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 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Commission file number: 000-33063 SIERRA BANCORP (Exact name of Registrant as specified in its charter) California 33-0937517 (State of Incorporation) (IRS Employer Identification No) 86 North Main Street, Porterville, California 93257 (Address of principal executive offices) ( ...

Sierra Bancorp (BSRR) came out with quarterly earnings of $0.78 per share, beating the Zacks Consensus Estimate of $0.74 per share. This compares to earnings of $0.71 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +5.41%. A quarter ago, it was expected that this parent company of Bank of the Sierra would post earnings of $0.66 per share when it actually produced earnings of $0.65, delivering a surprise of -1.52%.Over the last ...

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) [Second Quarter and First Six Months 2025 Financial Highlights](index=1&type=section&id=Financial%20Highlights) Sierra Bancorp reported improved financial results for Q2 and the first half of 2025, driven by strong loan and deposit growth, an improved net interest margin, and a favorable efficiency ratio Quarterly and Year-to-Date Performance | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $10.6 million | $10.3 million | $19.7 million | $19.6 million | | **Diluted EPS** | $0.78 | $0.71 | $1.43 | $1.35 | Q2 2025 vs. Linked Quarter (Q1 2025) Performance | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | **Net Income** | $10.6 million | $9.1 million | +17% | | **Diluted EPS** | $0.78 | $0.65 | +19% | | **Return on Average Assets** | 1.16% | 1.02% | +14 bps | | **Return on Average Equity** | 12.08% | 10.44% | +164 bps | | **Efficiency Ratio** | 59.43% | 60.62% | Improved | - Overall loan growth was strong at **$127.9 million**, or **22% annualized**, during the second quarter[5](index=5&type=chunk) - The company declared a dividend of **$0.25 per share** and repurchased **135,641 shares** of stock during the quarter[5](index=5&type=chunk) [Detailed Financial Analysis](index=6&type=section&id=Detailed%20Financial%20Analysis) This section provides a detailed breakdown of the company's income statement, balance sheet, asset quality, and capital position, analyzing key changes and drivers of performance [Income Statement Analysis](index=6&type=section&id=Income%20Statement%20Analysis) Net interest income increased year-over-year for both the quarter and six-month period, primarily due to a decrease in the cost of interest-bearing liabilities which offset lower asset yields - Q2 2025 net interest income increased by **$0.5 million (2%)** year-over-year to **$30.7 million**, mainly due to a **23 basis point** decrease in interest expense on interest-bearing liabilities[18](index=18&type=chunk) - The provision for credit losses on loans for H1 2025 was **$3.2 million**, a significant increase from **$1.0 million** in H1 2024, primarily due to **$6.3 million** in net charge-offs, including a **$5.3 million** charge-off on a previously evaluated agricultural loan[24](index=24&type=chunk)[25](index=25&type=chunk) - Noninterest income and expense were impacted by market-driven changes in BOLI assets and deferred compensation, with BOLI income increasing by **$0.8 million** and deferred compensation expense rising by **$0.7 million** in Q2 2025 compared to Q2 2024[12](index=12&type=chunk) - The effective tax rate for Q2 2025 decreased to **25.3%** from **27.8%** in Q2 2024, as tax credits and tax-exempt income formed a larger portion of pre-tax income[33](index=33&type=chunk) [Balance Sheet Analysis](index=10&type=section&id=Balance%20Sheet%20Analysis) Total assets grew **4%** to **$3.8 billion** in the first half of 2025, fueled by a **$103.3 million** increase in gross loans, with deposits also increasing by **$82.8 million** and a favorable shift towards noninterest-bearing deposits Balance Sheet Changes (H1 2025) | Metric | Change in H1 2025 | Balance at 6/30/2025 | | :--- | :--- | :--- | | **Total Assets** | +$156.0 million (+4%) | $3.8 billion | | **Gross Loans** | +$103.3 million (+4%) | $2.43 billion | | **Total Deposits** | +$82.8 million (+3%) | $2.97 billion | - Key drivers of loan growth in H1 2025 were a **$75.5 million** increase in mortgage warehouse loans and a **$34.1 million** increase in commercial real estate loans[12](index=12&type=chunk)[36](index=36&type=chunk) - Noninterest-bearing deposits as a percentage of total deposits increased to **35.8%** at June 30, 2025, up from **34.8%** at year-end 2024[40](index=40&type=chunk) - Uninsured deposits, excluding collateralized public funds, were estimated to be approximately **26%** of total deposit balances[41](index=41&type=chunk) [Asset Quality and Credit Risk](index=12&type=section&id=Asset%20Quality%20and%20Credit%20Risk) Asset quality metrics improved in the first half of 2025, with nonperforming assets decreasing and the allowance for credit losses declining due to a specific agricultural loan charge-off Asset Quality Indicators | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Nonperforming Assets** | $15.0 million | $19.7 million | | **Nonperforming Loans / Gross Loans** | 0.62% | 0.84% | | **Allowance for Credit Losses / Gross Loans** | 0.89% | 1.07% | - The decrease in nonperforming assets was mainly due to the partial charge-off of one agricultural production loan[44](index=44&type=chunk) - The allowance for credit losses on loans decreased by **$3.2 million** in H1 2025, primarily due to the **$5.3 million** charge-off of the agricultural loan which had a corresponding specific allowance in the prior quarter[45](index=45&type=chunk) - Excluding mortgage warehouse loans, which have a low allowance, the allowance for credit losses as a percentage of gross loans was **1.04%** at June 30, 2025[48](index=48&type=chunk) [Liquidity and Capital](index=12&type=section&id=Liquidity%20and%20Capital) The company maintained robust liquidity and capital, with substantial primary and secondary liquidity sources, while regulatory capital ratios remained strong despite a slight capital decrease - Total primary and secondary liquidity sources stood at **$2.31 billion** as of June 30, 2025[43](index=43&type=chunk) Key Capital Ratios (June 30, 2025) | Ratio | Value | | :--- | :--- | | **Community Bank Leverage Ratio (Bank)** | 11.75% | | **Tangible Common Equity Ratio (Consolidated)** | 8.77% | - In H1 2025, total capital decreased by **$1.6 million**, as the **$19.7 million** in net income was offset by **$18.0 million** in share repurchases and **$7.0 million** in dividends[43](index=43&type=chunk) [Financial Statements and Supplementary Data](index=15&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) [Consolidated Financial Statements](index=15&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited Consolidated Statement of Condition (Balance Sheet) and Consolidated Income Statement, providing a detailed view of the company's financial position and performance Statement of Condition (Balance Sheet) Highlights (June 30, 2025) | Category | Amount (in thousands) | | :--- | :--- | | **Total Assets** | **$3,770,302** | | Net Loans | $2,412,929 | | Total Investment Securities | $967,318 | | **Total Liabilities** | **$3,414,595** | | Total Deposits | $2,974,469 | | **Total Capital** | **$355,707** | Consolidated Income Statement Highlights (Three Months Ended June 30, 2025) | Category | Amount (in thousands) | | :--- | :--- | | Net Interest Income | $30,653 | | Credit Loss Expense (Total) | $1,200 | | Noninterest Income | $8,553 | | Noninterest Expense | $23,767 | | **Net Income** | **$10,633** | [Supplementary Financial Data](index=10&type=section&id=Supplementary%20Financial%20Data) This section contains various supplementary tables that provide deeper insights into the company's financial health, including detailed breakdowns of credit quality, loan portfolio activity, allowance for credit losses by loan category, and average balance sheet data with corresponding yields and rates Credit Quality Data (June 30, 2025) | Metric | Amount (in thousands) | | :--- | :--- | | Nonperforming loans | $14,981 | | Total nonperforming assets | $14,981 | | Quarterly net charge offs | $6,580 | | Past due loans (30-89 days) | $3,033 | Loan Rollforward (Three Months Ended June 30, 2025) | Category | Amount (in thousands) | | :--- | :--- | | Beginning Balance | $2,306,762 | | New credit extended | $48,147 | | Change in mortgage warehouse | $118,665 | | Pay-downs, maturities, etc. | ($41,556) | | **Ending Balance** | **$2,434,605** | Allowance for Credit Losses by Loan Category (June 30, 2025) | Loan Category | Balance (in thousands) | Allowance (in thousands) | Coverage Ratio | | :--- | :--- | :--- | :--- | | Commercial Real Estate | $1,392,075 | $17,083 | 1.23% | | Residential Real Estate | $371,415 | $1,694 | 0.46% | | Mortgage Warehouse | $401,896 | $451 | 0.11% | | **Total Loans** | **$2,434,609** | **$21,680** | **0.89%** | [Non-GAAP Financial Measures](index=20&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations for non-GAAP financial measures used in the report to their nearest GAAP equivalents, which management uses to assess the company's performance Reconciliation of Tangible Common Equity (June 30, 2025) | Metric | Amount (in thousands) | | :--- | :--- | | Total stockholders' equity (GAAP) | $355,707 | | Less: goodwill and other intangible assets | $27,651 | | **Tangible common equity (Non-GAAP)** | **$328,056** | Key Non-GAAP Ratios (June 30, 2025) | Ratio | Value | | :--- | :--- | | Tangible book value per common share | $23.98 | | Tangible common equity ratio | 8.77% | | Efficiency Ratio (tax-equivalent) | 59.43% |

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental a ...

Company Overview - Sierra Bancorp (BSRR) is headquartered in Porterville and has experienced a price change of 5.95% this year [3] - The company currently pays a dividend of $0.25 per share, resulting in a dividend yield of 3.26%, which is higher than the Banks - West industry's yield of 2.86% and the S&P 500's yield of 1.55% [3] Dividend Performance - The current annualized dividend of Sierra Bancorp is $1.00, reflecting a 6.4% increase from the previous year [4] - Over the past 5 years, the company has increased its dividend 3 times year-over-year, with an average annual increase of 3.88% [4] - The current payout ratio is 35%, indicating that the company paid out 35% of its trailing 12-month earnings per share as dividends [4] Earnings Growth and Future Outlook - For the fiscal year, Sierra Bancorp expects solid earnings growth, with the Zacks Consensus Estimate for 2025 at $2.95 per share, representing a year-over-year earnings growth rate of 4.61% [5] - Future dividend growth will depend on earnings growth and the payout ratio [4] Investment Opportunity - Sierra Bancorp presents a compelling investment opportunity as it offers an attractive dividend and has a strong Zacks Rank of 1 (Strong Buy) [6]

Investors interested in Finance stocks should always be looking to find the best-performing companies in the group. Sierra Bancorp (BSRR) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Finance peers, we might be able to answer that question.Sierra Bancorp is a member of the Finance sector. This group includes 870 individual stocks and curren ...

Core Viewpoint - Sierra Bancorp (BSRR) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on a company's changing earnings picture, which is crucial for predicting near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade for Sierra Bancorp indicates a positive outlook for its earnings, suggesting potential buying pressure and an increase in stock price [3][5]. - Analysts have raised their earnings estimates for Sierra Bancorp, with the Zacks Consensus Estimate increasing by 2.3% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Sierra Bancorp's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Company Overview - Sierra Bancorp is based in Porterville and operates in the Finance sector, with a year-to-date share price change of 2.97% [3] - The company currently pays a dividend of $0.25 per share, resulting in a dividend yield of 3.36%, which is higher than the Banks - West industry's yield of 3.2% and the S&P 500's yield of 1.58% [3] Dividend Performance - The current annualized dividend of Sierra Bancorp is $1, reflecting a 6.4% increase from the previous year [4] - Over the past five years, the company has increased its dividend three times, achieving an average annual increase of 3.98% [4] - The current payout ratio is 35%, indicating that the company paid out 35% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - Sierra Bancorp is expected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 projected at $2.95 per share, representing a year-over-year growth rate of 4.61% [5] Investment Considerations - Sierra Bancorp is viewed as a compelling investment opportunity due to its attractive dividend and strong Zacks Rank of 2 (Buy) [7]

Core Insights - The article emphasizes the importance of value investing as a strategy to identify strong stocks, particularly through fundamental analysis and traditional valuation metrics [2][3] Group 1: Sierra Bancorp (BSRR) - Sierra Bancorp (BSRR) has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential as a value stock [4] - BSRR's current P/E ratio is 9.59, which is lower than the industry average of 10.36, suggesting it may be undervalued [4] - The Forward P/E ratio for BSRR has fluctuated between 8.27 and 12.25 over the past year, with a median of 10.20 [4] - BSRR's P/B ratio is 1.15, compared to the industry's average P/B of 1.26, indicating solid valuation [5] - The P/B ratio for BSRR has ranged from 0.88 to 1.37 in the past year, with a median of 1.15 [5] - BSRR's P/S ratio is 2.03, slightly below the industry's average P/S of 2.16, reinforcing its value proposition [6] - The P/CF ratio for BSRR is 8.86, which is lower than the industry average of 10.33, suggesting a favorable cash flow outlook [7] - BSRR's P/CF has varied from 7.13 to 11.60 over the past year, with a median of 9.26 [7] Group 2: FS Bancorp (FSBW) - FS Bancorp (FSBW) also holds a Zacks Rank of 2 (Buy) and an A for Value, making it another attractive value stock [8] - FSBW's P/B ratio is 1.02, which is lower than the industry's average P/B of 1.26, indicating potential undervaluation [8] - Over the past 52 weeks, FSBW's P/B has fluctuated between 0.92 and 1.31, with a median of 1.08 [8] Group 3: Overall Valuation Insights - Both Sierra Bancorp and FS Bancorp exhibit strong value metrics, suggesting they are likely undervalued in the current market [9] - The strength of their earnings outlook further supports the case for these stocks as impressive value investments at this time [9]

2025 WESTERN BANK FORUM MARCH 10 - 11, 2025 MARINA DEL REY, CALIFORNIA INVESTOR PRESENTATION SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of Sierra Bancorp's management and are: Actual results may differ from those set forth in the forward-looking statements. Factors that could cause Sierra Bancorp's actual results to differ materially ...