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The holders of our debentures have rights that are senior to those of our shareholders.
In 2004 we issued
$15,464,000 of junior subordinated debt securities due March 17, 2034, and in 2006 we issued an additional
$15,464,000 of junior subordinated debt securities due September 23, 2036 in order to supplement regulatory capital.
These junior subordinated debt securities are senior to the shares of our common stock. As a result, we must make
interest payments on the debentures before any dividends can be paid on our common stock, and in the event of our
bankruptcy, dissolution or liquidation, the holders of debt securities must be paid in full before any distributions may
be made to the holders of our common stock. In addition, we have the right to defer interest payments on the junior
subordinated debt securities for up to five years, during which time no dividends may be paid to holders of our common
stock. In the event that the Bank is unable to pay dividends to us, we may be unable to pay the amounts due to the
holders of the junior subordinated debt securities and thus would be unable to declare and pay any dividends on our
common stock.
Provisions in our articles of incorporation could delay or prevent changes in control of our corporation or our
management.
Our articles of incorporation contain provisions for staggered terms of office for members of the board
of directors; no cumulative voting in the election of directors; and the requirement that our board of directors consider
the potential social and economic effects on our employees, depositors, customers and the communities we serve as
well as certain other factors, when evaluating a possible tender offer, merger or other acquisition of the Company.
These provisions make it more difficult for another company to acquire us, which could cause our shareholders to lose
an opportunity to be paid a premium for their shares in an acquisition transaction and reduce the current and future
market price of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
The Company’s administrative headquarters is in a 37,000 square foot, three-story office building located at 86 North
Main Street, Porterville, California, and our main office consists of a one-story brick building located at 90 N. Main
Street, Porterville, California, adjacent to our administrative headquarters. Both of those buildings are situated on
unencumbered property owned by the Company. The Company also owns unencumbered property on which 15 of our
other offices are located, namely the following branches: Porterville West Olive, Bakersfield Ming, California City,
Dinuba, Exeter, Farmersville, Fresno Shaw, Hanford, Lindsay, Santa Paula, Tehachapi Downtown, Tehachapi Old
Town, Three Rivers, Tulare, and Visalia Mooney. The remaining branches as well as our loan production office,
technology center, and six remote ATM locations are leased from unrelated parties. While limited branch expansion is
planned, management believes that existing back-office facilities are adequate to accommodate the Company’s opera-
tions for the immediately foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
From time to time the Company is a party to claims and legal proceedings arising in the ordinary course of business.
After taking into consideration information furnished by counsel to the Company as to the current status of these claims
or proceedings to which the Company is a party, management is of the opinion that the ultimate aggregate liability
represented thereby, if any, will not have a material adverse effect on the financial condition of the Company.
ITEM 4. RESERVED
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) Market Information
Sierra Bancorp’s Common Stock trades on the NASDAQ Global Select Market under the symbol BSRR, and the CUSIP
number for our stock is #82620P102. Trading in the Company’s Common Stock has not consistently occurred in high
volumes, and such trading activity cannot always be characterized as constituting an active trading market.