SIERRA BANCORP

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

Gross loan balances at $2.4 billion, increased $103.3 million, or 4%, during the first half of 2025. Organic loan growth contributed to increases of $34.1 million in commercial real estate loans, $6.3 million in construction loan balances, and $8.4 million in other commercial loans. Mortgage warehouse line utilization increased $75.5 million, or 23%. Consumer loans had a modest decline, while residential real estate loans decreased $11.1 million, and farmland loans decreased $9.6 million.

As indicated in the loan rollforward below, new credit extended for the second quarter of 2025 decreased $18.2 million over the linked quarter comparison and increased $7.8 million over the same period in 2024. For the six months ended June 30, 2025, new credit extended increased $39.2 million, or 52% over the same period in 2024. For the first six months ended 2025, we had $77.2 million in loan paydowns and maturities, along with a $9.5 million decrease in line of credit utilization, partially offset by a $75.5 million increase in mortgage warehouse utilization for the first half of 2025.

At June 30, 2025, the total regulatory CRE concentration ratio of total CRE over Tier 1 Capital plus allowance was 243.6% as compared to 236.3% at December 31, 2024, and 241.1% at June 30, 2024. The overall level of construction and land development lending is 2.6% of regulatory capital plus allowance for credit losses at June 30, 2025. At June 30, 2025, non-owner occupied commercial real estate includes $306.5 million of retail; $145.6 million of warehouse/industrial; $155.5 million of office; and $222.0 million of hospitality. Approximately $35.8 million, or 23% of the office real estate matures in less than two years.

The mortgage warehouse lines are structured as repurchase agreement lines. The repurchase agreement structure provides stronger credit protection to the Company, as well as more favorable regulatory capital treatment, as these repurchase lines are not considered off-balance sheet commitments for regulatory capital purposes as they are unconditionally cancellable.