SIERRA BANCORP
For the period ended Mar 31, 2026. Filed May 1, 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.
Mar 31, 2026 · Filed May 1, 2026
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Overview of the Results of Operations and Financial Condition
OVERVIEW OF THE RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
RESULTS OF OPERATIONS SUMMARY
First Quarter 2026 Compared to First Quarter 2025
First quarter 2026 net income was $12.5 million, and $0.96 per diluted share as compared to $9.1 million and $0.65 per diluted share in the first quarter of 2025. The Company’s annualized return on average equity was 13.88% and annualized
return on average assets was 1.39% for the quarter March 31, 2026, compared to 10.44% and 1.02%, respectively, for the same quarter in 2025. The primary drivers behind the variance in first quarter net income are as follows:
| ● | Net income for the first quarter of 2026 increased $3.4 million, or 38%, to $12.5 million. There were favorable changes in every major income statement category, including a decrease in provision for credit losses of $2.0 million, or 99%, an increase in net interest income of $0.5 million, or 2%, an increase in noninterest income of $1.3 million, or 20%, and a $0.6 million, or 3%, reduction in noninterest expense. |
| ● | The $0.5 million increase in net interest income was due to a $0.8 million decrease in interest expense partially offset by a $0.3 million decrease in interest income. |
| ● | The decrease of $2.0 million in the provision for credit losses was primarily due to an increased specific reserve in the first quarter of 2025 on an individually evaluated loan related to a single loan relationship of a wine grape grower. |
| ● | The $1.3 million increase in noninterest income was primarily due to higher service charge income, an increase in cash surrender value of life insurance due to purchases of additional life insurance in the second quarter of 2025, and other increases related to higher FHLB dividend income and an increase in the fair value of bank stocks. |
| ● | The $0.6 million decline in noninterest expense in the first quarter over the same quarter last year was primarily due to decreases in salaries and benefits, professional services, and deferred directors’ fees. |
FINANCIAL CONDITION SUMMARY
March 31, 2026, Relative to December 31, 2025
The Company’s assets totaled $3.8 billion at March 31, 2026, a decrease of $74.8 million, or 2.0% from December 31, 2025. The following provides a summary of key balance sheet changes during the first three months of 2026:
| ● | Investment securities decreased $13.2 million, or 1.0%, to $903.0 million primarily due to early calls of U.S. government agencies. |
| ● | Gross loans decreased $80.1 million, due mostly to a $39.9 million seasonal decrease in mortgage warehouse line utilization coupled with declines in overall line utilization and new credit extended. |
| ● | Deposits totaled $2.9 billion at March 31, 2026, representing a year-to-date increase of $49.3 million, or 2%. The increase in deposits came from a $56.8 million increase in core customer deposits, partially offset by a $7.7 million decline in customer time deposits. |
| ● | Overnight borrowings decreased $93.0 million, FHLB term advances decreased $25.0 million, and customer repurchase agreements decreased $3.0 million. |
| ● | Total capital of $363.7 million at March 31, 2026, reflects a decrease of $1.1 million compared to December 31, 2025. The decrease in equity during the first quarter of 2026 was due to $9.5 million in share repurchases, a $3.4 million dividend paid to shareholders, and $1.8 million unfavorable swing in other comprehensive income/loss due principally to negative changes in investment securities’ fair value. These changes were partially offset by $12.5 million in net income recorded during the quarter. The remaining difference was related to activity from stock options and restricted stock during the year. |
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