What Sierra Bancorp told the SEC could break it.

Sierra Bancorp's Bank of the Sierra lends primarily to customers in California's South San Joaquin Valley, the Central Coast and Ventura County, and its loan book is heavily concentrated in real estate (72.0% of the portfolio at December 31, 2025; commercial real estate alone 54.6% of gross loans); a regional real-estate recession, natural disaster or local economic downturn would disproportionately raise nonperforming loans and credit losses.

“At December 31, 2025, 72.0% of our loan portfolio consisted of real estate loans, and a sizeable p”

Sierra Bancorp's Central-Valley borrowers are exposed to agricultural and oil-commodity cycles: a decline in general agricultural conditions could increase nonperforming assets, and another significant drop in oil prices could impair customers (particularly in Kern County, where oil production is a key economic driver) and depress property values and property taxes — concentrating credit risk in commodity-sensitive local economies.

“Another significant drop in oil prices could have an adverse impact on our customers and their ability to make payments to us, particularly in areas such as Kern County, where oil production is a key economic driver.”

Sierra Bancorp's funding depends on deposits and wholesale sources — it carries $36.0 million of debt to trust subsidiaries related to trust-preferred securities (TruPS) and relies on Federal Home Loan Bank of San Francisco borrowings and unsecured/secured credit lines (some already drawn at year-end 2025); a contraction in deposit or wholesale funding availability or higher funding rates would pressure its liquidity and net interest margin.

“The Company's liabilities include $36.0 million in debt obligations due to its trust subsidiaries, related to TruPS issued by those entities.”

Sierra Bancorp operates in a highly regulated environment subject to multiple banking agencies, Dodd-Frank/Riegle-Neal interstate-branching rules, and consumer-protection/fair-lending laws (Community Reinvestment Act, Equal Credit Opportunity Act, Fair Housing Act) whose violation can bring sanctions; separately, retaliatory tariffs on U.S. agricultural exports have created uncertainty in the California agricultural community that could lower commodity prices and borrower income.

“retaliatory tariffs levied by certain countries in response to tariffs imposed by the US Government on imports from those countries have created a high degree of uncertainty and disruption in the California agricultural community, due to the level of goods that are exported.”