Executive Summary

Q3 2025 EPS of $0.72 missed S&P Global consensus $0.784, and “total revenue” (S&P bank convention: NII after provision + noninterest income) of $36.34m missed $39.57m, as provision for credit losses rose to $3.7m tied to a single ag production loan; NIM expanded to 3.78% and efficiency improved to 58.1% . EPS, revenue estimates and counts from S&P Global: see table and note below.*
Asset quality trends were broadly stable-to-better: NPL ratio fell to 0.56%; ACL rose to $25.2m with specific reserve coverage on the idiosyncratic ag exposure; noninterest-bearing deposits increased to 36.6% of total .
Balance sheet grew: gross loans +$57.2m q/q to $2.49B (9% annualized), driven by mortgage warehouse lines; total deposits fell $41.7m as the bank proactively reduced $55m of higher-cost brokered deposits, improving mix and cost of funds to 1.45% .
Capital return: quarterly $0.25 dividend (107th consecutive) and a new 1,000,000-share repurchase authorization to run Nov 2025–Oct 2026 (10b5-1 enabled) provide ongoing buyback support .

What Went Well and What Went Wrong

What Went Well
- Margin and efficiency improved: NIM 3.78% (+10 bps q/q) and efficiency 58.05% (from 59.43%); net interest income rose 4% q/q to $32.0m on better asset yields and lower funding costs .
- Core funding quality: noninterest-bearing deposits rose to 36.6% of total; cost of funds declined to 1.45% (down 4 bps q/q) .
- Management tone constructive and focused on execution: “we… increased earnings per share over the same period in 2024 while improving both margin and efficiency… and… a high level of noninterest income relative to peers” .
What Went Wrong
- Credit costs: provision for loan losses jumped to $3.7m (vs $1.2m Q2/Q3’24) due to a $3.5m specific reserve on a single ag production loan in the wine-grape industry; S&P “revenue” therefore fell short of consensus .
- YoY earnings pressure: net income declined 9% YoY to $9.7m despite higher NII, reflecting higher provision and higher salaries/occupancy expenses; noninterest expense +$0.8m YoY .
- Deposit totals declined $41.7m q/q (despite +$13.3m increase in customer deposits) as management intentionally reduced $55m of brokered deposits; total assets also down modestly q/q to $3.71B .

Financial Results

Quarterly performance (oldest → newest)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Income ($m)	$10.60	$9.10	$10.63	$9.70
Diluted EPS ($)	$0.74	$0.65	$0.78	$0.72
Net Interest Income ($m)	$30.79	$30.11	$30.65	$31.97
Provision for Credit Losses - Loans ($m)	$1.24	$1.96	$1.21	$3.71
Total Noninterest Income ($m)	$7.79	$6.64	$8.55	$8.06
Total Noninterest Expense ($m)	$22.81	$22.42	$23.77	$23.64
Net Interest Margin (%)	3.66%	3.74%	3.68%	3.78%
Efficiency Ratio (tax-equivalent) (%)	58.38%	60.62%	59.43%	58.05%
ROAA (%)	1.14%	1.02%	1.16%	1.04%
ROAE (%)	11.95%	10.44%	12.08%	10.81%

Results vs S&P Global consensus (Q3 2025)

Metric	Actual	Consensus	Surprise
Total Revenue ($)	$36.34m*	$39.57m*	bold Miss: -$3.23m (≈-8%)
Diluted EPS ($)	$0.72*	$0.784*	bold Miss: -$0.064 (≈-8%)
Estimate Count (Revenue / EPS)	4* / 5*	—	—

Note: S&P’s “Total Revenue” for banks is Net Interest Income after provision + Noninterest Income; Q3’25: $28.28m + $8.06m = $36.34m, aligning with S&P actuals . EPS and revenue estimates/actuals and counts are from S&P Global; values marked with an asterisk are retrieved from S&P Global.*

Balance sheet and asset quality (period-end)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Assets	$3.70B	$3.61B	$3.77B	$3.71B
Loans (net of fees)	$2.32B	$2.31B	$2.43B	$2.49B
Total Deposits	$2.96B	$2.85B	$2.97B	$2.93B
Noninterest-bearing Deposits (% of total)	34.22%	36.42%	35.83%	36.58%
Cost of Funds (%)	1.72%	1.46%	1.49%	1.45%
NPLs / Gross Loans (%)	0.45%	0.79%	0.62%	0.56%
ACL on Loans ($m)	$22.71m	$27.05m	$21.68m	$25.18m
TCE Ratio (consolidated) (%)	9.01%	9.05%	8.77%	9.03%

KPIs and business mix highlights

KPI	Q3 2025
Loan Growth (q/q)	+$57.2m gross loans; +9% annualized
Mortgage Warehouse Lines (end balance)	$452.7m
Cost of Average Deposits / Cost of Funds	1.30% / 1.45%
Liquidity Sources (primary + secondary)	$2.19B
Dividend per common share	$0.25 (to be paid Nov 14, 2025)
Shares Repurchased (Q3)	190,342 at $30.55 avg price

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q4 2025 payout (declared Oct 2025)	$0.25 (Q2 2025)	$0.25 payable Nov 14, 2025	Maintained
Share repurchase authorization	Nov 1, 2025 – Oct 31, 2026	Prior 1,000,000-share program expiring Oct 31, 2025	New 1,000,000 shares authorized; 10b5-1 plan permitted	Renewed/extended

The company does not provide quantitative forward guidance for revenue/EPS/margins; management commentary emphasized margin and efficiency improvement and balance sheet strength .

Earnings Call Themes & Trends

Note: We did not find a Q3 2025 earnings call transcript in the document set; themes below reflect sequential press-release narratives.

Topic	Previous Mentions (Q1 2025, Q2 2025)	Current Period (Q3 2025)	Trend
Net Interest Margin and Efficiency	NIM rose to 3.74% in Q1; efficiency improved to 60.62% . Q2 NIM 3.68%; efficiency 59.43% .	NIM 3.78%; efficiency 58.05% .	Improving through 2025.
Credit Costs / Ag Exposure	Q1 provision $2.0m; higher specific reserves; ag wine grape credit discussed . Q2 provision $1.2m; $5.3m prior allowance charge-off .	Q3 provision $3.7m; $3.5m specific reserve on single ag production loan; remaining $19.2m wine/grape loans not criticized .	Idiosyncratic; contained outside single name.
Mortgage Warehouse	Q1 utilization declined $43.2m (seasonal) . Q2 utilization +$118.7m; lines $401.9m .	Lines $452.7m; utilization 59.4% .	Re-accelerating through mid/late 2025.
Deposit Mix/Uninsured	Q1: NIBD to 36.4%; uninsured ~28% . Q2: NIBD 35.8%; uninsured ~26% .	NIBD 36.6%; uninsured ~26%; proactive brokered deposit reduction .	Stable/positive mix.
Capital Return	Q1 repurchased 476,770 shares; dividend $0.25 . Q2 repurchased 135,641 shares; dividend $0.25 .	Repurchased 190,342 shares; dividend $0.25; new 1,000,000-share authorization .	Ongoing.
Tax Rate	Q1 ETR 25.8% with credit/TEI dynamics . Q2 ETR 25.3% .	Q3 ETR 23.6% .	Slightly lower QoQ.

Management Commentary

CEO tone on execution and outlook: “we increased earnings per share over the same period in 2024 while improving both margin and efficiency… We also continue to have a high level of noninterest income relative to peers… believe our team and our balance sheet give us reasons to look forward to 2026 and beyond” .
Focus on disciplined funding and liquidity: cost of funds improvement (1.45%) with strong liquidity sources of $2.19B .
Asset quality approach: specific reserving against the single ag exposure and continued stability outside that credit; CRE coverage ratio ≥1.18% and allowance ex-warehouse at 1.21% .

Q&A Highlights

We did not locate a Q3 2025 earnings call transcript in the available documents; therefore, Q&A highlights and any clarifications given on the call are unavailable in this recap.

Estimates Context

Q3 2025 EPS of $0.72 missed S&P Global consensus of $0.784 on a higher provision ($3.7m) driven by a single ag production reserve; consensus EPS based on 5 estimates.*
S&P’s bank “Total Revenue” of $36.34m missed $39.57m consensus (4 estimates).* The variance is explained by higher provision (S&P revenue is NII after provision + noninterest income), which offsets NIM-led NII growth .
Target price consensus mean: $32.75 (4 estimates).*
Where estimate dispersion matters: noninterest income showed modest upside YoY ($+0.3m) with BOLI/deferred comp offsets; estimate revisions may focus on the ag-specific reserve cadence and NIM trajectory .

Values marked with an asterisk are retrieved from S&P Global.*

Key Takeaways for Investors

Core pre-provision earnings trajectory is constructive: NIM up to 3.78% and efficiency to 58.05% with NII +4% q/q despite balance sheet mix shifts .
EPS and “revenue” misses are provision-driven and tied to one ag loan; outside that, asset quality remains stable with NPLs at 0.56% and coverage maintained/increased through specific reserves .
Funding mix improved: brokered deposits reduced by $55m; NIBD up to 36.6%; cost of funds fell to 1.45%—supportive for 2026 margin setup if rates stabilize/fall .
Mortgage warehouse re-acceleration continues (to $452.7m), adding earning asset lift while carrying a low ACL rate (0.11%) historically associated with nominal losses .
Capital return remains a meaningful support: $0.25 dividend and a fresh 1,000,000-share repurchase authorization through Oct 2026 provide downside support and EPS accretion .
Watch list: provisioning cadence on ag/wine-grape exposure, CRE concentration (242.7% regulatory ratio), and expense discipline as management executes a reorganization (severance recognized) .

Appendix: Additional data points and context

Efficiency and pre-provision income: pre-tax, pre-provision income improved to $16.4m (+$0.6m YoY) .
Liquidity stack details: Unpledged securities ($487.7m), FHLB capacity ($623.8m), unsecured lines ($460.8m), Fed window ($266.4m) .
CRE concentration ratio (regulatory) 242.7% (declined slightly q/q) .
Dividend continuity: 107th consecutive quarterly dividend approved; payable Nov 14, 2025 .

SIERRA BANCORP (BSRR)·Q3 2025 Earnings Summary