About Sierra Bancorp

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides a range of retail and commercial banking services. As of December 31, 2022, the company’s other subsidiaries were Sierra Statutory Trust II, Sierra Capital Trust III, and Coast Bancorp Statutory Trust II, which were formed solely to facilitate the issuance of capital trust pass-through securities. The company offers its services through branch offices located throughout California’s South San Joaquin Valley, the Central Coast, Ventura County, and neighboring communities. Its business activity included the establishment of an agricultural loan production office in April 2022. The bank maintains administrative offices, loan production offices, and full-service branches in various California locations. Complementing the bank’s stand-alone offices are specialized lending units, which include its Agricultural, SBA and Mortgage Warehouse lending divisions. The company also has automated teller machines (ATMs) at branch locations and non-branch locations. Furthermore, the bank is a member of the Allpoint network, which provides its deposit customers with surcharge-free access to ATMs across the United States, Puerto Rico, Mexico, Canada, Australia and the United Kingdom, and customers have access to electronic point-of-sale payment alternatives nationwide via the Pulse network. To ensure that account access preferences are addressed for all customers, the company provides various options, including an internet branch, which provides the ability to open deposit accounts online; an online banking option with bill-pay and mobile banking capabilities, including mobile check deposit; online lending solutions for consumers and small businesses; a customer service center that is accessible by toll-free telephone during business hours; and an automated telephone banking system that is generally accessible 24 hours a day, seven days a week. The company offers a variety of other banking products and services to complement and support its lending and deposit products, including remote deposit capture and payroll services for business customers. The company’s chief products and services relate to extending loans and accepting deposits. The company’s lending activities cover real estate, commercial (including small business), mortgage warehouse, agricultural, and consumer loans. The bulk of the company’s real estate loans are secured by commercial real estate, which includes both owner-occupied and non-owner occupied properties, including office, retail, and hotel/motels, but it also offers commercial construction loans, multifamily and agricultural credit facilities among other types of real estate loans. In addition to loans, the company offers a wide range of deposit products and services for individuals and businesses, including checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The bank’s deposit accounts are insured by the Federal Deposit Insurance Corporation (the FDIC) up to maximum insurable amounts. The company attracts deposits throughout its market area via referrals from existing customers, direct-mail campaigns, a customer-oriented product mix, and competitive pricing, and by offering convenient locations, drive-through banking, and various other delivery channels. Investment Portfolio As of December 31, 2022, the company’s investment portfolio included U.S. government agencies; mortgage-backed securities; state and political subdivisions; corporate bonds; and collateralized loan obligations. Regulation and Supervision As a bank holding company, the company is regulated under the Bank Holding Company Act of 1956 (the BHC Act), and is subject to supervision, regulation and inspection by the Board of Governors of the Federal Reserve System (the Federal Reserve Board). The company is also subject to certain provisions of the California Financial Code, which are applicable to bank holding companies. In addition, the company is under the jurisdiction of the Securities and Exchange Commission (SEC) and is subject to the disclosure and regulatory requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934, each administered by the SEC. The company is subject to the rules of Global Select market (Nasdaq) for listed companies. As a state-chartered bank, the bank is subject to broad federal regulation and oversight extending to all its operations by the Federal Deposit Insurance Corporation (FDIC) and to state regulation by the California Department of Financial Protection and Innovation (DFPI). The bank is also subject to certain regulations of the Federal Reserve Board. The bank is a member of the Federal Home Loan Bank (FHLB) system. Acquisitions by the bank are subject instead to the Bank Merger Act, which requires the prior approval of an acquiring bank’s primary federal regulator for any merger with or acquisition of another bank. Acquisitions by both the company and the bank also require the prior approval of the California Department of Financial Protection and Innovation (the DFPI) pursuant to the California Financial Code. The company and the bank are deemed to be ‘affiliates’ of each other and thus are subject to Sections 23A and 23B of the Federal Reserve Act, as well as related Federal Reserve Regulation W which impose both quantitative and qualitative restrictions and limitations on transactions between affiliates. The bank’s deposits are insured up to maximum applicable limits under the Federal Deposit Insurance Act (generally $250,000 per depositor), and the bank is subject to deposit insurance assessments to maintain the FDIC’s Deposit Insurance Fund (the DIF). The bank is subject to certain requirements and reporting obligations involving Community Reinvestment Act (CRA) activities. The bank recently received a ‘satisfactory’ CRA assessment rating in August 2022. The bank continues to be subject to numerous other federal and state consumer protection laws that extensively govern its relationship with its customers. Those laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Right to Financial Privacy Act, the Service Members Civil Relief Act, the Americans With Disabilities Act, and respective state-law counterparts to these laws, as well as state usury laws and laws regarding unfair and deceptive acts and practices. Under the Fair and Accurate Credit Transactions Act (the FACT Act), the bank is required to develop and implement a written Identity Theft Prevention Program to detect, prevent and mitigate identity theft ‘red flags’ in connection with certain existing accounts or the opening of certain accounts. The bank maintains a program to meet the requirements of the FACT Act and the bank is in compliance with these requirements. The bank expanded its Bank Secrecy Act compliance staff and intensified due diligence procedures concerning the opening of new accounts to fulfill the anti-money laundering requirements of the USA Patriot Act of 2001, and also implemented systems and procedures to identify suspicious banking activity and report any such activity to the Financial Crimes Enforcement Network. The company is subject to the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), which addresses, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. History Sierra Bancorp was founded in 1977. The company was incorporated in 2000.