SIERRA BANCORP

For the period ended Jun 30, 2026. Filed Jul 31, 2026.

About this filing

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

Noninterest Income and Noninterest Expense

Noninterest Income/Expense


· · Three months ended June 30, · · Six months ended June 30,
Noninterest income: · · 2026 · · 2025 · · 2026 · · 2025
Service charges and fees on deposit accounts
Interchange income on debit cards	$2,077	$2,056	$4,018	$4,008
Business analysis fees	1,174	1,123	2,204	2,157
Overdraft fee income	1,313	1,255	2,637	2,500
Other service charges and fees	1,423	1,421	2,801	2,771
Net gain on sale of securities available-for-sale	—	1	—	124
Gain (loss) on sale of fixed assets	—	(19)	360	(22)
Increase in cash surrender value of life insurance	416	343	835	581
Earnings on separate account life insurance	1,386	973	1,006	470
Other	781	1,400	2,678	2,606
Total noninterest income	$8,570	$8,553	$16,539	$15,195
As a % of average interest-earning assets (1)	1.04%	1.01%	1.00%	0.91%

Noninterest expense:
Salaries and employee benefits
Salary and incentives	$10,403	$10,463	$20,811	$21,150
Employee benefits	2,009	1,953	4,297	4,253
Deferred compensation	136	128	139	144
Occupancy costs	3,204	3,142	6,289	6,120
Advertising and marketing costs	338	405	670	753
Data processing costs	1,657	1,566	3,240	3,064
Deposit services costs	1,983	2,118	3,931	4,109
Loan services costs
Loan processing	117	113	231	251
Foreclosed assets	1	(2)	18	2
Other operating costs	772	1,078	1,551	2,006
Professional services costs
Legal and accounting services	572	419	1,129	1,070
Director's costs	337	309	692	619
Deferred directors' fees cost/(benefit)	1,039	948	467	504
Other professional services	694	711	1,394	1,417
Stationery and supply costs	100	132	197	233
Debit card and fraud loss	148	284	278	489
Total noninterest expense	$23,510	$23,767	$45,334	$46,184
As a % of average interest-earning assets (1)	2.85%	2.81%	2.74%	2.78%

(1)	Annualized

Noninterest Income:

Total noninterest income was unchanged at $8.6 million compared to the second quarter of 2025. Favorable variances included a $0.4 million increase in earnings on separate account BOLI, a $0.1 million increase in service charges and fees on deposit accounts, and a modest increase in cash surrender value income from life insurance. These improvements were largely offset by a $0.6 million decrease in other income, mainly due to a decrease in gain on life insurance proceeds.

For the first six months of 2026, noninterest income increased $1.3 million, or 9%, to $16.5 million compared to $15.2 million for the same period in 2025. The increase was driven primarily by a $0.5 million increase in earnings on separate account life insurance, a $0.3 million increase in cash surrender value income from life insurance, a $0.2 million increase in service charges and fees on deposit accounts, and a $0.4 million favorable variance from gains on sales of fixed assets. These favorable changes were partially offset by lower gains on sale of investment securities.

The Company’s non-qualified deferred compensation plan for officers and directors, allows participants to defer a portion of their earnings and select from various hypothetical investment alternatives to determine their individual returns. The Company economically offsets this liability with separate account life insurance policies that are invested in similar underlying fund types within the life insurance policy. Because the deferred compensation liability and the separate account life insurance asset are not contractually linked, differences in balances, fund performance, and insurance costs can result in temporary timing mismatches between changes in separate account life insurance income and the related deferred compensation expense.

Earnings on separate account life insurance were $1.4 million for the second quarter of 2026, compared to a loss of $0.4 million in the linked quarter and earnings of $1.0 million in the second quarter of 2025. For the first six months of 2026, earnings on separate account life insurance totaled $1.0 million, compared to $0.5 million for the same period in 2025. These changes reflect market-driven fluctuations in the value of the underlying investment alternatives and do not represent changes in the operating performance or credit quality of the Company.

The majority of the related deferred compensation expense or benefit is reported within professional services expense under deferred directors' fees, as it primarily relates to directors' deferred compensation elections. Deferred directors' fee expense was $1.0 million during the second quarter of 2026, compared to a benefit of $0.6 million in the linked quarter and expense of $0.9 million in the second quarter of 2025. For the first six months of 2026 and 2025, deferred directors' fee expense totaled $0.5 million.

Noninterest Expense:

Total noninterest expense decreased $0.3 million, or 1%, compared to the second quarter of 2025. Salaries and benefits expense remained essentially unchanged from the prior year quarter. Other noninterest expense decreased $0.3 million, primarily due to lower deposit service costs and other operating expenses. These favorable variances were partially offset by higher deferred compensation expense, legal and accounting costs, and directors' fees.

For the first six months of 2026, noninterest expense decreased $0.9 million, or 2%, to $45.3 million from $46.2 million for the same period in 2025. Salaries and benefits decreased $0.3 million, while other noninterest expense declined $0.7 million. The improvement was primarily attributable to lower deposit service costs, lower operating expenses, and reduced sundry and teller expenses, partially offset by higher occupancy costs, legal and accounting expenses, and director-related costs. In addition, we had $0.5 million in severance and recruiting costs related to an executive leadership restructuring during the quarter, which was offset by a reduction in overall staff. These results reflect management's continued focus on maintaining a relatively flat expense base while selectively investing in strategic growth initiatives, technology enhancements, regulatory compliance, and customer service capabilities.

Overall full-time equivalent employees were 452 at June 30, 2026, as compared to 465 at December 31, 2025, and 494 at June 30, 2025.

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