Sierra Bancorp Announces Record Quarterly and Year to Date Earnings
July 19, 2021
- Record net income of $11.7 million and $22.8 million for the three and six months ended 6/30/2021, respectively, compared to $8.3 million and $16.1 million for the three and six months ended 6/30/2020.
- Return on average assets improved to 1.42% for the second quarter of 2021, as compared to 1.19% for the same quarter in 2020, and 1.40% for the prior linked quarter.
- Return on average equity increased to 13.29% for the second quarter of 2021, as compared to 10.30% for the same quarter of 2020 and 12.94% for the prior linked quarter.
- Core non-maturity deposits increased by $52.5 million, or 2.2%, during the second quarter of 2021 and have increased by $283.4 million, or 13.4%, during the first six 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 six-month periods ended June 30, 2021. Sierra Bancorp reported consolidated net income of $11.7 million, or $0.76 per diluted share, for the second quarter of 2021, compared to $8.3 million, or $0.54 per diluted share, in the second quarter of 2020.
For the first six months of 2021, the Company recognized net income of $22.8 million as compared to $16.1 million for the same period in 2020. The Company’s financial performance metrics for the first half of 2021 include an annualized return on average equity of 13.11%, a return on average assets of 1.41%, and diluted earnings per share of $1.48.
“We are pleased to report another quarter of record earnings!” stated Kevin McPhaill, President and CEO. “Our strong results in the second quarter of 2021 are thanks to the continued hard work and persistence of our banking team. While we anticipate headwinds during the second half of this year due to historically low interest rates and competitive pressures, our core earnings engine remains strong, and our team is committed to meeting these challenges. We will continue to look for additional opportunities and we are excited about the future of Bank of the Sierra!” McPhaill concluded.
Quarterly Changes (comparisons to the second quarter of 2020)
- The change in quarterly net income was primarily due to a $2.1 million negative provision for loan and lease losses. This significant decrease is attributable to the impact of continued improvements in the overall economy, lower historical loss rates, net recoveries during the past two quarters, and a $272.7 million decrease in average balances of net loans and leases.
- Net interest income increased $3.0 million, or 13%, due primarily to increases in average loan balances and a lower cost of funds.
Year to-Date Changes (comparisons to the first six-months of 2020)
- Net income increased by $6.7 million due mostly to a $1.9 million negative provision for loan and lease losses, attributed to the same reasons as noted above in the quarterly comparison.
Sierra Bancorp Financial Results July 19, 2021 Page 2
- Net interest income increased by $7.8 million, or 16%, as declines in loan yields were offset by higher balances and lower interest expense.
- The above year-to-date increases were partially offset by an increase in noninterest expense of $4.7 million, or 13%, due mostly to a $2.1 million increase in salaries and benefits, $1.4 million in professional services, and $0.8 million in data processing expenses.
Balance Sheet Changes (comparisons to December 31, 2020)
- Total assets increased to $3.3 billion, representing an increase of $51.3 million, or 2%, during the first half of the year.
- Cash and due from banks increased 424% to $373.9 million during the first six months of the year due mostly to higher deposit balances coupled with lower loan balances.
- Gross loans declined $318.3 million due predominantly to a $157.3 million decline in mortgage warehouse line utilization, a $100 million decline in real estate loans mostly due to lower commercial real estate balances, and a $58.4 million decrease in commercial and industrial loans, which was mostly PPP loan forgiveness.
- Deposits totaled $2.8 billion at June 30, 2021, representing a year-to-date increase of $151.3 million, or 6%. The growth in deposits came primarily from core transaction and savings accounts, while higher-cost time deposits decreased.