1
PART I
ITEM 1. BUSINESS
General
The Company
Sierra Bancorp (the “Company”) is a California corporation headquartered in Porterville, California, and is a regis-
tered bank holding company under federal banking laws. The Company was formed to serve as the holding company
for Bank of the Sierra (the “Bank”), and has been the Bank’s sole shareholder since August 2001. The Company
exists primarily for the purpose of holding the stock of the Bank and of such other subsidiaries it may acquire or
establish. At the present time, the Company’s only other direct subsidiaries are Sierra Statutory Trust II and Sierra
Capital Trust III, which were formed in March 2004 and June 2006, respectively, solely to facilitate the issuance of
capital trust pass-through securities (“TRUPS”). Pursuant to the Financial Accounting Standards Board’s guidance
on the consolidation of variable interest entities, these trusts are not reflected on a consolidated basis in the financial
statements of the Company. References herein to the “Company” include Sierra Bancorp and its consolidated
subsidiary, the Bank, unless the context indicates otherwise. At December 31, 2014, the Company had consolidated
assets of $1.637 billion, gross loans of $971 million, deposits of $1.367 billion and shareholders’ equity of $187
million. The Company’s liabilities include $31 million in debt obligations due to Sierra Statutory Trust II and Sierra
Capital Trust III, related to TRUPS issued by those entities.
The Bank
The Bank is a California state-chartered bank headquartered in Porterville, California, which opened for business in
January 1978 and has since become the largest independent bank headquartered in the South San Joaquin Valley.
We offer a full range of retail and commercial banking services primarily in Tulare, Kern, Fresno, and Kings
Counties in Central California, and, in Southern California, in the rich agricultural corridor stretching from Santa
Paula to Santa Clarita. The Bank’s growth has primarily been organic, but includes two acquisitions: Sierra National
Bank in 2000, and Santa Clara Valley Bank (“SCVB”) in 2014. See the following section, Recent Developments, for
details on the SCVB acquisition.
Our chief products and services are related to the business of lending money and accepting deposits. The Bank’s
lending activities include real estate, commercial (including small business), mortgage warehousing, agricultural, and
consumer loans. The bulk of our real estate loans are secured by commercial, professional office, and agricultural
properties which are predominantly owner occupied, and we also offer a complete line of construction loans for
residential and commercial development, permanent mortgage loans, land acquisition and development loans, and
multifamily credit facilities. Secondary market services for residential mortgage loans are provided through the
Bank’s affiliations with Freddie Mac, Fannie Mae and certain non-governmental institutions. As of December 31,
2014, the percentage of our total loan and lease portfolio for each of the principal types of credit we extend was as
follows: (i) loans secured by real estate (72.6%); (ii) agricultural production loans (2.9%); (iii) commercial and indus-
trial loans and leases (including SBA loans and direct finance leases) (11.7%); (iv) mortgage warehouse loans
(10.9%); and (v) consumer loans (1.9%). Interest, fees, and other income on real-estate secured loans, which is by far
the largest segment of our portfolio, totaled $33.5 million, or 49% of net interest plus other income in 2014, and
$31.2 million, or 48% of net interest plus other income in 2013.
In addition to loans, we offer a wide range of deposit products 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. We have also been in the Certificate of Deposit Account Registry Service (“CDARS”) network
since its inception, and through CDARS are able to offer full FDIC insurance coverage on multi-million dollar
deposits up to specified limits. We attract deposits throughout our market area with direct-mail campaigns, a
customer-oriented product mix, competitive pricing, convenient locations, drive-through banking, and a multitude of
alternative delivery channels, and we strive to retain our deposit customers by providing a consistently high level of
service. At December 31, 2014 we had 99,200 deposit accounts totaling $1.367 billion, compared to 95,700 deposit
accounts totaling $1.174 billion at December 31, 2013.
