Sierra Bancorp (BSRR) investor relations material

Executive summary

• Net income for Q2 2026 was $9.9 million ($0.77 per diluted share), down from $10.6 million ($0.78 per share) in Q2 2025, mainly due to a $1.1 million increase in credit loss expense tied to a specific agricultural loan reserve; first half 2026 net income rose 14% to $22.4 million ($1.72 per diluted share), driven by higher noninterest income, lower provision for credit losses, and reduced noninterest expense.

• Return on average assets for Q2 2026 was 1.09% and return on average equity was 10.90%; for the first half, these were 1.24% and 12.38%, respectively.

• Net interest margin for Q2 2026 was 3.74% (up from 3.68% in Q2 2025); for the first half, it was 3.75%, up from 3.71% year-over-year.

• Total assets were $3.7 billion at June 30, 2026, down 3% from year-end 2025, reflecting declines in investment securities and gross loans, partially offset by deposit growth.

Financial highlights

• Diluted EPS for the first half increased by $0.29 (20%) to $1.72 year-over-year.

• Net interest income for Q2 2026 was $30.4 million, down $0.2 million year-over-year; for the first half, it was $61.0 million, up $0.3 million.

• Noninterest income for Q2 2026 was $8.6 million, flat year-over-year; for the first half, it increased 9% to $16.5 million, led by higher life insurance earnings and service charges.

• Noninterest expense for Q2 2026 decreased 1% to $23.5 million; for the first half, it fell 2% to $45.3 million, reflecting lower deposit service and operating costs.

• Efficiency ratio improved to 57.70% for the first half, down from 60.00% year-over-year.

Outlook and guidance

• Loan production and pipeline increased significantly in Q2 2026, with momentum expected to continue into Q3 and net loan growth anticipated in the second half of 2026, especially in commercial real estate and industrial lending.

• Management expects continued benefit from lower funding costs and a more balanced interest rate risk profile, though remains cautious about potential impacts from declining rates and is optimistic about continued growth and profitability.