Sierra Bancorp Reports Financial Results for Third Quarter and First Nine Months of 2025

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10/27/2025 - 08:01 AM

PORTERVILLE, Calif.--(BUSINESS WIRE)-- Sierra Bancorp (Nasdaq: BSRR), parent of Bank of the Sierra, today announced its unaudited financial results for the three- and nine-month periods ended September 30, 2025. Sierra Bancorp reported consolidated net income of $9.7 million, or $0.72 per diluted share, for the third quarter of 2025, a decrease of $0.9 million, or 9%, as compared to the second quarter of 2025. In addition, the Company reported consolidated net income of $29.4 million for the first nine months of 2025, a decrease of $0.8 million, or 3%, as compared to the same period in 2024. Diluted earnings per share for the nine-month period ended September 30, 2025, increased to $2.15 from $2.09 for the same period in 2024, an increase of 3%, due mostly to continued stock repurchases through 2025.

Highlights for the third quarter of 2025:

Improved Net Interest Income and Efficiency
- Net interest margin increased to 3.78%, as compared to 3.68% in the prior linked quarter.
- Net interest income grew by $1.3 million, or 4%, as compared to the prior linked quarter.
- Loan yield improved to 5.36%, as compared to 5.27% in the prior linked quarter.
- Maintained low cost of funds at 1.45%, a decrease of four basis points from the prior linked quarter.
- Improved efficiency ratio to 58.0%, as compared to 59.4% in the prior linked quarter.

Solid Asset Quality
- Total nonperforming loans to total gross loans ratio improved to 0.56%, as compared to 0.62% in the prior linked quarter.
- Loans past due 30-89 days and still accruing fell to $0.2 million, or one basis point of total loans, an improvement of $2.8 million, or 94.8%, as compared to the prior linked quarter.
- Total Classified Loans declined $3.6 million, or 10%, during the quarter.
- Regulatory Commercial Real Estate Concentration Ratio declined slightly to 242.7% during the quarter.

Balance Sheet Growth
- Gross loans increased $57.2 million, or 9% annualized, to $2.5 billion.
- Customer deposits increased by $13.3 million, or 2% annualized, to $2.7 billion.
- Total deposits declined during the quarter by $41.7 million primarily due to a proactive $55 million reduction in higher-cost brokered deposits.
- Overall deposits have increased $41.1 million, or 2%, annualized, despite a $40 million decline in higher-cost brokered deposits over the same period.
- Noninterest-bearing deposits increased slightly to $1.1 billion at September 30, 2025, and represents 37% of total deposits.

Strong Capital and Liquidity
- Increased tangible book value (non-GAAP) per share by 3% during the quarter, to $24.66 per share.
- Repurchased 190,342 shares of common stock during the quarter at an average price of $30.55.
- Declared dividend of $0.25 per share, payable on November 14, 2025, our 107^th consecutive quarterly dividend.
- Regulatory Leverage Ratio of 11.73% at September 30, 2025, for our subsidiary Bank.
- Consolidated Tangible Common Equity Ratio (non-GAAP) increased to 9.03%, at September 30, 2025.
- Overall primary and secondary liquidity sources of $2.2 billion, at September 30, 2025.

“Success is the sum of small efforts, repeated day in and day out.” – Robert Collier

“Through the first three quarters of 2025, we have taken advantage of several opportunities and risen to meet many challenges,” noted Kevin McPhaill, President and Chief Executive Officer. “Our loan portfolio and strong customer base have continued to grow, despite a difficult interest rate environment, certain episodic credit issues, persisting inflation concerns, and an uncertain employment outlook. For the first nine months of 2025, we increased earnings per share over the same period in 2024 while improving both margin and efficiency. We also continue to have a high level of noninterest income relative to peers. I am immensely proud of our team and their commitment to consistent and strong earnings. As we move into the final quarter of 2025, we are excited about the remainder of the year and believe our team and our balance sheet give us reasons to look forward to 2026 and beyond!”

For the first nine months of 2025, the Company recorded net income of $29.4 million, or $2.15 earnings per diluted share, as compared to $30.2 million, or $2.09 earnings per diluted share, for the same period in 2024. The increase in diluted earnings per share is due mostly to the repurchase of 802,753 shares during the past nine months. The year-over-year decrease in net income was due primarily to a provision for credit losses of $7.0 million, an increase of $4.6 million compared to the prior year-to-date period, and a $0.8 million decrease in noninterest income. These unfavorable variances were partially offset by an increase of $3.1 million in net interest income and a $0.2 million decrease in noninterest expense. The Company’s financial performance metrics for the first nine months of 2025 include an annualized return on average assets and a return on average equity of 1.07% and 11.11%, respectively, compared to 1.11% and 11.67%, respectively, for the same period in 2024.

Financial Highlights

Quarterly Changes (comparisons to the third quarter of 2024)

Net income decreased 9%, or $0.9 million, to $9.7 million due to higher provision for credit losses on loans, partially offset by a $1.2 million increase in net interest income.
Pre-tax pre-provision for credit losses income (see non-GAAP financial measures table) increased $0.6 million, or 4%, to $16.4 million.
The $1.2 million increase in net interest income was driven by a 12 basis point increase in net interest margin that was caused by a 27 basis point decrease in cost of funds.
Noninterest income was $0.3 million higher than the comparative period, with increases in Bank-Owned Life Insurance (BOLI) income, partially offset by decreases in service charges on deposit accounts.
Noninterest expense was $0.8 million higher in the third quarter over the same quarter last year due to an increase in salaries and benefits and occupancy costs.
Included in the line-item changes from the third quarter of 2024 was the increase of $0.3 million in income from corporate-owned life insurance income invested to offset the $0.3 million increase in deferred compensation costs.

Linked Quarter Income Changes (comparisons to the three months ended June 30, 2025)

Net income decreased by $0.9 million, or 9%, driven mostly by a $2.5 million increase in provision for credit losses on loans, partially offset by a $1.3 million increase in net interest income.
Net interest income increased by $1.3 million, due to an 8 basis point increase in the yield of interest-earning assets combined with an increase in the average balance of interest-earning assets. There was a 5 basis point favorable decrease in cost of funds but the impact of that was mostly offset by a decrease in the average balance of interest-bearing liabilities.
Included in the line-item changes from the second quarter of 2025 was the decrease of $0.4 million in income from corporate-owned life insurance income invested to offset the $0.5 million decrease in deferred compensation costs.

Year-to-Date Income Changes (comparisons to the first nine months of 2024)

Net income decreased $0.8 million, or 3%. The decrease was primarily driven by an increase of $4.6 million in provision for credit losses. This decline was partially offset by an increase of $3.1 million in net interest income, due mostly to a 25 basis point decrease in the cost of interest-bearing liabilities. A favorable decrease in the cost of interest-bearing deposits of 29 basis points and decreases in the average balances of those deposits had the biggest impact on the increase in net interest income. While the Company experienced lower yields and balances on investments, this was mostly offset by increases in yields and balances on loans. Noninterest income decreased by $0.8 million and noninterest expense decreased by $0.2 million.
Pre-tax pre-provision for credit losses income (see non-GAAP financial measures table) increased $2.5 million, or 6%, to $46.2 million.
The provision for credit losses was $7.0 million, an increase of $4.6 million, primarily due to an increase in individual reserves during the third quarter of 2025, due to a single agricultural production property.
Noninterest income decreased by $0.8 million, or 3%, driven by the net $0.6 million gain from the balance sheet restructuring at the beginning of 2024, with no similar transaction in 2025, and a $0.6 million decrease in service charges and fees on deposit accounts. Partially offsetting these unfavorable variances was a $0.8 million gain on life insurance during the first nine months of 2025.
Noninterest expense decreased $0.2 million, due mostly to decreases in professional services and lower fraud and debit card losses, partially offset by increases in salaries and benefits and occupancy costs.
Included in the line-item changes from the same period in 2024 was the decrease of $0.5 million in income from corporate-owned life insurance income invested to offset the $0.5 million decrease in deferred compensation costs.

Statement of Condition Changes (comparisons to December 31, 2024)

Total assets increased by $95.1 million, or 3%, to $3.7 billion, during the first nine months of the year due primarily to increases in loan balances, partially offset by decreases in investment securities.
Gross loans held at amortized cost increased $160.4 million, due mostly to a $126.3 million increase in mortgage warehouse line utilization, as well as $46.8 million of growth in commercial real estate loans, a $7.9 million increase in other construction loans, and a $7.6 million increase in other commercial loans. This favorable growth was partially offset by decreases of $18.2 million in residential real estate loans, $9.7 million in farmland, and $0.4 million in consumer loans.
Deposits totaled $2.9 billion at September 30, 2025, representing a year-to-date increase of $41.1 million, or 1%. The growth in deposits came mostly from a $65.7 million increase in noninterest-bearing deposits and a $60.6 million increase in interest-bearing demand deposits. The increases were partially offset by decreases in customer time deposits and brokered deposits of $57.3 million and $40.0 million, respectively.
Other borrowings increased $71.9 million, from an increase in overnight borrowings of $55.0 million and customer repurchase agreements of $16.9 million.

Other financial highlights are reflected in the following table.


FINANCIAL HIGHLIGHTS
(Dollars in Thousands, Except Per Share Data, Unaudited)
		As of or for the									As of or for the
		three months ended									nine months ended
		9/30/2025			6/30/2025			9/30/2024			9/30/2025			9/30/2024
Net income	$	9,699		$	10,633		$	10,603		$	29,433		$	30,196
Diluted earnings per share	$	0.72		$	0.78		$	0.74		$	2.15		$	2.09
Return on average assets		1.04	%		1.16	%		1.14	%		1.07	%		1.11	%
Return on average equity		10.81	%		12.08	%		11.95	%		11.11	%		11.67	%

Net interest margin (tax-equivalent) ⁽¹⁾		3.78	%		3.68	%		3.66	%		3.73	%		3.66	%
Yield on average loans		5.36	%		5.27	%		5.25	%		5.30	%		5.11	%
Yield on investments		4.73	%		4.68	%		5.42	%		4.74	%		5.52	%
Cost of average total deposits ⁽³⁾		1.30	%		1.30	%		1.62	%		1.31	%		1.51	%
Cost of funds ⁽³⁾		1.45	%		1.49	%		1.72	%		1.47	%		1.66	%
Efficiency ratio (tax-equivalent) ^{(1) (2)}		58.05	%		59.43	%		58.38	%		59.32	%		61.07	%

Total assets	$	3,709,377		$	3,770,302		$	3,696,154		$	3,709,377		$	3,696,154
Loans net of deferred fees	$	2,491,788		$	2,434,609		$	2,321,025		$	2,491,788		$	2,321,025
Noninterest demand deposits	$	1,072,927		$	1,065,742		$	1,013,743		$	1,072,927		$	1,013,743
Total deposits	$	2,932,760		$	2,974,469		$	2,962,159		$	2,932,760		$	2,962,159
Noninterest-bearing deposits over total deposits		36.6	%		35.8	%		34.2	%		36.6	%		34.2	%

Shareholders' equity / total assets		9.71	%		9.43	%		9.70	%		9.71	%		9.70	%
Tangible common equity ratio ⁽²⁾		9.03	%		8.77	%		9.01	%		9.03	%		9.01	%
Book value per share	$	26.70		$	26.00		$	24.88		$	26.70		$	24.88
Tangible book value per share ⁽²⁾	$	24.66		$	23.98		$	22.93		$	24.66		$	22.93
Community bank leverage ratio (subsidiary bank)		11.73	%		11.75	%		11.70	%		11.73	%		11.70	%
Tangible common equity ratio (subsidiary bank) ⁽²⁾		11.08	%		10.77	%		10.90	%		11.08	%		10.90	%

(1)		Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(2)		See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures."
(3)		Includes noninterest bearing deposits.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income was $32.0 million for the third quarter of 2025, a $1.2 million increase, or 4%, over the third quarter of 2024, and increased $3.1 million, or 3%, to $92.7 million for the first nine months of 2025 relative to the same period in 2024.

For the third quarter of 2025, there was a 35 basis point decrease in the cost of our interest-bearing liabilities combined with a $17.9 million decrease in the average balance of interest-bearing liabilities. Although the balance of average interest-earning assets was $7.2 million higher, the yield was 13 basis points lower as compared to the same period in 2024, which partially offset the favorable variances on the liability side.

Net interest income for the comparative year-to-date periods increased $3.1 million, or 3%, due primarily to a decrease of 25 basis points in the cost of funds of average interest-bearing liabilities combined with an increase in the average balance of interest-earnings assets of $43.5 million. There was a $193.8 million, or 9%, increase in average loan balances, yielding 19 basis points higher for the same period, while average investment balances decreased $150.3 million, yielding 78 basis points lower for the same period. The decline in average investment balances was mostly due to calls of collateralized loan obligations in 2025. Average interest-bearing liabilities decreased $4.9 million, mostly in higher cost customer time deposits and brokered deposits, offset by an increase in interest-bearing demand deposits and borrowed funds. The cost of interest-bearing liabilities was 25 basis points lower for the comparative periods. The favorable net impact of the mix and rate change was a 7 basis point increase in our net interest margin for the nine months ending September 30, 2025, as compared to the same period in 2024.

Interest expense was $12.0 million for the third quarter of 2025, a decrease of $2.0 million, relative to the third quarter of 2024. For the first nine months of 2025, compared to the same period in 2024, interest expense decreased $4.2 million to $35.4 million. The decrease in interest expense for the first nine months of 2025, as compared to the same period in 2024, was attributable to a decrease in higher cost customer time deposits and brokered deposits, along with a net overall interest rate decrease in customer deposit account balances. These decreases were partially offset by increases in other borrowed funds. For the first nine months of 2025, compared to the same period in 2024, the average balance of higher cost customer time deposits and brokered deposits decreased $78.6 million, while low to no cost transaction account balances increased $93.6 million and borrowed funds increased $16.3 million.

Net interest margin was 3.78% for the third quarter of 2025, as compared to 3.68% for the linked quarter, and 3.66% for the third quarter of 2024. While the yield of interest-earning assets increased eight basis points for the third quarter of 2025 as compared to the linked quarter, the cost of interest-bearing liabilities decreased five basis points for the same comparative period. The average balance of interest-earning assets increased $5.6 million for the linked quarter, while the increase in interest-bearing liabilities was $2.1 million for the same period.

Provision for Credit Losses

The provision for credit losses on loans was $3.7 million for the third quarter of 2025, as compared to $1.2 million in the third quarter of 2024. The year-to-date provision for credit losses on loans was $6.9 million in 2025, as compared to $2.3 million for the same period in 2024. The $2.5 million increase in the provision for credit losses on loans in the third quarter of 2025, as compared to the third quarter of 2024, and the $4.6 million year-to-date increase in the provision for credit losses on loans, compared to the same period in 2024, was primarily due to the third quarter of 2025 addition of $3.5 million in individual reserves, mostly related to a single agricultural production loan. At September 30, 2025, this agricultural production loan had a remaining book balance of $3.5 million with an associated individual reserve of $3.5 million fully offsetting such loan.

There was a benefit for credit losses on unfunded commitments of $20,000 in the third quarter of 2025, and a provision for credit losses on unfunded commitments of $0.1 million for the first nine months of 2025, as compared to a provision for credit losses of $0.1 million in both the third quarter and first nine months of 2024, respectively.

Noninterest Income

Total noninterest income increased $0.3 million, or 3%, for the quarter ended September 30, 2025, as compared to the same quarter in 2024, and decreased $0.8 million, or 3%, for the year-to-date period ended September 30, 2025, as compared to the same period in 2024. The year-to-date decline was impacted by a decrease in service charge income on deposit accounts, unfavorable fluctuations in income on Bank-Owned Life Insurance (BOLI) with underlying investments mapped directly to the Company’s deferred compensation plan, and a net gain on the balance sheet restructure in early 2024 with no similar transaction in 2025. Offsetting these unfavorable variances was an increase in other income which was related to life insurance proceeds received in 2025 with no like proceeds in 2024.

The Company maintains a non-qualified deferred compensation plan for officers and directors, which allows the participant to defer a portion of their earnings tax-free. Participants are allowed to choose different hypothetical investment alternatives to determine their individualized return on their deferred compensation. The Company has chosen to offset the cost of this liability with a BOLI Policy, which is funded based on deferral elections from the participants. Although the BOLI is not directly tied to the deferred compensation plan, the BOLI is invested in similar fund types as those selected by the participants. There is some inefficiency in net earnings of the BOLI asset as compared to the deferred compensation liability created by the cost of insurance, differences in balances, and differences in individual fund performance. During the third quarter, and first nine months of 2025, earnings from the BOLI were $0.6 million, and $1.1 million, respectively, while additional expense from the related deferred compensation liability was $0.5 million, and $1.2 million, respectively. The majority of this expense is reported as professional fees under directors’ fees as it is related to deferral of past directors’ fees. Specifically, $0.4 million for the quarterly comparison, and $0.9 million for the year-to-date comparison, respectively, is reflected as directors’ fees as part of the overall professional fees expense line item. The tax benefit of having tax-free earnings with tax-deductible expense was $0.3 million during the third quarter of 2025, and $0.7 million for the first nine months of 2025.

Noninterest Expense

Total noninterest expense increased by $0.8 million, or 4%, in the third quarter of 2025, relative to the third quarter of 2024, and decreased by $0.2 million for the first nine months of 2025, as compared to the same period in 2024.

Salaries and Benefits were $0.5 million, or 4%, higher in the third quarter of 2025 as compared to the third quarter of 2024, and $0.8 million higher for the first nine months of 2025, as compared to the same period in 2024. The Company implemented a strategic reorganization at the end of the third quarter of 2025, which resulted in a reduction in force, accompanied by $0.2 million in severance payments. The remaining increase for both the quarter and year-over-year periods was mostly due to a change in composition in the workforce. There were 476 full-time equivalent employees at September 30, 2025, as compared to 494 at June 30, 2025, and 485 at December 31, 2024.

Occupancy expenses increased by $0.2 million for the third quarter and the first nine months of 2025 as compared to the same periods in 2024. The increases in both comparisons were primarily due to increased property taxes related to the updated assessed values of the properties involved in the sale/leaseback transaction in early 2024.

Other noninterest expense was relatively unchanged for the third quarter of 2025, as compared to the third quarter in 2024, and decreased $1.2 million, or 5%, for the first nine months of 2025, as compared to the same period in 2024. For the year-over-year comparison the decrease was primarily driven by decreases in directors’ deferred compensation expense and legal and accounting services of $0.5 million and $0.3 million, respectively. The remaining decrease was related to lower data processing costs and reduced debit card losses.

The Company's provision for income taxes was 23.6% of pre-tax income in the third quarter of 2025, relative to 26.4% in the third quarter of 2024, and 24.9% of pre-tax income for the first nine months of 2024, relative to 26.8% for the same period in 2024. The decrease in effective tax rate for both the quarterly and year-to-date comparisons is due to the tax credits, and tax-exempt income representing a larger percentage of total taxable income.

Balance Sheet Summary

The $95.1 million, or 3%, increase in total assets during the first nine months of 2025, was primarily a result of a $160.4 million increase in gross loans, partially offset by a $70.0 million decrease in investment securities.

The increase in gross loan balances, as compared to December 31, 2024, was mostly a result of organic growth; a $46.8 million increase in commercial real estate loans, a $7.9 million increase in other construction loans, a $7.6 million increase in other commercial loans, and a favorable change of $126.3 million in mortgage warehouse balances. Counterbalancing these positive loan variances were loan paydowns and maturities resulting in net declines in residential real estate loans, farmland loans, and consumer loans.

As indicated in the loan rollforward table below, new credit extended for the third quarter of 2025 remained flat on a linked-quarter basis, decreased $13.2 million over the same period in 2024, and increased $26.1 million for the year-to-date comparisons. The Company had $121.5 million in loan paydowns and maturities; however, an increase in mortgage warehouse lines of $126.3 million had a positive impact in the first nine months of 2025.


LOAN ROLLFORWARD
(Dollars in Thousands, Unaudited)
	For the three months ended:									For the nine months ended:
		9/30/2025			6/30/2025			9/30/2024			9/30/2025			9/30/2024
Gross loans beginning balance	$	2,434,605		$	2,306,762		$	2,234,528		$	2,331,341		$	2,090,075
New credit extended		48,065			48,147			61,239			162,582			136,518
Changes in line of credit utilization ⁽¹⁾		2,628			2,587			11,572			(6,914	)		(23,768	)
Change in mortgage warehouse		50,787			118,665			61,718			126,283			219,778
Pay-downs, maturities, charge-offs and amortization		(44,306	)		(41,556	)		(48,428	)		(121,513	)		(101,974	)
Gross loans ending balance	$	2,491,779		$	2,434,605		$	2,320,629		$	2,491,779		$	2,320,629
________________________

(1)

Change does not include new balances on lines of credit extended during the respective periods as such balances are included as part of “New credit extended” line above.

Unused commitments, excluding mortgage warehouse and overdraft lines, were $263.1 million at September 30, 2025, compared to $256.9 million at December 31, 2024. Total line utilization, excluding mortgage warehouse and overdraft lines, was 57.9% at September 30, 2025, and 57.0% at December 31, 2024. Mortgage warehouse utilization increased to 59.4% at September 30, 2025, as compared to 51.2% at December 31, 2024.

Deposit balances reflect growth of $41.1 million, or 1%, during the first nine months of 2025. Core non-maturity deposits increased by $138.4 million, or 7%, while customer time deposits decreased by $57.3 million, or 11%. Wholesale brokered deposits decreased by $40.0 million, or 15%. Overall noninterest-bearing deposits as a percentage of total deposits at September 30, 2025, increased to 36.6%, as compared to 34.8% at December 31, 2024. Other interest-bearing liabilities of $260.7 million on September 30, 2025, consist of $125.7 million in customer repurchase agreements, $25.0 million in overnight fed funds purchased, and $110.0 million of FHLB borrowings.

Overall uninsured deposits are estimated to be approximately $748.1 million, or 26% of total deposit balances, excluding public agency deposits that are subject to collateralization through a letter of credit issued by the FHLB. In addition, uninsured deposits of the Bank’s customers are eligible for FDIC pass-through insurance if the customer opens an IntraFi Insured Cash Sweep (ICS) account or a reciprocal time deposit through the Certificate of Deposit Account Registry System (CDARS). IntraFi allows for up to $285 million per customer of pass-through FDIC insurance, which would more than cover each of the Bank’s deposit customers if such customer desired to have such pass-through insurance. The Bank maintains a diversified deposit base with no significant customer concentrations and does not bank any cryptocurrency companies. At September 30, 2025, the Company had approximately 117,000 accounts, and the 25 largest deposit balance customers had balances of approximately 11% of overall deposits. During the third quarter of 2025, except for seasonal fluctuations in the normal course of business, there has been no material change in the composition of our 25 largest deposit balance customers.

The Company continues to have substantial liquidity. At September 30, 2025, and December 31, 2024, the Company had the following sources of primary and secondary liquidity (Dollars in Thousands, Unaudited):


Primary and secondary liquidity sources		9/30/2025		12/31/2024
Cash and cash equivalents	$	95,501	$	100,664
Unpledged investment securities		487,710		552,098
Excess pledged securities		230,581		242,519
FHLB borrowing availability		623,774		629,134
Unsecured lines of credit		460,785		479,785
Secured lines of credit		25,000		25,000
Funds available through fed discount window		266,419		298,296
Totals	$	2,189,770	$	2,327,496

Total capital of $360.1 million at September 30, 2025, reflects an increase of $2.8 million, or 1%, relative to year-end 2024. The increase in equity during the first nine months of 2025 was due to the addition of $29.4 million in net income, a $6.1 million favorable swing in accumulated other comprehensive income, due principally to changes in investment securities’ fair value, partially offset by $24.3 million in share repurchases, and $10.3 million in dividends paid. The remaining difference is related to the impact of equity compensation.

Asset Quality

Total nonperforming assets, comprised of nonaccrual loans and foreclosed assets, improved with a decline of $3.8 million to $15.8 million for the first nine months of 2025. The Company's ratio of nonperforming loans to gross loans decreased to 0.56% at September 30, 2025, from 0.84% at December 31, 2024. This favorable year-to-date decline resulted from a decrease in non-accrual loan balances, due mostly to the partial charge-off of one agricultural production loan in the second quarter of 2025. All the Company's nonperforming assets are individually evaluated for credit loss quarterly, and management believes the established allowance for credit loss on such loans is appropriate.

During the third quarter of 2025, the Company transferred one commercial real estate loan to other real estate owned (OREO), resulting in a foreclosed asset totaling $1.8 million. While the Company had no OREO assets on its balance sheet prior to this transfer, it has experience managing such assets and maintains established procedures for their resolution.

The Company's allowance for credit losses on loans and leases was $25.2 million at September 30, 2025, as compared to $21.7 million at June 30, 2025, and $24.8 million at December 31, 2024. The increase in the third quarter of 2025 as compared to June 30, 2025, resulted from a $3.5 million increase in specific individual reserves on impaired loans related to a single agricultural production loan. Such agricultural production loan was in the wine grape industry and had a remaining book balance of $3.5 million at September 30, 2025, with a full individual reserve of $3.5 million offsetting such remaining balance. In addition to this loan, the Bank had $19.2 million in outstanding agricultural production loans in the winery and grape industry at September 30, 2025, of which $1.7 million were grapes. Although consumer demand for wine produced in the Central Valley of California has declined, none of the remaining $19.2 million in wine and grape production loans were classified as special mention or substandard.


Allowance for Credit Losses on Loans by Category
(Dollars in Thousands, Unaudited)
	As of September 30, 2025
		Balance		Total Allowance	Percent of Portfolio		Coverage Ratio ⁽¹⁾
Real estate:
Residential real estate	$	364,277	$	1,400	14.62	%	0.38	%
Commercial real estate		1,404,681		16,511	56.37	%	1.18	%
Other construction/land		13,420		282	0.54	%	2.10	%
Farmland		67,860		488	2.72	%	0.72	%
Total real estate		1,850,238		18,681	74.25	%	1.01	%
Other Commercial		185,958		5,880	7.46	%	3.16	%
Mortgage warehouse lines		452,683		506	18.17	%	0.11	%
Consumer loans		2,909		113	0.12	%	3.88	%
Total Loans	$	2,491,788	$	25,180	100.00	%	1.01	%


	As of June 30, 2025
		Balance		Total Allowance	Percent of Portfolio		Coverage Ratio ⁽¹⁾
Real estate:
Residential real estate	$	371,415	$	1,694	15.26	%	0.46	%
Commercial real estate		1,392,075		17,083	57.17	%	1.23	%
Other construction/land		11,662		252	0.48	%	2.16	%
Farmland		67,967		185	2.79	%	0.27	%
Total real estate		1,843,119		19,214	75.70	%	1.04	%
Other Commercial		186,620		1,907	7.67	%	1.02	%
Mortgage warehouse lines		401,896		451	16.51	%	0.11	%
Consumer loans		2,974		108	0.12	%	3.63	%
Total Loans	$	2,434,609	$	21,680	100.00	%	0.89	%


	As of December 31, 2024
		Balance		Total Allowance	Percent of Portfolio		Coverage Ratio ⁽¹⁾
Real estate:
Residential real estate	$	382,507	$	1,808	16.41	%	0.47	%
Commercial real estate		1,357,833		17,051	58.24	%	1.26	%
Other construction/land		5,472		92	0.23	%	1.68	%
Farmland		77,547		280	3.33	%	0.36	%
Total real estate		1,823,359		19,231	78.21	%	1.05	%
Other Commercial		178,331		4,829	7.65	%	2.71	%
Mortgage warehouse lines		326,400		398	14.00	%	0.12	%
Consumer loans		3,344		372	0.14	%	11.12	%
Total Loans	$	2,331,434	$	24,830	100.00	%	1.07	%
___________________

(1)

Coverage ratio equals allowance for credit losses on loans divided by amortized cost.

The allowance for credit losses on loans and leases was 1.01% of gross loans at September 30, 2025, and 1.07% of gross loans at December 31, 2024. The largest increase in loan balances was from mortgage warehouse lines, which has the lowest reserve rate in the allowance for credit losses at 0.11%. Mortgage warehouse lines historically have incurred nominal losses and, therefore, have a significantly lower reserve than the other categories of loans. As a result, at September 30, 2025, approximately $0.5 million of the allowance for credit losses was attributable to mortgage warehouse lines. The allowance as a percentage of gross loans exclusive of mortgage warehouse lines was 1.21% at September 30, 2025, as compared to 1.04% at June 30, 2025, and 1.22% at December 31, 2024.

The largest loan segment of commercial real estate continues to maintain a coverage ratio at or above 1.18%. As described above, the significant increase in the coverage ratio for other commercial loans was due to an individual reserve on a $3.5 million agricultural production loan.

Management's detailed analysis indicates that the Company's allowance for credit losses on loans and leases should be sufficient to cover credit losses for the life of the loans and leases outstanding as of September 30, 2025, but no assurance can be given that the Company will not experience substantial future losses relative to the size of the loan and lease loss allowance. The Company calculates the allowance for credit losses using a combination of quantitative and qualitative factors applied to loans segmented by call report category.

About Sierra Bancorp

Sierra Bancorp is the holding Company for Bank of the Sierra (www.bankofthesierra.com), which is in its 48^th year of operations.

Bank of the Sierra offers a broad range of retail and commercial banking services through its 35 full-service branches located within the counties of Tulare, Kern, Kings, Fresno, Ventura, San Luis Obispo, and Santa Barbara. The Bank also maintains an online branch and provides specialized lending services through its mortgage warehouse division. In 2025, Bank of the Sierra was recognized as one of the strongest and top-performing community banks in the country, with a 5-star rating from Bauer Financial.

Forward-Looking Statements

The statements contained in this release 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 the Company. Readers are cautioned not to unduly rely on forward looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to, the health of the national and local economies, including the impact to the Company and its customers resulting from changes to, and the level of tariffs, inflation, and interest rates; effects of government shutdowns; changes in laws, rules, regulations, or interpretations to which the Company is subject; the Company’s ability to maintain and grow its deposit base; loan demand and continued portfolio performance; the Company's ability to attract and retain skilled employees; customers' service expectations; cyber security risks; the Company's ability to successfully deploy new technology; the success of acquisitions and branch expansion; operational risks including the ability to detect and prevent errors and fraud; the effectiveness of the Company’s enterprise risk management framework; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks that could affect stock price; changes to valuations of the Company’s assets and liabilities, including the allowance for credit losses, earning assets, and intangible assets; changes to the availability of liquidity sources including borrowing lines and the ability to pledge or sell certain assets; costs related to litigation; the effects of severe weather events, pandemics, other public health crises, acts of war or terrorism, and other external events on our business; and other factors detailed in the Company's SEC filings, including the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Form 10‑K and Form 10‑Q.


STATEMENT OF CONDITION
(Dollars in Thousands, Unaudited)

ASSETS		9/30/2025			6/30/2025			3/31/2025			12/31/2024			9/30/2024
Cash and due from banks	$	95,501		$	130,012		$	159,711		$	100,664		$	132,797
Investment securities
Available-for-sale, at fair value		596,933			668,834			620,288			655,967			706,310
Held-to-maturity, at amortized cost, net of allowance for credit losses		294,511			298,484			302,123			305,514			308,971
Total investment securities		891,444			967,318			922,411			961,481			1,015,281
Real estate loans
Residential real estate		363,197			370,348			376,533			381,438			388,169
Commercial real estate		1,407,083			1,394,487			1,382,928			1,360,374			1,338,793
Other construction/land		13,503			11,746			7,717			5,458			5,612
Farmland		67,704			67,811			73,061			77,388			80,589
Total real estate loans		1,851,487			1,844,392			1,840,239			1,824,658			1,813,163
Other commercial		184,756			185,404			180,390			177,013			168,236
Mortgage warehouse lines		452,683			401,896			283,231			326,400			335,777
Consumer loans		2,853			2,913			2,902			3,270			3,453
Gross loans		2,491,779			2,434,605			2,306,762			2,331,341			2,320,629
Deferred loan costs (fees) , net		9			4			(99	)		93			396
Allowance for credit losses on loans		(25,180	)		(21,680	)		(27,050	)		(24,830	)		(22,710	)
Net loans		2,466,608			2,412,929			2,279,613			2,306,604			2,298,315

Bank premises and equipment		15,056			15,285			15,338			15,431			15,647
Other assets		240,768			244,758			229,110			230,091			234,114
Total assets	$	3,709,377		$	3,770,302		$	3,606,183		$	3,614,271		$	3,696,154

LIABILITIES AND CAPITAL
Noninterest demand deposits	$	1,072,927		$	1,065,742		$	1,037,990		$	1,007,208		$	1,013,743
Interest-bearing transaction accounts		635,279			603,294			598,924			587,753			595,672
Savings deposits		357,107			352,803			355,325			347,387			356,725
Money market deposits		156,255			148,084			143,522			140,793			135,948
Customer time deposits		476,242			514,596			524,173			533,577			550,121
Wholesale brokered deposits		234,950			289,950			189,950			274,950			309,950
Total deposits		2,932,760			2,974,469			2,849,884			2,891,668			2,962,159

Repurchase agreements		125,749			126,509			118,756			108,860			125,534
Long-term debt		49,461			49,438			49,416			49,393			49,371
Subordinated debentures		35,972			35,928			35,883			35,838			35,794
Other interest-bearing liabilities		135,000			154,400			80,000			80,000			80,000
Total deposits and interest-bearing liabilities		3,278,942			3,340,744			3,133,939			3,165,759			3,252,858

Allowance for credit losses on unfunded loan commitments		790			810			820			710			640
Other liabilities		69,562			73,041			119,668			90,500			83,958
Total capital		360,083			355,707			351,756			357,302			358,698
Total liabilities and capital	$	3,709,377		$	3,770,302		$	3,606,183		$	3,614,271		$	3,696,154


GOODWILL AND INTANGIBLE ASSETS
(Dollars in Thousands, Unaudited)
		9/30/2025			6/30/2025			3/31/2025			12/31/2024			9/30/2024
Goodwill	$	27,357		$	27,357		$	27,357		$	27,357		$	27,357
Core deposit intangible		132			294			456			618			780
Total intangible assets	$	27,489		$	27,651		$	27,813		$	27,975		$	28,137

CREDIT QUALITY
(Dollars in Thousands, Unaudited)
		9/30/2025			6/30/2025			3/31/2025			12/31/2024			9/30/2024
Nonperforming loans	$	14,006		$	14,981		$	18,201		$	19,668		$	10,348
Foreclosed assets		1,839			—			—			—			—
Total nonperforming assets	$	15,845		$	14,981		$	18,201		$	19,668		$	10,348

Quarterly net charge offs (recoveries)	$	209		$	6,580		$	(259	)	$	215		$	170

Past due and still accruing (30-89)	$	187		$	3,033		$	3,057		$	1,348		$	211
Classified loans	$	32,111		$	35,700		$	37,265		$	44,464		$	29,148

Nonperforming loans / gross loans		0.56	%		0.62	%		0.79	%		0.84	%		0.45	%
NPA's / loans plus foreclosed assets		0.64	%		0.62	%		0.79	%		0.84	%		0.45	%
Allowance for credit losses on loans / gross loans		1.01	%		0.89	%		1.17	%		1.07	%		0.98	%

SELECT PERIOD-END STATISTICS
(Unaudited)
		9/30/2025			6/30/2025			3/31/2025			12/31/2024			9/30/2024
Shareholders' equity / total assets		9.71	%		9.43	%		9.75	%		9.89	%		9.70	%
Gross loans / deposits		84.96	%		81.85	%		80.94	%		80.62	%		78.34	%
Noninterest-bearing deposits / total deposits		36.58	%		35.83	%		36.42	%		34.83	%		34.22	%


CONSOLIDATED INCOME STATEMENT
(Dollars in Thousands, Unaudited)		For the three months ended:									For the nine months ended:
		9/30/2025			6/30/2025			9/30/2024			9/30/2025			9/30/2024
Interest income	$	43,937		$	42,717		$	44,798		$	128,108		$	129,253
Interest expense		11,969			12,064			14,008			35,374			39,577
Net interest income		31,968			30,653			30,790			92,734			89,676

Credit loss expense - loans		3,709			1,210			1,240			6,880			2,258
Credit loss (benefit) expense - unfunded commitments		(20	)		(10	)		120			80			130
Credit loss benefit - debt securities held-to-maturity		-			-			(1	)		-			(1	)
Net interest income after provision		28,279			29,453			29,431			85,774			87,289

Service charges and fees on deposit accounts		6,065			5,855			6,205			17,501			18,114
Net gain (loss) on sale of securities available-for-sale		-			1			73			124			(2,810	)
Net (loss) gain on sale of fixed assets		-			(19	)		-			(22	)		3,799
Increase in cash surrender value of life insurance		410			343			252			991			733
Earnings on separate account life insurance		608			973			288			1,078			1,545
Other income		975			1,400			971			3,580			2,628
Total noninterest income		8,058			8,553			7,789			23,252			24,009

Salaries and benefits		12,827			12,544			12,363			38,375			37,589
Occupancy expense		3,234			3,142			2,995			9,354			9,173
Other noninterest expenses		7,574			8,081			7,452			22,090			23,266
Total noninterest expense		23,635			23,767			22,810			69,819			70,028

Income before taxes		12,702			14,239			14,410			39,207			41,270
Provision for income taxes		3,003			3,606			3,807			9,774			11,074
Net income	$	9,699		$	10,633		$	10,603		$	29,433		$	30,196

*TAX DATA*
Tax-exempt muni income	$	1,580		$	1,577		$	1,584		$	4,733		$	5,164
Interest income - fully tax equivalent	$	44,357		$	43,136		$	45,219		$	129,366		$	130,626


PER SHARE DATA
(Unaudited)		For the three months ended:						For the nine months ended:
		9/30/2025		6/30/2025		9/30/2024		9/30/2025		9/30/2024
Basic earnings per share	$	0.73	$	0.78	$	0.75	$	2.17	$	2.11
Diluted earnings per share	$	0.72	$	0.78	$	0.74	$	2.15	$	2.09
Common dividends	$	0.25	$	0.25	$	0.24	$	0.75	$	0.70

Weighted average shares outstanding		13,361,594		13,563,910		14,188,051		13,582,194		14,331,032
Weighted average diluted shares		13,470,658		13,637,252		14,335,706		13,674,934		14,437,786

Book value per basic share (EOP)	$	26.70	$	26.00	$	24.88	$	26.70	$	24.88
Tangible book value per share (EOP) ⁽¹⁾	$	24.66	$	23.98	$	22.93	$	24.66	$	22.93

Common shares outstanding (EOP)		13,485,635		13,681,828		14,414,561		13,485,635		14,414,561

(1)

See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures".


KEY FINANCIAL RATIOS
(Unaudited)	For the three months ended:						For the nine months ended:
	9/30/2025		6/30/2025		9/30/2024		9/30/2025		9/30/2024
Return on average equity	10.81	%	12.08	%	11.95	%	11.11	%	11.67	%
Return on average assets	1.04	%	1.16	%	1.14	%	1.07	%	1.11	%
Net interest margin (tax-equivalent) ⁽¹⁾	3.78	%	3.68	%	3.66	%	3.73	%	3.66	%
Efficiency ratio (tax-equivalent) ^{(1) (2)}	58.05	%	59.43	%	58.38	%	59.32	%	61.07	%
Net charge-offs / average loans (not annualized)	0.01	%	0.27	%	0.01	%	0.27	%	0.14	%

(1)		Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(2)		See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures."


NON-GAAP FINANCIAL MEASURES
(Dollars in Thousands, Unaudited)	As of:
		9/30/2025			6/30/2025			9/30/2024
Total stockholders' equity	$	360,083		$	355,707		$	358,698
Less: goodwill and other intangible assets		27,489			27,651			28,137
Tangible common equity	$	332,594		$	328,056		$	330,561

Total assets	$	3,709,377		$	3,770,302		$	3,696,154
Less: goodwill and other intangible assets		27,489			27,651			28,137
Tangible assets	$	3,681,888		$	3,742,651		$	3,668,017

Total stockholders' equity (bank only)	$	435,186		$	430,250		$	427,762
Less: goodwill and other intangible assets (bank only)		27,489			27,651			28,137
Tangible common equity (bank only)	$	407,697		$	402,599		$	399,625

Total assets (bank only)	$	3,706,266		$	3,766,071		$	3,693,553
Less: goodwill and other intangible assets (bank only)		27,489			27,651			28,137
Tangible assets (bank only)	$	3,678,777		$	3,738,420		$	3,665,416

Common shares outstanding		13,485,635			13,681,828			14,414,561

Book value per common share (total stockholders' equity / shares outstanding)	$	26.70		$	26.00		$	24.88
Tangible book value per common share (tangible common equity / shares outstanding)	$	24.66		$	23.98		$	22.93
Equity ratio - GAAP (total stockholders' equity / total assets		9.71	%		9.43	%		9.70	%
Tangible common equity ratio (tangible common equity / tangible assets)		9.03	%		8.77	%		9.01	%
Tangible common equity ratio (bank only) (tangible common equity / tangible assets)		11.08	%		10.77	%		10.90	%


	For the three months ended:									For the nine months ended:
Efficiency Ratio:		9/30/2025			6/30/2025			9/30/2024			9/30/2025			9/30/2024
Noninterest expense	$	23,635		$	23,767		$	22,810		$	69,819			70,028
Divided by:
Net interest income		31,968			30,653			30,790			92,734			89,676
Tax-equivalent interest income adjustments		420			419			421			1,258			1,373
Net interest income, adjusted		32,388			31,072			31,211			93,992			91,049
Noninterest income		8,058			8,553			7,789			23,252			24,009
Less gain (loss) on sale of securities		-			1			73			124			(2,810	)
Less (loss) gain on sale of fixed assets		-			(19	)		-			(22	)		3,799
Tax-equivalent noninterest income adjustments		271			350			144			550			606
Noninterest income, adjusted		8,329			8,921			7,860			23,700			23,626
Net interest income plus noninterest income, adjusted	$	40,717		$	39,993		$	39,071		$	117,692		$	114,675
Efficiency Ratio (tax-equivalent)		58.05	%		59.43	%		58.38	%		59.32	%		61.07	%

	For the three months ended:									For the nine months ended:
		9/30/2025			6/30/2025			9/30/2024			9/30/2025			9/30/2024
Net income	$	9,699		$	10,633		$	10,603		$	29,433		$	30,196
Add: Provision for income taxes		3,003			3,606			3,807			9,774			11,074
Add: Provision for credit losses		3,689			1,200			1,359			6,960			2,387
Pre-tax pre-provision income	$	16,391		$	15,439		$	15,769		$	46,167		$	43,657


NONINTEREST INCOME/EXPENSE
(Dollars in Thousands, Unaudited)
	For the three months ended:									For the nine months ended:
Noninterest income:	9/30/2025			6/30/2025			9/30/2024			9/30/2025			9/30/2024
Service charges and fees on deposit accounts	$	6,065		$	5,855		$	6,205		$	17,501		$	18,114
Net gain (loss) on sale of securities available-for-sale		—			1			73			124			(2,810	)
(Loss) gain on sale of fixed assets		—			(19	)		—			(22	)		3,799
Increase in cash surrender value of life insurance		410			343			252			991			733
Earnings on separate account life insurance		608			973			288			1,078			1,545
Other		975			1,400			971			3,580			2,628
Total noninterest income	$	8,058		$	8,553		$	7,789		$	23,252		$	24,009
As a % of average interest-earning assets ⁽¹⁾		0.94	%		1.01	%		0.91	%		0.92	%		0.97	%

Noninterest expense:
Salaries and employee benefits
Salaries and benefits	$	12,728		$	12,416		$	12,286		$	38,132		$	37,264
Deferred compensation		99			128			77			243			325
Occupancy and equipment costs		3,234			3,142			2,995			9,354			9,173
Advertising and marketing costs		403			405			381			1,156			1,061
Data processing costs		1,518			1,566			1,555			4,582			4,744
Deposit services costs		2,134			2,118			2,150			6,243			6,302
Loan services costs
Loan processing		173			113			184			425			424
Foreclosed assets		1			(2	)		—			3			—
Other operating costs		901			1,078			959			2,905			2,980
Professional services costs
Legal & accounting services		641			419			547			1,712			1,976
Director's costs		332			309			327			951			1,018
Deferred directors' fees		438			948			174			942			1,383
Other professional service		763			711			775			2,180			2,167
Stationery & supply costs		102			132			120			335			382
Sundry & tellers		168			284			280			656			829
Total noninterest expense	$	23,635		$	23,767		$	22,810		$	69,819		$	70,028
As a % of average interest-earning assets ⁽¹⁾		2.76	%		2.81	%		2.68	%		2.77	%		2.82	%
Efficiency ratio (tax-equivalent) ⁽²⁾⁽³⁾		58.05	%		59.43	%		58.38	%		59.32	%		61.07	%
________________________

(1)		Annualized
(2)		Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(3)		See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures.”


AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)
	For the quarter ended						For the quarter ended						For the quarter ended
	9/30/2025						6/30/2025						9/30/2024
	Average Balance ⁽¹⁾		Income/ Expense		Yield/ Rate ⁽²⁾		Average Balance ⁽¹⁾		Income/ Expense		Yield/ Rate ⁽²⁾		Average Balance ⁽¹⁾		Income/ Expense		Yield/ Rate ⁽²⁾
Assets
Investments:
Federal funds sold/interest-earning due from accounts	$	31,672	$	329	4.12	%	$	18,122	$	211	4.67	%	$	88,509	$	1,225	5.51	%
Taxable		731,274		9,104	4.94	%		770,413		9,295	4.84	%		830,054		11,991	5.75	%
Non-taxable		196,550		1,580	4.04	%		196,364		1,577	4.08	%		199,261		1,584	4.00	%
Total investments		959,496		11,013	4.73	%		984,899		11,083	4.68	%		1,117,824		14,800	5.42	%

Loans: ⁽³⁾
Real estate		1,849,065		22,997	4.93	%		1,849,725		22,589	4.90	%		1,804,099		21,054	4.64	%
Agricultural production		70,033		961	5.44	%		72,933		915	5.03	%		81,501		1,520	7.42	%
Commercial		116,855		1,824	6.19	%		109,407		1,612	5.91	%		76,633		1,101	5.72	%
Consumer		2,872		64	8.84	%		3,214		64	7.99	%		3,558		78	8.72	%
Mortgage warehouse lines		395,940		7,059	7.07	%		368,592		6,440	7.01	%		303,463		6,227	8.16	%
Other		2,453		19	3.07	%		2,351		14	2.39	%		2,438		18	2.94	%
Total loans		2,437,218		32,924	5.36	%		2,406,222		31,634	5.27	%		2,271,692		29,998	5.25	%
Total interest-earning assets ⁽⁴⁾		3,396,714		43,937	5.18	%		3,391,121		42,717	5.10	%		3,389,516		44,798	5.31	%
Other earning assets		17,062						17,062						17,062
Non-earning assets		297,980						280,045						288,975
Total assets	$	3,711,756					$	3,688,228					$	3,695,553

Liabilities and shareholders' equity
Interest-bearing deposits:
Demand deposits	$	251,719	$	1,617	2.55	%	$	224,649	$	1,420	2.54	%	$	169,602	$	1,170	2.74	%
NOW		369,586		131	0.14	%		375,695		140	0.15	%		393,328		161	0.16	%
Savings accounts		356,172		106	0.12	%		354,798		97	0.11	%		359,921		93	0.10	%
Money market		156,347		745	1.89	%		146,193		608	1.67	%		132,804		542	1.62	%
Time deposits		496,155		4,078	3.26	%		516,970		4,283	3.32	%		562,251		6,010	4.25	%
Wholesale brokered deposits		259,624		2,929	4.48	%		244,401		2,778	4.56	%		327,141		4,004	4.87	%
Total interest-bearing deposits		1,889,603		9,606	2.02	%		1,862,706		9,326	2.01	%		1,945,047		11,980	2.45	%
Borrowed funds:
Federal funds purchased		30,545		353	4.59	%		46,214		517	4.49	%		168		2	4.74	%
Repurchase agreements		134,619		68	0.20	%		124,636		79	0.25	%		133,280		60	0.18	%
Short term borrowings		5,539		68	4.87	%		24,716		277	4.50	%		1		—	0.00	%
Long term FHLB Advances		80,000		788	3.91	%		80,000		780	3.91	%		80,000		786	3.91	%
Long-term debt		49,447		429	3.44	%		49,424		430	3.49	%		49,357		429	3.46	%
Subordinated debentures		35,945		657	7.25	%		35,899		655	7.32	%		35,767		751	8.35	%
Total borrowed funds		336,095		2,363	2.79	%		360,889		2,738	3.04	%		298,573		2,028	2.70	%
Total interest-bearing liabilities		2,225,698		11,969	2.13	%		2,223,595		12,064	2.18	%		2,243,620		14,008	2.48	%
Demand deposits - noninterest-bearing		1,048,639						1,020,374						995,326
Other liabilities		81,368						91,191						103,571
Shareholders' equity		356,051						353,068						353,036
Total liabilities and shareholders' equity	$	3,711,756					$	3,688,228					$	3,695,553

Interest income/interest-earning assets					5.18	%					5.10	%					5.31	%
Interest expense/interest-earning assets					1.40	%					1.42	%					1.65	%
Net interest income and margin ⁽⁵⁾			$	31,968	3.78	%			$	30,653	3.68	%			$	30,790	3.66	%

________________________

(1)		Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.
(2)		Yields and net interest margin have been computed on a tax equivalent basis utilizing a 21% effective tax rate.
(3)		Loans are gross of the allowance for credit losses. Loan fees have been included in the calculation of interest income. Net loan fees and loan acquisition FMV amortization were $(0.3) million and $(0.4) million for the quarters ended September 30, 2025, and 2024, respectively, and $(0.4) million for the quarter ended June 30, 2025.
(4)		Non-accrual loans have been included in total loans for purposes of computing total earning assets.
(5)		Net interest margin represents net interest income as a percentage of average interest-earning assets.


AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)
	For the nine months ended							For the nine months ended
	9/30/2025							9/30/2024
	Average Balance ⁽¹⁾		Income/ Expense		Yield/ Rate ⁽²⁾		Average Balance ⁽¹⁾		Income/ Expense		Yield/ Rate ⁽²⁾
Assets
Investments:
Interest-earning due from banks	$	34,728	$	1,128	4.34	%	$	49,779	$	2,065	5.53	%
Taxable		745,614		27,539	4.94	%		863,044		38,081	5.88	%
Non-taxable		196,820		4,733	4.07	%		214,677		5,164	4.06	%
Total investments		977,162		33,400	4.74	%		1,127,500		45,310	5.52	%

Loans:(3)
Real estate	$	1,841,163	$	67,576	4.91	%	$	1,804,159	$	61,706	4.57	%
Agricultural		73,071		2,906	5.32	%		72,946		4,064	7.44	%
Commercial		109,854		4,951	6.03	%		77,684		3,458	5.95	%
Consumer		3,123		196	8.39	%		3,739		238	8.50	%
Mortgage warehouse lines		359,564		19,029	7.08	%		234,470		14,431	8.22	%
Other		2,389		50	2.80	%		2,354		46	2.61	%
Total loans		2,389,164		94,708	5.30	%		2,195,352		83,943	5.11	%
Total interest-earning assets (4)		3,366,326		128,108	5.14	%		3,322,852		129,253	5.25	%
Other earning assets		17,062						17,155
Non-earning assets		284,071						281,952
Total assets	$	3,667,459					$	3,621,959

Liabilities and shareholders' equity
Interest-bearing deposits:
Demand deposits	$	228,208	$	4,329	2.54	%	$	146,443	$	2,601	2.37	%
NOW		374,508		390	0.14	%		396,644		393	0.13	%
Savings accounts		354,551		292	0.11	%		369,371		246	0.09	%
Money market		149,252		1,925	1.72	%		136,652		1,428	1.40	%
Time deposits		514,679		12,774	3.32	%		562,571		18,251	4.33	%
Brokered deposits		249,584		8,594	4.60	%		280,248		9,737	4.64	%
Total interest-bearing deposits		1,870,782		28,304	2.02	%		1,891,929		32,656	2.31	%
Borrowed funds:
Federal funds purchased		25,758		870	4.52	%		5,074		249	6.56	%
Repurchase agreements		123,954		216	0.23	%		125,742		166	0.18	%
Short term borrowings		11,439		391	4.57	%		14,314		613	5.72	%
Long term FHLB Advances		80,000		2,339	3.91	%		80,000		2,341	3.91	%
Long-term debt		49,424		1,289	3.49	%		49,335		1,291	3.50	%
Subordinated debentures		35,900		1,965	7.32	%		35,722		2,261	8.45	%
Total borrowed funds		326,475		7,070	2.90	%		310,187		6,921	2.98	%
Total interest-bearing liabilities		2,197,257		35,374	2.15	%		2,202,116		39,577	2.40	%
Demand deposits - noninterest-bearing		1,024,278						988,128
Other liabilities		91,709						86,061
Shareholders' equity		354,215						345,654
Total liabilities and shareholders' equity	$	3,667,459					$	3,621,959

Interest income/interest-earning assets					5.14	%					5.25	%
Interest expense/interest-earning assets					1.41	%					1.59	%
Net interest income and margin⁽⁵⁾			$	92,734	3.73	%			$	89,676	3.66	%

_____________________

(1)		Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.
(2)		Yields and net interest margin have been computed on a tax equivalent basis utilizing a 21% effective tax rate.
(3)		Loans are gross of the allowance for credit losses. Loan fees have been included in the calculation of interest income. Net loan fees and loan acquisition FMV amortization were $(0.9) million and $(1.1) million for the nine months ended September 30, 2025, and 2024, respectively.
(4)		Non-accrual loans have been included in total loans for purposes of computing total earning assets.
(5)		Net interest margin represents net interest income as a percentage of average interest-earning assets.

Category: Financial
Source: Sierra Bancorp

View source version on businesswire.com: https://www.businesswire.com/news/home/20251027905011/en/

Contact: Kevin McPhaill, President/CEO

Phone: (559) 782‑4900 or (888) 454‑BANK

Website Address: www.sierrabancorp.com

Source: Sierra Bancorp

Sierra Bancorp Reports Financial Results for Third Quarter and First Nine Months of 2025

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Sierra Bancorp Reports Financial Results for Third Quarter and First Nine Months of 2025

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