SIERRA BANCORP
For the period ended Sep 30, 2026. Filed Oct 30, 2026.
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Sep 30, 2026 · Filed Oct 30, 2026
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Off-Balance Sheet Arrangements
The Company maintains commitments to extend credit in the normal course of business, as long as there are no violations of conditions established in the outstanding contractual arrangements. It is unlikely that all unused commitments will ultimately be drawn down.
A summary of the Company’s unfunded commitments and utilization is presented below (dollars in thousands, unaudited):
| September 30, 2026 | December 31, 2025 | September 30, 2025 | ||||
|---|---|---|---|---|---|---|
| Line Available (2) | Utilization % | Line Available (2) | Utilization % | Line Available (2) | Utilization % | |
| Real estate: | | | | | | |
| Residential real estate | $10,570 | 52.48% | $15,726 | 44.50% | $16,717 | 43.13% |
| Commercial real estate | 15,364 | 89.92% | 23,203 | 86.93% | 22,952 | 87.28% |
| Other construction/land | 964 | 92.36% | 2,634 | 79.10% | 3,951 | 68.71% |
| Farmland | 1,842 | 85.60% | 3,126 | 80.20% | 4,211 | 73.38% |
| Total real estate | 28,740 | 85.63% | 44,689 | 80.92% | 47,831 | 79.92% |
| Other commercial | 166,490 | 49.82% | 187,084 | 48.81% | 201,990 | 45.80% |
| Consumer | 4,365 | 22.95% | 4,580 | 24.29% | 4,661 | 23.34% |
| Subtotal (1) | 199,595 | 62.86% | 236,353 | 61.00% | 254,482 | 58.75% |
| Mortgage warehouse facilities | 488,174 | 42.47% | 247,667 | 67.67% | 308,817 | 59.45% |
| Overdrafts - Commercial and Consumer | 65,689 | 1.48% | 69,112 | 1.40% | 69,956 | 1.36% |
| Total | $753,458 | 48.13% | $553,132 | 61.64% | $633,255 | 56.31% |
| | | | | | | |
| Unused commitment as a percent of gross loans, amortized cost | 31.03% | | 21.72% | | 25.41% | |
| Unused mortgage warehouse facilities as percent of gross loans, amortized cost | 20.10% | | 9.72% | | 12.39% | |
| (1) | Excludes mortgage warehouse facilities and overdraft lines. |
| (2) | Represents unfunded loan commitments available to customers. |
Included in unused commitments are mortgage warehouse facilities, which are mostly in the form of repurchase lines. The repurchase agreement structure provides stronger credit protection to the Company, as well as more favorable regulatory capital treatment, as these repurchase lines are not considered off-balance sheet commitments for regulatory capital purposes as they are unconditionally cancelable.
The Company also had undrawn letters of credit issued to customers totaling $1.8 million at September 30, 2026, and $5.7 million at December 31, 2025. The effect on the Company’s revenues, expenses, cash flows and liquidity from the unused portion of commitments to provide credit cannot be reasonably predicted because there is no guarantee that the lines of credit will ever be used. However, the “Liquidity” section in this Form 10‑Q outlines resources available to draw upon should the Company be required to fund a significant portion of unused commitments.
In addition to unused commitments to provide credit, the Company is utilizing a $125 million letter of credit issued by the FHLB on the Company’s behalf as security for certain local agency deposits which totaled $67.5 million at September 30, 2026. That letter of credit is backed by loans pledged to the FHLB by the Company. For more information on the Company’s off-balance sheet arrangements, see Note 7 to the consolidated financial statements located elsewhere herein.
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