113 $ 69,823 2.93 % Cost of deposits $ 5,396,735 $ 74,518 2.78 % $ 4,695,051 $ 68,490 2.94 % Balance Sheet Data Assets June 30, 2026 March 31, 2026 June 30, 2025 ($ in thousands) Cash and due from financial institutions $ 353,369 $ 689,524 $ 255,984 Investment securities 1,003,538 735,971 707,827 Loans by type: Commercial real estate - owner occupied 161,637 161,440 156,005 Commercial real estate - non-owner occupied 4,060,364 4,038,861 3,773,399 Construction and land development 41,763 19,952 12,035 Residential real estate 191,404 192,232 193,980 Commercial and industrial 154,676 145,990 161,815 Consumer 9,089 8,786 8,363 Agricultural 59,197 46,905 45,626 Total gross loans 4,678,130 4,614,166 4,351,223 Less: Net deferred loan fees & hedged loan MTM (69,389 ) (56,687 ) (56,600 ) Less: Allowance for credit losses - loans (107,826 ) (105,471 ) (101,415 ) Net loans 4,500,915 4,452,008 4,193,208 Accrued interest receivable 22,815 25,106 22,506 Premise and equipment, net 10,712 10,632 10,343 Deferred tax assets, net 28,791 27,907 25,656 Derivatives 84,278 68,849 68,502 Other assets 38,096 37,750 38,625 Total assets $ 6,042,514 $ 6,047,747 $ 5,322,651 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand deposits $ 825,271 $ 845,209 $ 815,993 Money market accounts 1,416,955 1,449,930 898,173 Interest-bearing transaction accounts 2,428,866 2,379,298 1,836,416 Savings deposits 84,606 86,611 95,383 Time deposits 618,972 625,494 875,167 Total deposits 5,374,670 5,386,542 4,521,132 Accrued interest payable 2,952 3,885 6,010 Other borrowings — — 200,000 Cash collateral held related to derivatives 81,970 72,500 73,130 Other liabilities 15,041 20,962 12,361 Total liabilities 5,474,633 5,483,889 4,812,633 Shareholders' equity 567,881 563,858 510,018 Total liabilities and shareholders' equity $ 6,042,514 $ 6,047,747 $ 5,322,651 Capital Ratios June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 Tier 1 leverage ratio 9.22 % 9.35 % 9.40 % 9.54 % 9.42 % Common equity tier 1 capital ratio 13.18 % 13.14 % 12.75 % 12.58 % 12.45 % Tier 1 risk-based capital ratio 13.18 % 13.14 % 12.75 % 12.58 % 12.45 % Total risk-based capital ratio 14.44 % 14.41 % 14.02 % 13.85 % 13.71 % Non-GAAP Reconciliation In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains a non-GAAP financial measure. Management has presented this non-GAAP financial measure in this press release because it believes that it provides useful and comparative information to assess trends in the Bank's core operations. However, the non-GAAP financial measure is supplemental and is not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of the non-GAAP financial measure, see the table below: Core Pre-Credit Provision, Pre-Tax Income This figure is defined as net interest income, plus noninterest income, less the change in fair value of derivatives, less noninterest expense. The purpose of this non-GAAP financial measure is to remove the market volatility that can be included in the change in the fair value of derivatives that do not have fair value hedge accounting treatment (undesignated), which is a component of noninterest income. We hedge our interest rate risk through interest rate derivatives and a portion of the gain/loss on derivatives is reflected in our income statement. In addition, this measure is shown before the provision for credit losses and income tax expense. We believe that this non-GAAP financial measure provides a clearer picture of our operational earnings. For the Three Months Ended June 30, 2026 March 31, 2026 June 30, 2025 ($ in thousands) Net interest income $ 35,537 $ 35,015 $ 34,339 Noninterest income 5,011 3,757 (1,762 ) Non-core item: Less change in the fair value of undesignated derivatives 3,178 1,729 (4,009 ) Core noninterest income 1,833 2,028 2,247 Less noninterest expense 11,937 12,444 10,913 Core pre-credit provision, pre-tax income $ 25,433 $ 24,599 $ 25,673 View source version on businesswire.com: https://www.businesswire.com/news/home/20260722979484/en/