SIERRA BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
96
11.
SUBORDINATED DEBENTURES
(Continued)
During the first quarter of 2004, Sierra Statutory Trust II issued 15,000 Floating Rate Capital Trust Pass-
Through Securities (TRUPS II), with a liquidation value of $1,000 per security, for gross proceeds of
$15,000,000. The entire proceeds of the issuance were invested by Trust II in $15,464,000 of
Subordinated Debentures issued by the Company, with identical maturity, re-pricing and payment terms as
the TRUPS II. The Subordinated Debentures, purchased by Trust II, represent the sole assets of the Trust
II. Those Subordinated Debentures mature on March 17, 2034, bear a current interest rate of 2.99%
(based on 3-month LIBOR plus 2.75%), with re-pricing and payments due quarterly.
Those Subordinated Debentures are currently redeemable by the Company, subject to receipt by the
Company of prior approval from the Federal Reserve Bank, on any March 17
th
, June 17
th
, September 17
th
,
or December 17
th
. The redemption price is par plus accrued and unpaid interest, except in the case of
redemption under a special event which is defined in the debenture.
The TRUPS II are subject to mandatory redemption to the extent of any early redemption of the related
Subordinated Debentures and upon maturity of the Subordinated Debentures on March 17, 2034.
Trust II has the option to defer payment of the distributions for a period of up to five years, as long as the
Company is not in default on the payment of interest on the Subordinated Debentures. The TRUPS II
issued in the offering were sold in private transactions pursuant to an exemption from registration under
the Securities Act of 1933, as amended. The Company has guaranteed, on a subordinated basis,
distributions and other payments due on the TRUPS II.
During the second quarter of 2006, Sierra Capital Trust III issued 15,000 Floating Rate Capital Trust Pass-
Through Securities (TRUPS III), with a liquidation value of $1,000 per security, for gross proceeds of
$15,000,000. The entire proceeds of the issuance were invested by Trust III in $15,464,000 of
Subordinated Debentures issued by the Company, with identical maturity, repricing and payment terms as
the TRUPS III. The Subordinated Debentures, purchased by Trust III, represent the sole assets of the
Trust III. Those Subordinated Debentures mature on September 23, 2036, bear a current interest rate of
1.63% (based on 3-month LIBOR plus 1.40%), with repricing and payments due quarterly.
Those Subordinated Debentures are redeemable by the Company, subject to receipt by the Company of
prior approval from the Federal Reserve Bank, on any March 23
rd
, June 23
rd
, September 23
rd
, or December
23
rd
. The redemption price is par plus accrued and unpaid interest, except in the case of redemption under
a special event which is defined in the debenture. The TRUPS III are subject to mandatory redemption to
the extent of any early redemption of the related Subordinated Debentures and upon maturity of the
Subordinated Debentures on September 23, 2036.
Trust III has the option to defer payment of the distributions for a period of up to five years, as long as the
Company is not in default on the payment of interest on the Subordinated Debentures. The TRUPS III
issued in the offering were sold in private transactions pursuant to an exemption from registration under
the Securities Act of 1933, as amended. The Company has guaranteed, on a subordinated basis,
distributions and other payments due on the TRUPS III.
