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

BSRR$42.14+0.5%Stored close · as of Nov 10, 2026

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Contents

Allowance for Credit Losses on Loans

ALLOWANCE FOR CREDIT LOSSES* – LOANS*

The allowance for credit losses on loans, a contra-asset, is established through periodic provisions for credit losses on loans. It is maintained at a level that is considered adequate to measure expected losses on individually identified loans, as well as expected losses inherent in the remaining loan portfolio. Specifically identifiable and quantifiable losses are immediately charged off against the allowance; recoveries are generally recorded only when sufficient cash payments are received subsequent to the charge-off.

The following tables highlight the coverage ratios by loan category at June 30, 2026, and December 31, 2025 (dollars in thousands, unaudited):


· · As of June 30, 2026
	Balance	Total Allowance	Percent of Portfolio	Coverage Ratio (1)
Real estate:
Commercial real estate	$1,389,730	$15,913	56.58%	1.15%
Other construction/land	15,851	307	0.65%	1.94%
Farmland	65,759	532	2.68%	0.81%
Total real estate (2)	1,471,340	16,752	59.91%	1.14%
Other Commercial	179,164	4,895	7.29%	2.73%
Consumer loans (including overdrafts)	2,524	108	0.10%	4.28%
Subtotal (2) (3)	1,653,028	21,755	67.30%	1.32%
Residential real estate	345,575	1,320	14.07%	0.38%
Mortgage warehouse facilities	457,457	525	18.63%	0.11%
Gross loans, amortized cost	$2,456,060	$23,600	100.00%	0.96%


· · As of December 31, 2025
	Balance	Total Allowance	Percent of Portfolio	Coverage Ratio (1)
Real estate:
Commercial real estate	$1,390,890	$16,354	54.61%	1.18%
Other construction/land	14,414	296	0.57%	2.05%
Farmland	68,307	496	2.68%	0.73%
Total real estate (2)	1,473,611	17,146	57.86%	1.16%
Other Commercial	192,577	2,146	7.56%	1.11%
Consumer loans (including overdrafts)	2,810	112	0.11%	3.99%
Subtotal (2) (3)	1,668,998	19,404	65.53%	1.16%
Residential real estate	359,514	1,411	14.12%	0.39%
Mortgage warehouse facilities	518,333	665	20.35%	0.13%
Gross loans, amortized cost	$2,546,845	$21,480	100.00%	0.84%

(1)	Coverage ratio equals allowance for credit losses on loans divided by total loans on the amortized cost basis.

(2)	Does not include residential real estate.

(3)	Does not include mortgage warehouse facilities.

The allowance for credit losses on loans was $23.6 million, or 0.96% of gross loans, at June 30, 2026, compared to $21.5 million, or 0.84% of gross loans, at December 31, 2025. The Company's overall coverage ratio is influenced by the composition of its loan portfolio, which includes significant concentrations in mortgage warehouse and residential real estate loans that have historically experienced minimal credit losses and therefore require comparatively low reserve

allocations. At June 30, 2026, mortgage warehouse and residential real estate loans totaled $803.0 million, representing approximately 33% of total loans, while the related allowance was $1.8 million, or 0.23% of the outstanding balances. As a result, these portfolios reduce the Company's overall allowance coverage ratio. Excluding mortgage warehouse and residential real estate loans, the allowance for credit losses totaled $21.8 million and represented 1.32% of the remaining loan portfolio, compared to 1.16% at December 31, 2025. The Company's commercial real estate portfolio, which represents its largest loan segment, maintained a reserve coverage ratio of 1.15% at June 30, 2026. The increase in the allowance during the first six months of 2026 was driven primarily by higher reserve levels within the other commercial loan portfolio, including increased specific reserves related to individually evaluated credits and changes in management's assessment of credit risk.

Allowance for Credit Losses on Loans


· · For the three months ended · · For the threemonths ended · · For the sixmonths ended · · For the sixmonths ended · · For the year ended
· · June 30, · · June 30, · · June 30, · · June 30, · · December 31,
Balances: · · 2026 · · 2025 · · 2026 · · 2025 · · 2025
Average gross loans outstanding during period (1)	$2,395,737	$2,406,222	$2,405,933	$2,195,352	$2,409,304
Gross Loans outstanding at end of period	$2,456,206	$2,434,605	$2,456,206	$2,320,629	$2,546,880

Allowance for credit losses on loans:
Balance at beginning of period	$21,250	$27,050	$21,480	$24,830	$24,830
Provision charged to expense	2,283	1,210	2,360	3,171	6,095
Charge-offs
Real estate
Commercial real estate	—	1,147	90	1,147	1,421
Total real estate	—	1,147	90	1,147	1,421
Other commercial	30	5,418	117	5,475	8,022
Consumer loans	131	166	348	496	907
Total	$161	$6,731	$555	$7,118	$10,350
Recoveries
Real estate
Farmland	$—	$—	$—	$410	$410
Total real estate	—	—	—	410	410
Other commercial	184	11	226	24	42
Consumer loans	44	140	89	363	453
Total	$228	$151	$315	$797	$905
Net loan (recoveries) charge-offs	$(67)	$6,580	$240	$6,321	$9,445
Balance at end of period	$23,600	$21,680	$23,600	$21,680	$21,480

RATIOS
Net (recoveries) charge-offs to average loans (annualized)	(0.01)%	1.10%	0.02%	0.18%	0.39%
Allowance for credit losses on loans to gross loans at end of period	0.96%	0.89%	0.96%	0.98%	0.84%
Net loan (recoveries) charge-offs to allowance for credit losses on loans at end of period	(0.28)%	30.35%	1.02%	13.42%	43.97%
Net loan (recoveries) charge-offs to provision for credit losses on loans	(2.93)%	543.80%	10.17%	134.99%	154.96%

(1)	Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.

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