SIERRA BANCORP
For the period ended Sep 30, 2026. Filed Oct 30, 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.
Sep 30, 2026 · Filed Oct 30, 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
| September 30, 2026 | December 31, 2025 | |||
|---|---|---|---|---|
| Amount | Percent | Amount | Percent | |
| Real estate: | | | | |
| Residential real estate | $342,062 | 14.09% | $359,514 | 14.12% |
| Commercial real estate | 1,465,022 | 60.33% | 1,390,890 | 54.61% |
| Other construction/land | 15,891 | 0.65% | 14,414 | 0.57% |
| Farmland | 63,117 | 2.60% | 68,307 | 2.68% |
| Total real estate | 1,886,092 | 77.67% | 1,833,125 | 71.98% |
| Other commercial | 179,642 | 7.40% | 192,577 | 7.56% |
| Mortgage warehouse facilities | 360,326 | 14.83% | 518,333 | 20.35% |
| Consumer loans | 2,451 | 0.10% | 2,810 | 0.11% |
| Total loans | $2,428,511 | 100.00% | $2,546,845 | 100.00% |
The decrease in gross loan balances compared to December 31, 2025, was primarily driven by a $158.0 million decrease in mortgage warehouse utilization, partially offset by a $74.1 million increase in commercial real estate loans and continued loan production across the Company's core lending markets. The reduction in mortgage warehouse balances reflects a temporary pause in growth in the third quarter of 2026 due to the implementation of enhanced controls, as well as market volatility throughout 2026 due to the higher rate environment, while growth in commercial real estate lending demonstrates continued success in originating and retaining relationship-based commercial credits. The Company continues to add new mortgage warehouse customers with total commitments increasing $82.3 million, or 10.6%, during the first nine months of 2026. Most of the increase was in the third quarter with $54.4 million of net new commitments.
Despite the decline in period-end mortgage warehouse balances, average mortgage warehouse balances decreased by only $20.8 million during the third quarter of 2026 compared to the linked quarter, while related interest income declined slightly by $0.2 million. In addition, commercial real estate balances increased $75.3 million during the quarter, reflecting strong production activity and growth in relationship-based lending.
The Company's loan portfolio remains well diversified, with commercial real estate representing 60% of total loans, mortgage warehouse facilities representing 15%, residential real estate comprising 14%, and other commercial loans representing 7% of the portfolio at September 30, 2026. Commercial real estate lending continues to be a key area of growth, supported by strong customer demand and a healthy pipeline of opportunities.
As indicated in the loan rollforward table below, the Company significantly increased new credit extended during the quarter to $123.7 million as compared to $49.4 million in the previous quarter. The implementation of semi-monthly credit evaluation meetings has enabled the Bank’s lending teams to more effectively compete for lending opportunities. While lending activity increased, it was offset by significant declines in mortgage warehouse utilization as well as higher than normal paydowns.
| For the three months ended: · For the nine months ended: | |||||
|---|---|---|---|---|---|
| 9/30/2026 | 6/30/2026 | 9/30/2025 | 9/30/2026 | 9/30/2025 | |
| Gross loans beginning balance | $2,456,206 | $2,466,891 | $2,434,605 | $2,546,880 | $2,331,341 |
| New credit extended | 123,724 | 49,370 | 48,065 | 180,905 | 162,582 |
| Loan purchases | 41,197 | — | — | 41,197 | — |
| Changes in line of credit utilization (1) | (10,694) | (4,841) | 2,628 | (38,127) | (6,914) |
| Change in mortgage warehouse facilities | (97,131) | (20,997) | 50,787 | (158,008) | 126,283 |
| Pay-downs, maturities, charge-offs, and amortization | (84,692) | (34,217) | (44,306) | (144,237) | (121,513) |
| Gross loans ending balance | 2,428,610 | 2,456,206 | 2,491,779 | 2,428,610 | 2,491,779 |
| Deferred (fees) and costs, net | (99) | (146) | 9 | (99) | 9 |
| Gross loans, amortized cost | $2,428,511 | $2,456,060 | $2,491,788 | $2,428,511 | $2,491,788 |
| (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 September 30, 2026, the total regulatory CRE concentration ratio of total CRE over Bank Tier 1 Capital plus allowance was 245.7% as compared to 242.1% at December 31, 2025. The overall level of construction and land development lending was 3.4% of Bank Tier 1 capital plus allowance at September 30, 2026. At September 30, 2026, non-owner occupied commercial real estate included $293.5 million of retail; $134.4 million of warehouse/industrial; $142.8 million of office; and $302.0 million of hospitality. Approximately $21.4 million, or 15%, of the office real estate balances mature or reprice in less than two years.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.