Note 12 - Borrowings and Other Arrangements |
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| Debt Disclosure [Text Block] |
Note 12 – Borrowings and Other Arrangements
Repurchase Agreements – Repurchase agreements represent “sweep accounts,” where commercial deposit balances above a specified threshold are transferred at the close of each business day into separate non-deposit accounts. Customers use balances of the non-deposit accounts to purchase government bonds from the Company daily, subject to an agreement from the Company to repurchase such securities the next business day. Repurchase agreements totaled $113.1 million at September 30, 2026, relative to a balance of $130.9 million at December 31, 2025.
Long-Term Debt – The Company has long-term debt in the form of fixed to floating rate subordinated debentures with a fixed rate of 3.25% until September 30, 2026, then floating rate at 253.5 basis points over 3-month term Secured Overnight Financing Rate (“”) until maturity on October 1, 2031. The balance of the Company’s long-term debt, net of unamortized issuance costs, was $49.6 million at September 30, 2026, and $49.5 million at December 31, 2025.
Subordinated Debentures – Sierra Statutory Trust II (“Trust II”), Sierra Capital Trust III (“Trust III”), and Coast Bancorp Statutory Trust II (“Trust IV”) (collectively, the “Trusts”) exist solely for the purpose of issuing trust preferred securities fully and are unconditionally guaranteed by the Company. For financial reporting purposes, the Trusts are not consolidated, and the Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Subordinated Debentures”) held by the Trusts and issued and guaranteed by the Company are reflected in the Company’s consolidated balance sheet in accordance with provisions of ASC Topic 810. Trust preferred securities are variable rate instruments which were benchmarked against the London Interbank Offered Rate (LIBOR) plus a spread until LIBOR was phased out on June 30, 2023. These instruments are benchmarked against the SOFR, effective June 30, 2023. At September 30, 2026, and December 31, 2025, the Company’s trust-preferred securities totaled $36.2 million and $36.0 million, respectively.
The following table summarizes the Company’s other borrowings as of September 30, 2026, and December 31, 2025:
The Company has established secured and unsecured lines of credit under which it may borrow funds from time to time on a term or overnight basis from the FHLB, FRB, and other correspondent banks.
Federal Funds Purchased – The Company had unsecured lines of credit with its correspondent banks which, in the aggregate, amounted to $511.8 million at September 30, 2026, and $250.8 million at December 31, 2025, at fixed interest rates which vary with market conditions. There were no outstanding overnight balances under these lines of credit at September 30, 2026, and $210.0 million at December 31, 2025.
Secured FHLB Borrowings – At September 30, 2026, and December 31, 2025, the Company had secured available lines of credit with the FHLB totaling $604.3 million and $629.5 million, respectively, based on eligible collateral of certain loans and investment securities. There were no borrowings outstanding against these lines at September 30, 2026, and $12.7 million outstanding at December 31, 2025.
Federal Reserve Line of Credit – The Company has an available line of credit with the FRB of San Francisco secured by certain loans and investments. At September 30, 2026, and December 31, 2025, the Company had borrowing capacity under this line totaling $212.9 million and $254.9 million, respectively. The Company had outstanding borrowings of $17.0 million and on this line of credit as of September 30, 2026, and December 31, 2025, respectively.
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