Sierra Bancorp Announces Quarterly and Year to Date Earnings
October 25, 2021
- Completed $50.0 million issuance of ten-year fixed-to-floating subordinated debentures at 3.25% during the quarter.
- Net income for the first nine months of 2021 increased $6.9 million, or 26%, as compared to the same period in 2020.
- Return on average assets for the first nine months of 2021 improved to 1.36%, as compared to 1.26% for the same period in 2020.
- Deposit growth of $44.7 million, or 2%, during the third quarter of 2021 and $196.0 million, or 7%, for the first nine months of 2021.
PORTERVILLE, Calif –(BUSINESS WIRE) – Sierra Bancorp (Nasdaq: BSRR), parent of Bank of the Sierra, today announced its unaudited financial results for the three- and nine-month periods ended September 30, 2021. Sierra Bancorp reported consolidated net income of $10.6 million, or $0.69 per diluted share, for the third quarter of 2021, compared to $10.4 million, or $0.67 per diluted share in the third quarter of 2020.
For the first nine months of 2021, the Company recognized net income of $33.4 million, or $2.17 per diluted share, as compared to $26.5 million, or $1.73 per diluted share, for the same period in 2020. The Company’s financial performance metrics for the first nine months of 2021 include an annualized return on average assets and a return on average equity of 1.36% and 12.60%, respectively, compared to 1.26% and 10.90%, respectively, for the same period in 2020.
“The most effective way to do it, is to do it.” Amelia Earhart
“We are proud of our robust earnings in the third quarter, which helped the Bank achieve its strongest net income for a nine-month period in its history,” stated Kevin McPhaill, President and CEO. “Our continued efforts in both core deposit and diversified earning asset generation during 2021 have led to overall balance sheet growth. This success is a result of our banking team’s determination and perseverance. We are excited and ready for opportunities in the fourth quarter and next year!” McPhaill concluded.
Quarterly Changes (comparisons to the third quarter of 2020)
- Net income increased $0.3 million to $10.6 million, primarily due to a $0.6 million negative provision for loan and lease losses in the third quarter of 2021 as compared to a provision for loan and lease losses of $2.35 million for the same period in 2020. Compared to 2020, this decrease in provision is attributable to the impact of continued improvements in the overall economy and lower uncertainty, a reduction in historical loss rates, a decline in specific reserves on impaired loans, net loan recoveries in 2021, a change in the mix of loans, and lower outstanding balances of net loans and leases.
Sierra Bancorp Financial Results October 25, 2021 Page 2
- Net interest income decreased by $1.4 million mostly due to a 54 bps decline in the yield on earning assets and a shift in mix due to higher levels of cash invested overnight with the Federal Reserve Bank.
- Noninterest income increased $0.4 million or 6% primarily due to increases in checkcard interchange fees from increased usage.
- Noninterest expense increased by $1.6 million, due mostly to a $0.9 million increase in salaries, a $0.4 million increase in checkcard processing costs, and a $0.5 million increase in legal expenses.
Year to-Date Changes (comparisons to the first nine-months of 2020)
- Net income increased $6.9 million, or 26%. The most significant line-item changes were a $8.8 million decrease in the provision for loan and lease losses, and an increase of $6.5 million or 8% in net interest income, due mostly to higher average loan balances and a continued favorable deposit mix.
- Noninterest income increased by $0.9 million, or 4%, due to checkcard interchange fees, increases in BOLI income, and increases in the fair market value of equity securities partially offset by the fact that the third quarter of 2020 had certain nonrecurring gains on the sales of investments, and other assets that did not reoccur in the third quarter of 2021.
- Noninterest expense increased $6.2 million, or 11% due mostly to the increases in salary expense, data processing, checkcard processing costs and professional services expense.
Balance Sheet Changes (comparisons to December 31, 2020)
- Total assets increased by $222.0 million, or 7%, to $3.4 billion, during the first nine months of the year.
- Cash and due from banks increased $350.9 million, to $422.4 million during the first nine months of the year due mostly to higher deposit balances coupled with lower loan balances.
- Investment securities increased 35% to $732.3 million primarily due to bond purchases.
- Gross loans declined $323.3 million due predominantly to a $181.2 million decline in mortgage warehouse line utilization, a $63 million decline in real estate loans mostly due to lower commercial real estate and construction loan balances, and a $76.8 million decrease in commercial and industrial loans, which was mostly Small Business Administration Paycheck Protection Program (“SBA PPP”) loan forgiveness.
- Deposits totaled $2.8 billion at September 30, 2021, representing a year-to-date increase of $196.0 million, or 7%. The growth in deposits came primarily from core transaction and savings accounts, while higher-cost time and wholesale brokered deposits decreased.
- Long-term debt increased to $49.2 million from the issuance of $50 million in ten year 3.25% fixed to floating subordinated notes.