SIERRA BANCORP

Nonperforming assets currently is comprised of loans for which the Company is no longer accruing interest but can include OREO and other foreclosed assets, when applicable.

Nonperforming assets

Total nonperforming assets, comprised of non-accrual loans, decreased by $1.5 million, or 7%, during the first quarter of 2025. The decrease in non-accrual loans, was from the successful payoff and paydown of a couple of loans secured by farmland. The Company's ratio of nonperforming assets to loans plus foreclosed assets decreased to 0.79% at March 31, 2025, from 0.84% at December 31, 2024. All the Company's nonperforming assets are individually evaluated for credit loss quarterly and management believes the established allowance for credit loss on such loans is appropriate.

Subsequent to March 31, 2025, the Company received payment in full on a $5.9 million non-accrual loan secured by commercial real estate. The $6.5 million payoff included all principal, interest, and fees due, bringing the total of non-accrual loans to $12.3 million.

There were no foreclosed assets at March 31, 2025, and December 31, 2024, however, when the Company does own foreclosed assets, they are periodically evaluated and written down to their fair value less expected disposition costs, if lower than the then-current carrying value.

An action plan is in place for each non-accruing loan, and they are all being actively managed. Collection efforts are continuously pursued for all nonperforming loans, but the Company cannot provide assurance that they will be resolved in a timely manner or that nonperforming balances will not increase.

The Company had $3.1 million in loans past due 30-89 days and still accruing at March 31, 2025. This is an increase of $1.7 million over the balance at December 31, 2024. All of these past due loans are under management supervision and every effort is being taken to assist the borrowers and manage credit risk in this regard.