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With respect to commercial bank competitors, the business is dominated by a relatively small number of major banks
that operate a large number of offices within our geographic footprint. Based on June 30, 2015 FDIC market share data
for the 20 cities within which the Company maintains branches, the largest portion of deposits belongs to Wells Fargo
Bank with 23.4% of total combined deposits, followed by Bank of America (16.2%), JPMorgan Chase (8.4%), Union
Bank (6.7%), and Bank of the West (6.2%). Bank of the Sierra ranks sixth on the 2015 market share list with 5.6% of
total deposits. In Tulare County, however, where the Bank was originally formed, we rank first for deposit market
share with 19.6% of total deposits and have the largest number of branch locations (12, including our online branch).
The larger banks noted above have, among other advantages, the ability to finance wide-ranging advertising campaigns
and to allocate their resources to regions of highest yield and demand. They can also offer certain services that we do
not provide directly but may offer indirectly through correspondent institutions, and by virtue of their greater capitali-
zation those banks have legal lending limits that are substantially higher than ours. For loan customers whose needs
exceed our legal lending limits, we typically arrange for the sale, or participation, of some of the balances to financial
institutions that are not within our geographic footprint.
In addition to other banks, our competitors include savings institutions, credit unions, and numerous non-banking
institutions such as finance companies, leasing companies, insurance companies, brokerage firms, asset management
groups, mortgage banking firms and internet-based companies. Technological innovations have lowered traditional
barriers of entry and enabled many of these companies to offer services that previously were considered traditional
banking products, and we have witnessed increased competition from companies that circumvent the banking system
by facilitating payments via the internet, wireless devices, prepaid cards, and other means.
Strong competition for deposits and loans among financial institutions and non-banks alike affects interest rates and
other terms on which financial products are offered to customers. Mergers between financial institutions have created
additional pressures within the industry to remain competitive by streamlining operations, reducing expenses, and
increasing revenues. Competition is also impacted by federal and state interstate banking laws which permit banking
organizations to expand into other states. The relatively large California market has been particularly attractive to out-
of-state institutions.
For years we have countered rising competition by offering a broad array of products with flexibility in structure and
terms that cannot always be matched by our competitors. We also offer our customers community-oriented, personal-
ized service, and rely on local promotional activity and personal contact by our employees. As noted above, layered
onto our traditional personal-contact banking philosophy are technology-driven initiatives that improve customer access
and convenience.
Employees
As of December 31, 2015 the Company had 352 full-time and 79 part-time employees. On a full-time equivalent basis
staffing stood at 417 at December 31, 2015, down slightly from 420 at December 31, 2014.
Regulation and Supervision
Banks and bank holding companies are heavily regulated by federal and state laws and regulations. Most banking
regulations are intended primarily for the protection of depositors and the deposit insurance fund and not for the benefit
of shareholders. The following is a summary of certain statutes, regulations and regulatory guidance affecting the
Company and the Bank. This summary is not intended to be a complete explanation of such statutes, regulations and
guidance, all of which are subject to change in the future, nor does it fully address their effects and potential effects on
the Company and the Bank.
Regulation of the Company Generally
The Company is a legal entity separate and distinct from the Bank and its other subsidiaries. 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 Federal Reserve Board. The Company is also under the jurisdiction of
the 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’s common stock is listed on the NASDAQ Global
Select market (“NASDAQ”) under the trading symbol “BSRR” and the Company is, therefore, subject to the rules of
NASDAQ for listed companies.