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CLOSED · 06:35 ET
Market ClerkRecap
Sun Oct 25 · markets closed1 signal on Oct 2494 insider buys this week · $48.3MCIRO short report next: Oct 31The week ahead

BSRR

SIERRA BANCORP
NASDAQ · FINANCIALS · STATE COMMERCIAL BANKS
41.74
+1.33 +3.29%
USD · close Oct 23
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Work order
32
FLAG · shorts 32
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $541.1MP/E 12.2DIV YIELD 2.44%FCF YIELD 8.25%REV TTM —NET INCOME $45M +10.6%NET CASH $142.7M52W 27.59 – 42.85SEC XBRL · TTM TO Invalid Date

How BSRR rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
64%
of sentences unchanged
Added
79
new sentences
Dropped
68
sentences removed
Length
+166
words, now 10,385

New in FY2025

  • Adverse developments, such as continued interest rate volatility, inflation, tariffs, federal government shut-downs, jobs market, health epidemics or pandemics (or expectations about them), interest rate volatility, international trade disputes, oil price volatility, the level of U.S. debt, including the debt ceiling (and the potential inability to raise the debt ceiling), and global economic conditions, could depress business and/or consumer confidence levels, negatively impact real estate values, and otherwise lead to economic weakness which could have one or more of the following undesirable effects on our business: ● a decrease in low-cost or noninterest bearing deposits; ● a slowing of demand for loans or other products and services offered by us; ● an inability to retain and recruit employees due to competition for labor; ● increased competition for loans or other earning assets, including compression of credit spreads; ● a decline in the value of our loans or other assets secured by real estate; ● a decline in the value of fixed-rate investment securities, which could lead to a reduction in capital due to declines in other comprehensive income/(loss); ● an increase in the reliance on wholesale funding; ● a credit impairment of our investment securities; or ● an increase in the number of borrowers who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to us, which in turn could result in higher levels of nonperforming assets, net charge-offs, and provisions for credit losses.
  • In addition to the impact of interest rate risk on earnings, fluctuations in interest rates can affect the demand of customers for products and services, and an increase in the general level of interest rates may adversely affect the ability of certain borrowers to make variable-rate or adjustable-rate loan payments.
  • The continued inversion of the shorter-end of the yield curve, along with a relatively flat longer-end of the yield curve, could further negatively impact the Company’s earnings over time.
  • With three rate cuts by the Federal Open Markets Committee of the Federal Reserve Bank in 2025, parts of the interest rate curve steepened through 2025 toward a more normal, upward-sloping shape.
  • However, the shorter end of the curve remains inverted.
  • Further, rates continue to be volatile along the curve, and uncertainty about the magnitude and direction of future rate movements along the curve remains due primarily to inflation and jobs data.
  • Elevated interest rates since 2022 have decreased the value of the Company’s held-to-maturity and available-for-sale securities portfolio and certain fixed-rate loans, and the Company would realize losses if it were required to sell many of the securities or loans originated prior to 2022 to meet liquidity needs.
  • This is due to our footprint in Central California, where a considerable portion of the population is impacted, to some extent, by the agricultural industry.
  • It is difficult to predict if a drought will resume and if it does how long it might last.
  • The Company does not have direct exposure to oil producers, and our exposure via loans outstanding to borrowers involved in servicing oil companies totaled $110.0 million at December 31, 2025.
  • Due to a higher rate environment, competition for deposits has become more fierce, and new deposits generally have a higher cost.
  • At December 31, 2025, the Bank estimates it had uninsured deposits of $703 million, or 25% of total deposits.
  • When coupled with many exempt positions remaining remote and/or hybrid work arrangements, the Company is able to recruit talent we would not otherwise be able to attract.
  • For the year ended December 31, 2025, we had total net other comprehensive gains of $8.1 million, net of tax, primarily as a result of a decline in unrealized losses in our securities portfolio.
  • Approximately 72% of our loan portfolio at December 31, 2025, consisted of real estate loans.
  • However, the overall concentration of commercial real estate loans has declined significantly since peaking at December 31, 2020.
  • At December 31, 2025, 72.0% of our loan portfolio consisted of real estate loans, and a sizeable portion of the remaining loan portfolio had real estate collateral as a secondary source of repayment or as an abundance of caution.
  • Loans on commercial buildings represented approximately 75.9% of all real estate loans, while construction/development and land loans were 0.8%, loans secured by residential properties accounted for 21.0%, and loans secured by farmland were 3.7% of real estate loans.
  • The Company’s $14.8 million balance of nonperforming assets at December 31, 2025, is comprised primarily of two agricultural relationships totaling $13.0 million and a single other real estate owned property of $1.6 million.
  • Deterioration in real estate values might also further reduce the number of loans the Company makes to businesses in the construction and real estate industry, which could negatively impact our organic growth prospects.
  • Our commercial real estate exposes us to increased lending risks.
  • Commercial and agricultural real estate, construction and land development, and multi-family loans comprise approximately 57.9% of our total loan portfolio as of December 31, 2025, exposing the Company to certain risks if not properly managed overall and individually.
  • Our concentration of commercial real estate loans peaked at December 31, 2020, and the concentration to capital and allowance has declined from 376% to 242% since such date.
  • In the next three years, $30.9 million, or 20.1%, of our office real estate loans have the ability to reprice.
  • The potential inability of our borrowers to service debt at higher rates exposes us to greater risk of loss.
  • At December 31, 2025, we had $192.6 million, or 7.6% of total loans, in commercial loans (including SBA loans and agricultural production loans but excluding mortgage warehouse loans).
  • At December 31, 2025, we established an allowance for estimated credit losses on loans in our accounting records based on: ● historical experience with our loans and those of peer banks; ● our evaluation of reasonable and supportable economic forecasts; ● consideration of the composition, including quality, mix and size of the overall loan portfolio; ● review of nonperforming loans and related reserve requirements ● expected timeline for repayment of existing loans, considering expected contractual cash flows in addition to expectations around prepayments; and ● evaluation of qualitative factors not given adequate consideration in the computation of quantitative reserves ​ The allowance for credit losses can be affected by changes in economic forecasts, especially national employment rates, gross national product, and housing price indices, changes in estimated loan prepayment speeds, actual levels of charge-offs, changes to the level of nonaccrual loans, and changes to management’s estimate of items not otherwise considered as part of the quantitative calculation of the allowance.
  • At any given date, we maintain an allowance for credit losses on loans that we believe is adequate to absorb specifically identified expected losses as well as any other losses of principal which are not expected to be collected over the contractual life of the loans, adjusted for expected prepayments.
  • Our mortgage warehouse portfolio could be volatile, and the income could be affected by changes to the difference between loan yields and wholesale funding costs.
  • At December 31, 2025, we had approximately $766.0 million in total commitments related to mortgage warehouse, and $518.3 million of loans outstanding.
  • The amount of mortgage warehouse loans outstanding represented 20.4% of our total loans outstanding as of December 31, 2025, and had increased from 14.0% of loans outstanding as of December 31, 2024.
  • Individual loans underlying the mortgage warehouse facilities are very short-term as we provide funding from the date the loan is originated until our customer can sell such loan to any number of mortgage buyers.
  • While we have expanded the number of products offered, as well as expanded geographically across the United States, the demand for mortgages can be volatile causing fluctuations in both balances and income.
  • Further, in order to best match the short-term nature of our mortgage warehouse facilities, we rely upon wholesale funding including brokered deposits, federal funds purchased, and secured borrowings from the FHLB or Federal Reserve Bank.
  • The cost of short-term wholesale fundings could change by an amount greater than or less than the related change in yield on mortgage warehouse loans, thus causing income compression.
  • Further, the availability of wholesale funding could decline causing rates to increase relative to the yield on mortgage warehouse loans.
  • Further, incentive programs have to be balanced between alignment with our growth goals and prudent risk management.
  • While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, including performing an internal audit of our enterprise risk framework, those techniques and the judgements that accompany their application may not be effective and may not anticipate all material economic and financial outcomes on the Company and its customers, or the specifics and timing of such outcomes.
  • If we determine the fair value of a reporting unit is less than its carrying amount using these quantitative factors, we must record a goodwill impairment charge based on that difference.
  • Models may be used to measure interest rate and other market risks, predicting or estimating losses, assessing capital adequacy, assisting with identifying compliance and fraud risk, as well as to estimate the value of financial instruments and balance sheet items.

and 39 more.

Gone since FY2024

  • Interest rates have flattened along the curve through 2024, but uncertainty about the magnitude and direction of future rate movements along the curve remains due primarily to inflation and jobs data.
  • Adverse developments, such as, continued interest rate volatility, inflation, tariffs, jobs market, health epidemics or pandemics (or expectations about them) interest rate volatility, international trade disputes, oil price volatility, the level of U.S. debt, including the debt ceiling (and the potential inability to raise the debt ceiling), and global economic conditions, could depress business and/or consumer confidence levels, negatively impact real estate values, and otherwise lead to economic weakness which could have one or more of the following undesirable effects on our business: ● a decrease in low-cost or noninterest bearing deposits; ● a slowing of demand for loans or other products and services offered by us; ● an inability to retain and recruit employees due to competition for labor; ● increased competition for loans or other earning assets; ● a decline in the value of our loans or other assets secured by real estate; ● a decline in the value of fixed-rate investment securities, which could lead to a reduction in capital due to declines in other comprehensive income/(loss); ● an increase in the reliance on wholesale funding; ● a credit impairment of our investment securities; or ● an increase in the number of borrowers who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to us, which in turn could result in higher levels of nonperforming assets, net charge-offs, and provisions for credit losses.
  • Fluctuations in interest rates can affect the demand of customers for products and services, and an increase in the general level of interest rates may adversely affect the ability of certain borrowers to make variable-rate or adjustable-rate loan payments.
  • The continued inversion of the shorter-end of the yield curve along with a relatively flat longer-end of the yield curve could further negative impact the Company’s earnings over time.
  • Rising interest rates since 2022 have decreased the value of the Company’s held-to-maturity and available-for-sale securities portfolio and certain fixed-rate loans and the Company would realize losses if it were required to sell such securities or loans to meet liquidity needs.
  • This is due to the fact that a considerable portion of our borrowers are involved in, or are impacted to some extent by, the agricultural industry.
  • In recent years, California experienced the worst drought in its recorded history, and it is difficult to predict if the drought will resume and if it does how long it might last.
  • The Company does not have direct exposure to oil producers, and our exposure via loans outstanding to borrowers involved in servicing oil companies totaled only $4.0 million at December 31, 2024.
  • Due to deposit declines from a higher rate environment, competition for deposits has become more fierce, and new deposits generally have a higher cost.
  • At December 31, 2024, the Bank estimates it had uninsured deposits of $816 million, or 28% of total deposits.
  • When coupled with many exempt positions remaining remote and/or hybrid work arrangements, this assists with recruiting talent we would not otherwise be able to attract.
  • For the year ended December 31, 2024, we had total net other comprehensive gains of $4.7 million, net of tax, primarily as a result of a decline in unrealized losses in our securities portfolio.
  • Approximately 78% of our loan portfolio at December 31, 2024, consisted of real estate loans.
  • However, the overall concentration of commercial real estate loans has been reduced significantly since peaking at December 31, 2020.
  • At December 31, 2024, 78.2% of our loan portfolio consisted of real estate loans, and a sizeable portion of the remaining loan portfolio had real estate collateral as a secondary source of repayment or as an abundance of caution.
  • Loans on commercial buildings represented approximately 58.2% of all real estate loans, while construction/development and land loans were 0.2%, loans secured by residential properties accounted for 16.4%, and loans secured by farmland were 3.3% of real estate loans.
  • The Company’s $19.7 million balance of nonperforming assets at December 31, 2024, is mostly comprised of one nonperforming operating line of credit collateralized with receivables from wine grape production and other assets.
  • Deterioration in real estate values might also further reduce the amount of loans the Company makes to businesses in the construction and real estate industry, which could negatively impact our organic growth prospects.
  • Our commercial real estate, including construction and land development exposes us to increased lending risks.
  • Commercial and agricultural real estate, construction and land development, and multi-family loans comprise approximately 61.9% of our total loan portfolio as of December 31, 2024, exposing the Company to certain risks if not properly managed overall and individually.
  • Our concentration of commercial real estate loans peaked at December 31, 2020, and the concentration to capital and allowance has declined from 376% to 236% since such date.
  • In the next three years, $62.0 million, or 29.7%, of our office real estate loans have the ability to reprice.
  • The potential inability of our borrowers to service debt at higher rates expose us to greater risk of loss.
  • At December 31, 2024, we had $178.3 million, or 7.6% of total loans, in commercial loans (including SBA loans and agricultural production loans but excluding mortgage warehouse loans).
  • At December 31, 2024, we established an allowance for estimated credit losses on loans in our accounting records based on: ● historical experience with our loans and those of peer banks; ● our evaluation of reasonable and supportable economic forecasts; ● consideration of the composition, including quality, mix and size of the overall loan portfolio; ● review of nonperforming loans and related reserve requirements ● expected timeline for repayment of existing loans, considering expected contractual cash flows in addition to expectations around prepayments; and ● evaluation of qualitative factors not given adequate consideration in the computation of quantitative reserves ​ The allowance for credit losses can be affected by changes in economic forecasts, especially national employment rates, gross national product, and housing price indices, changes in estimated loan prepayment speeds, actual levels of charge-offs, changes to the level of nonaccrual loans, and changes to management’s estimate of items not otherwise considered as part of the quantitative calculation of the allowance.
  • At any given date, we maintain an allowance for credit losses on loans that we believe is adequate to absorb specifically identified expected losses as well as any other losses of principal which is not expected to be collected over the contractual life of the loans, adjusted for expected prepayments.
  • While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, including performing an internal audit of our enterprise risk framework, those techniques and the judgements that accompany their application may not be effective and may not anticipate all material economic and financial outcome on the Company and its customers, or the specifics and timing of such outcomes.
  • If we determine that the fair value of a reporting unit is less than its carrying amount using these quantitative factors, we must record a goodwill impairment charge based on that difference.
  • Models may be used to measure interest rate and other market risks, predicting or estimating losses, assessing capital adequacy, assisting with identifying compliance risk, as well as to estimate the value of financial instruments and balance sheet items.
  • Section 1.05 Risks Related to our Growth Strategy Growing by acquisition entails integration and certain other risks, and our financial condition and results of operations could be negatively affected if our expansion efforts are unsuccessful, or we fail to manage our growth effectively.
  • In addition to organic growth and the establishment of de novo branches, we have also expanded through acquisitions of branches and whole institutions – most recently in 2018.
  • Those risks include, among others, incorrectly assessing the asset quality of a bank acquired in a particular transaction, encountering greater than anticipated costs in integrating acquired businesses, facing resistance from customers or employees, being unable to profitably deploy assets acquired in the transaction, and regulatory compliance risks.
  • To the extent we issue capital stock in connection with additional transactions, if any, these transactions and related stock issuances may have a dilutive effect on tangible book value per share.
  • Section 1.06 Legislative and Regulatory Risks We are subject to extensive government regulation that could limit or restrict our activities which may include crypto currency and legalized marijuana business activities, which in turn may adversely impact our ability to increase our assets and earnings .
  • For the year ended 2024 there were no increases in rates; however, there can be no assurance that the FDIC will not further increase assessment rates in the future or that the Bank will not be subject to higher assessment rates due to a change in its risk category, either of which could have an adverse effect on the Bank’s earnings.
  • In 2024, the Company recognized $5.5 million of income from overdraft fees, which could be impacted due to changes in the amount or method of how overdraft fees are charged.
  • Future acquisitions may dilute shareholder ownership and value, especially tangible book value per share.
  • At December 31, 2024, the holding company had $13.1 million in cash available.
  • While this cash is sufficient to cover cash flow needs over the course of the next several quarters the Company’s long-term ability to meet debt service requirements and pay dividends depends on the Bank’s ability to pay dividends to the Company, as the Company has no other source of significant income.
  • We are authorized to issue up to 24,000,000 shares of common stock, and as of December 31, 2024, we had 14,223,046 shares of common stock outstanding.

and 28 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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