SIERRA BANCORP
For the period ended Jun 30, 2026. Filed Jul 31, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 31, 2026
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Loan Portfolio
A distribution of the Company’s loans showing the balance and percentage of loans by type is presented for the noted periods in the table below. The balances in the table are after deferred or unamortized loan origination, extension, or commitment fees, and deferred origination costs. While not reflected in the loan totals and not currently comprising a material segment of lending activities, the Company also occasionally originates and sells, or participates out portions of loans to non-affiliated investors.
Loan Distribution
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| · · June 30, 2026 · · December 31, 2025 | ||||||||||
| · · Amount · · Percent · · Amount · · Percent | ||||||||||
| Real estate: | | | | | | | | | | |
| Residential real estate | | $345,575 | | 14.07% | | $359,514 | | 14.12% | ||
| Commercial real estate | | | 1,389,730 | | 56.57% | | | 1,390,890 | | 54.61% |
| Other construction/land | | | 15,851 | | 0.65% | | | 14,414 | | 0.57% |
| Farmland | | | 65,759 | | 2.68% | | | 68,307 | | 2.68% |
| Total real estate | | | 1,816,915 | | 73.97% | | | 1,833,125 | | 71.98% |
| Other commercial | | | 179,164 | | 7.29% | | | 192,577 | | 7.56% |
| Mortgage warehouse facilities | | | 457,457 | | 18.64% | | | 518,333 | | 20.35% |
| Consumer loans | | | 2,524 | | 0.10% | | | 2,810 | | 0.11% |
| Total loans | | $2,456,060 | | 100.00% | | $2,546,845 | | 100.00% | ||
The decrease in gross loan balances compared to December 31, 2025, was primarily driven by a $60.9 million reduction in mortgage warehouse facilities balances, reflecting normal fluctuations in mortgage origination activity and secondary market demand. Other changes in loan balances were primarily attributable to scheduled paydowns, payoffs, and normal customer activity. Despite the decline in period-end balances, mortgage warehouse average balances increased $8.0 million during the second quarter of 2026 compared to the linked quarter. Average balances of commercial real estate and commercial and industrial loans declined modestly during the quarter, while period-end balances remained relatively stable. As the quarter progressed, however, loan production strengthened significantly, that we believe reflects a shift in momentum entering the third quarter of 2026. This improvement was particularly evident within the commercial real estate and commercial and industrial portfolios and resulted in an enhanced pipeline of lending opportunities entering the second half of the year.
The Company's loan portfolio remains diversified, with commercial real estate representing 57% of total loans, mortgage warehouse facilities representing 19%, residential real estate comprising 14%, and other commercial loans representing
7% of the portfolio at June 30, 2026. Commercial real estate balances remained relatively stable during the first six months of the year despite elevated payoff activity, reflecting continued success in replacing runoff with new production.
As indicated in the loan rollforward table below, new credit extended for the second quarter of 2026 increased $41.6 million over the linked quarter to $49.4 million and increased $1.2 million over the same period in 2025. The Company also had $59.6 million in loan paydowns and maturities, a $27.4 million decline in line of credit utilization, and a decrease of $60.9 million in mortgage warehouse facilities utilization for the first half of 2026.
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LOAN ROLLFORWARD | | | | | | | | | | | | | | | |
| (Dollars in Thousands, Unaudited) | | | | | | | | | | | | | | | |
| · · For the three months ended: · · For the six months ended: | |||||||||||||||
| | | | 6/30/2026 | | | 3/31/2026 | | | 6/30/2025 | | | 6/30/2026 | | | 6/30/2025 |
| Gross loans beginning balance | | $2,466,891 | | $2,546,880 | | $2,306,762 | | $2,546,880 | | $2,331,341 | |||||
| New credit extended | | | 49,370 | | | 7,811 | | | 48,147 | | | 57,181 | | | 114,517 |
| Changes in line of credit utilization (1) | | | (4,841) | | | (22,592) | | | 2,587 | | | (27,433) | | | (9,542) |
| Change in mortgage warehouse | | | (20,997) | | | (39,880) | | | 118,665 | | | (60,877) | | | 75,496 |
| Pay-downs, maturities, charge-offs and amortization | | | (34,217) | | | (25,328) | | | (41,556) | | | (59,545) | | | (77,207) |
| Gross loans ending balance | | | 2,456,206 | | | 2,466,891 | | | 2,434,605 | | $2,456,206 | | $2,434,605 | ||
| Deferred costs and (fees), net | | | (146) | | | (97) | | | 4 | | | (146) | | | 4 |
| Gross loans, amortized cost | | $2,456,060 | | $2,466,794 | | $2,434,609 | | $2,456,060 | | $2,434,609 | |||||
| (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. |
At June 30, 2026, the total regulatory CRE concentration ratio of total CRE over Tier 1 Capital plus allowance was 235.9% as compared to 242.1% at December 31, 2025. The overall level of construction and land development lending was 3.4% of regulatory capital plus allowance for credit losses at June 30, 2026. At June 30, 2026, non-owner occupied commercial real estate included $304.7 million of retail; $137.2 million of warehouse/industrial; $147.7 million of office; and $256.0 million of hospitality. Approximately $25.1 million, or 17% of the office real estate matures or reprices in less than two years.
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