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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Sierra Bancorp | NASDAQ:BSRR | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.14 | -0.48% | 29.04 | 11.68 | 46.68 | 29.345 | 28.83 | 28.83 | 22,017 | 21:30:00 |
From Mar 2024 to Mar 2025
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, 2024. Sierra Bancorp reported consolidated net income of $10.3 million, or $0.71 per diluted share, for the second quarter of 2024, compared to $9.9 million, or $0.67 per diluted share, in the second quarter of 2023. On a linked-quarter (three months ended March 31, 2024) basis, the Company reported an increase of $0.9 million, or 10%, in net income.
Highlights for the second quarter of 2024:
“In any team sport, the best teams have consistency and chemistry.” Roger Staubach
“We are excited to share our strong second quarter results! The solid improvements achieved in the past two quarters demonstrate our balanced commitment to both our communities and shareholders as we complement growth with a focus on balance sheet strategy in a challenging interest rate environment,” stated Kevin McPhaill, CEO and President. “Our expanding and diversified banking teams continue to strengthen existing customer relationships while also bringing new relationships to the Bank. We are proud of our results for the first half of 2024 and believe that building this foundation will enable us to continue providing both exemplary service to our customers and strong and consistent returns for our shareholders,” concluded Mr. McPhaill.
For the first six months of 2024, the Company recognized net income of $19.6 million, or $1.35 per diluted share, as compared to $18.7 million, or $1.26 per diluted share, for the same period in 2023, a 5% increase. The Company's improved financial performance metrics for the first half of 2024 include a return on average assets of 1.10%, and net interest margin of 3.66%, as compared to a return on average assets of 1.02%, and a net interest margin of 3.43% for the same period in 2023.
Quarterly Income Changes (comparisons to the second quarter of 2023)
Linked Quarter Income Changes (comparisons to the three months ended March 31, 2024)
Year-to-Date Income Changes (comparisons to the first six-months of 2023)
Balance Sheet Changes (comparisons to December 31, 2023)
Other financial highlights are reflected in the following table.
FINANCIAL HIGHLIGHTS
(Dollars in Thousands, Except Per Share Data, Unaudited)
As of or for the
As of or for the
three months ended
six months ended
6/30/2024
3/31/2024
6/30/2023
6/30/2024
6/30/2023
Net income
$
10,263
$
9,330
$
9,919
$
19,593
$
18,670
Diluted earnings per share
$
0.71
$
0.64
$
0.67
$
1.35
$
1.26
Return on average assets
1.14
%
1.06
%
1.07
%
1.10
%
1.02
%
Return on average equity
11.95
%
11.09
%
13.06
%
11.52
%
12.30
%
Net interest margin (tax-equivalent) (1)
3.69
%
3.62
%
3.39
%
3.66
%
3.43
%
Yield on average loans
5.16
%
4.89
%
4.74
%
5.03
%
4.62
%
Yield on investments
5.58
%
5.59
%
5.02
%
5.57
%
4.88
%
Cost of average total deposits
1.53
%
1.38
%
1.09
%
1.46
%
0.96
%
Cost of funds
1.67
%
1.58
%
1.50
%
1.62
%
1.32
%
Efficiency ratio (tax-equivalent) (1) (2)
59.15
%
65.97
%
62.27
%
62.51
%
63.53
%
Total assets
$
3,681,202
$
3,553,072
$
3,762,461
$
3,681,202
$
3,762,461
Loans net of deferred fees
$
2,234,816
$
2,157,078
$
2,094,464
$
2,234,816
$
2,094,464
Noninterest demand deposits
$
986,927
$
968,996
$
1,066,498
$
986,927
$
1,066,498
Total deposits
$
2,942,410
$
2,847,004
$
2,918,759
$
2,942,410
$
2,918,759
Noninterest-bearing deposits over total deposits
33.5
%
34.0
%
36.5
%
33.5
%
36.5
%
Shareholders' equity / total assets
9.5
%
9.7
%
8.2
%
9.5
%
8.2
%
Tangible common equity ratio (2)
8.8
%
9.0
%
7.5
%
8.8
%
7.5
%
Book value per share
$
24.19
$
23.56
$
20.90
$
24.19
$
20.90
Tangible book value per share (2)
$
22.24
$
21.61
$
18.93
$
22.24
$
18.93
Community bank leverage ratio
11.6
%
11.6
%
10.8
%
11.6
%
10.8
%
Tangible common equity ratio (bank only) (2)
10.6
%
10.6
%
9.3
%
10.6
%
9.3
%
(1)
Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(2)
See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures".
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income was $30.2 million for the second quarter of 2024, a $1.9 million increase, or 7% over the second quarter of 2023. This increase in interest income for the quarterly comparison was due primarily to an increase in interest income on loans for $4.2 million, augmented by a $0.8 million decrease in interest expense due to the reduction in borrowed funds facilitated by a balance sheet restructuring, partially offset by a related decline in interest income on investments of $1.6 million, or 10%, due to the sale of low yielding investments.
For the second quarter of 2024, although the balance of average interest-earning assets was $106.2 million lower, the yield was 71 basis points higher as compared to the same period in 2023. There was a 23 basis point increase in the cost of our interest-bearing liabilities for the same period, which offset some of the higher yields on the asset side.
Net interest income for the comparative year-to-date periods increased $2.4 million, due to the strategic decision to change the mix on interest earning assets, selling off lower yielding bonds in the fourth quarter of 2023, and first quarter of 2024, moderated by an increase in interest rates paid on interest-bearing liabilities. There was a $112.5 million, or 6%, increase in average loan and lease balances yielding 41 basis points higher for the same period, while average investment balances decreased $229.1 million, yielding 69 basis points higher for the same period. Average interest-bearing liabilities decreased $83.7 million, mostly in borrowed funds. The cost of interest-bearing liabilities was 41 basis points higher for the comparative periods. The favorable net impact of the mix and rate change was a 23 basis point increase in our net interest margin for the six-months ending June 30, 2024 as compared to the same period in 2023.
At June 30, 2024, approximately 27% of the Bank’s loan portfolio is scheduled to mature or reprice within twelve months and an additional 11% could reprice within three years. In addition, approximately $519.9 million, or 50.5%, of the securities portfolio consists of floating rate bonds that reprice quarterly. Office commercial real estate loans generally have an adjustable rate, with most rate adjustments occurring beyond two years. During the next 24 months, we have 36 office commercial real estate loans totaling $46.7 million with scheduled interest rate resets. Additionally, there are three office commercial real estate loans totaling $3.3 million that will mature during the same time frame. The Bank’s practice is to make commercial real estate loans with an “at origination” loan-to-value of 65% or lower.
Interest expense was $13.3 million for the second quarter of 2024, an increase of $0.8 million, relative to the second quarter of 2023. For the first six months of 2024, compared to the first six months of 2023, interest expense increased $3.7 million, to $25.6 million. The increase in interest expense is primarily attributable to an increase in interest rates paid on certain time deposits, and a shift in deposits to higher interest rate accounts partially offset by lower balances on other borrowings. There was an unfavorable shift in the deposit mix in the second quarter of 2024 as compared to the same period in 2023 due to increased demand from customers for higher rates. Higher cost customer time deposits increased by $23.0 million, and wholesale brokered deposits increased by $129.3 million, while lower cost and noninterest bearing deposits decreased by $181.4 million. A $128.9 million decrease in borrowed funds mitigated some of the unfavorable shift for the quarterly comparison. For the first half of 2024, as compared to the same period in 2023, customer time deposits increased $61.6 million, and wholesale brokered deposits increased $85.9 million, while borrowed funds decreased $88.7 million, and other deposits decreased $218.7 million.
Our net interest margin was 3.69% for the second quarter of 2024, as compared to 3.62% for the linked quarter and 3.39% for the second quarter of 2023. While the yield of interest-earning assets increased 16 basis points for the second quarter of 2024 as compared to the linked quarter, the cost of interest-bearing liabilities increased 10 basis points for the same period of comparison. The average balance of interest-earning assets increased $86.9 million for the linked quarter, while the increase in interest-bearing liabilities was $93.3 million for the same period. The decrease in higher cost borrowed funds over the increase in yield on interest-earning assets improved the net interest margin in the second quarter of 2024 over the same period in 2023, and for the linked quarters.
Provision for Credit Losses
The provision for credit losses on loans was $0.9 million for the second quarter of 2024, as compared to a $0.1 million provision for credit losses related to loans in the second quarter of 2023. There was a year-to-date provision for credit losses on loans of $1.0 million in 2024, as compared to $0.3 million for the same period in 2023. The Company's $0.8 million increase in the provision for credit losses on loans in the second quarter of 2024, as compared to the second quarter of 2023, and the $0.7 million year to date increase in the provision for credit losses on loans, compared to the same period in 2023, was primarily due to the impact of $2.9 million in net charge-offs in the first six months of 2024, with only $0.4 million in net charge-offs for the first six months of 2023. The increase in net charge-offs in the second quarter of 2023 was primarily related to a single office building, which was subsequently foreclosed upon and sold.
There was a benefit for credit losses on unfunded commitments for $0.02 million in the second quarter of 2024, and $0.01 million for the first six months of 2024, as compared to a $0.01 million benefit for credit losses in the second quarter of 2023 and a $0.1 million benefit for credit losses in the first six months of 2023.
The Company did not record a provision for credit losses on available-for-sale debt securities. Although there were debt securities in an unrealized loss position, the declines in market values were primarily attributable to changes in interest rates and volatility in the financial markets and not a result of an expected credit loss.
Noninterest Income
Total noninterest income decreased by $0.4 million, or 5%, for the quarter ended June 30, 2024, as compared to the same quarter in 2023 and increased $1.6 million, or 11%, for the comparable year-to-date periods. The quarterly comparison decrease primarily resulted from a $0.4 million non-recurring bond sale gain in 2023. The year-to-date increase reflects a $2.9 million loss on the sale of investment securities in 2024, offset by a $3.8 million gain on the sale/leaseback of bank owned branch locations. There were $0.5 million in life insurance proceeds in 2023, with no like amount in 2024. These favorable variances to the year-to-date comparisons were augmented by a $1.2 million increase in the value of separate account corporate-owned life insurance assets tied to non-qualified deferred compensation plans.
The Company maintains a non-qualified deferred compensation plan for officers and directors, which allows the participant to defer a portion of their earnings tax-free. Participants are allowed to choose different hypothetical investment alternatives to determine their individualized return on their deferred compensation. The Company has chosen to offset the cost of this liability with a Corporate Owned Life Insurance Policy (“COLI”) which is funded based on deferral elections from the participants. Although the COLI is not directly tied to the deferred compensation plan, the COLI is invested in similar fund types as those selected by the participants. There is some inefficiency in net earnings of the COLI asset as compared to the deferred compensation liability created by the cost of insurance, differences in balances, and differences in individual fund performance. During the second quarter, and first six-months of 2024, earnings from the COLI was $0.3 million, and $1.3 million, respectively, while additional expense from the related deferred compensation liability was $0.3 million, and $1.4 million, respectively. Most of such expense is reported as Professional Fees under Directors Fees as such expense is related to deferral of past directors’ fees. Specifically, $0.3 million for the quarterly comparison, and $1.2 million for the year-to-date comparison, respectively, is reflected as directors’ fees as part of the overall Professional Fees expense line item. The tax benefit of having tax-free earnings with tax-deductible expense was $0.2 million during the second quarter of 2024, and $0.8 million for the first six-months of 2024.
Service charges on customer deposit account income decreased by $0.5 million, or 9%, to $6.2 million in the second quarter of 2024, as compared to the second quarter of 2023, and $0.8 million higher, or 8%, in the first six months of 2024, as compared to the same period in 2023. These increases in the quarterly and year-to-date comparisons are primarily a result of higher interchange and ATM fees, along with increased service charges on analysis accounts.
Noninterest Expense
Total noninterest expense favorably declined by $0.3 million, or 1%, in the second quarter of 2024, relative to the second quarter of 2023, but increased by $1.3 million, or 3%, in the first six months of 2024, as compared to the first six months of 2023.
Salaries and Benefits were $0.1 million, or 1%, lower in the second quarter of 2024, as compared to the second quarter of 2023, and were $0.3 million, or 1%, higher for the first six months of 2024, compared to the same period in 2023. The reason for the decrease in the quarterly comparison is due to a strategic decision to improve operational efficiencies. The increase in the year-over-year comparison is primarily due to increases related to annual performance evaluations. Overall full-time equivalent employees were 501 at June 30, 2024, as compared to 489 at December 31, 2023, and 502 at June 30, 2023. Included in full-time equivalent employees at June 30, 2024, were 18 summer interns and temporary employees.
Occupancy expenses increased by $0.7 million, and $1.4 million for the second quarter, and the first half of 2024 as compared to the same periods in 2023. The reason for the increases in both comparisons is due to increased rent expense from the sale/leaseback transactions in the fourth quarter of 2023, and first quarter of 2024.
Other noninterest expense decreased $0.9 million, or 11%, for the second quarter 2024, as compared to the second quarter in 2023, and decreased $0.4 million, or 3%, for the first half of 2024, as compared to the same period in 2023. FDIC assessment costs decreased by $0.2 million for the quarterly comparisons but were flat for the year-to-date comparison. Deferred compensation expense for directors decreased $0.1 million for the quarterly comparison but increased $0.9 million for the year-to-date comparison, which is linked to the changes in life insurance income as described in detail above. There were decreases in debit card processing and ATM network costs of $0.6 million for both the quarterly and year-to-date comparisons due to a branding change from Mastercard to Visa and the subsequent conversion costs related to that change. Additionally, we incurred a $0.3 million loss that is reflected in noninterest expense during the second quarter of 2023, with no such like event in 2024. For the year-to-date comparison there was also elevated foreclosed assets costs for the first half of 2023, as compared to the same period in 2024, due to the foreclosure and subsequent sale of one large credit in the first quarter of 2023.
The Company's effective tax rate was 27.8% of pre-tax income in the second quarter of 2024, relative to 26.2% in the second quarter of 2023, and 27.1% of pre-tax income for the first half of 2024 relative to 25.0% for the same period in 2023. The increase in effective tax rate for both the quarterly and year-to-date comparisons is due to the tax credits and tax-exempt income representing a smaller percentage of total taxable income.
Balance Sheet Summary
The $48.6 million, or 1%, decrease in total assets during the first half of 2024, is primarily a result of a $326.4 million decrease in investment securities, from the sale of bonds from the strategic securities transaction, partially offset by a $144.5 million increase in gross loans and a $105.4 million increase in cash on hand.
The increase in gross loan balances as compared to December 31, 2023, was primarily a result of organic increases of $13.5 million in farmland loans, and a favorable change of $158.1 million in mortgage warehouse balances. Counterbalancing these positive variances were loan paydowns and maturities resulting in net declines in many categories even with higher loan production. In particular, there was a $27.0 million net decrease in non-agricultural real estate loans.
As indicated in the loan rollforward table below, new credit extended for the second quarter of 2024, increased $5.3 million over the linked quarter to $40.3 million and increased $3.3 million over the same period in 2023. Organic loan growth has been languid due to competitive pressures in our market and lower loan demand in the current interest rate environment. We also had $22.7 million in loan paydowns and maturities, a $10.4 million decline in line of credit utilization, offset by an increase of $70.5 million in mortgage warehouse line utilization.
LOAN ROLLFORWARD
(Dollars in Thousands, Unaudited)
For the three months ended:
For the six months ended:
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Gross loans beginning balance
$
2,156,864
$
2,090,075
$
2,033,968
$
2,090,075
$
2,052,940
New credit extended
40,313
34,966
37,030
75,279
89,639
Changes in line of credit utilization (1)
(10,412
)
(24,928
)
6,622
(35,340
)
(19,168
)
Change in mortgage warehouse
70,498
87,562
42,145
158,060
45,178
Pay-downs, maturities, charge-offs and amortization
(22,735
)
(30,811
)
(25,374
)
(53,546
)
(74,198
)
Gross loans ending balance
$
2,234,528
$
2,156,864
$
2,094,391
2,234,528
2,094,391
(1)
Change does not include new balances on lines of credit extended during the respective periods as such balances are included as part of “New credit extended” line above.
Unused commitments, excluding mortgage warehouse and overdraft lines, were $247.1 million at June 30, 2024, compared to $203.6 million at December 31, 2023. Total line utilization, excluding mortgage warehouse and overdraft lines, was 57% at June 30, 2024, and 62% at December 31, 2023. Mortgage warehouse utilization increased to 54% at June 30, 2024, as compared to 36% at December 31, 2023. Total mortgage warehouse commitments increased by $96.5 million and $186.0 million for the three- and six-month periods ending June 30, 2024, respectively.
Deposit balances reflect growth of $181.2 million, or 7%, during the first six months of 2024. Core non-maturity deposits decreased by $41.4 million, or 2%, while customer time deposits increased by $11.0 million, or 2%. Wholesale brokered deposits increased by $211.6 million primarily to fund the growth in mortgage warehouse loans. Overall noninterest-bearing deposits as a percent of total deposits at June 30, 2024, decreased to 33.5%, as compared to 37.0% at December 31, 2023, and 36.5% at June 30, 2023. Other interest-bearing liabilities of $228.0 million on June 30, 2024, consisted of, $80.0 million in term FHLB advances, $148.0 million in customer repurchase agreements, and $35.7 million in trust preferred securities.
Overall uninsured deposits are estimated to be approximately $805.4 million, or 27% of total deposit balances, excluding public agency deposits that are subject to collateralization through a letter of credit issued by the FHLB. In addition, uninsured deposits of the Bank’s customers are eligible for FDIC pass-through insurance if the customer opens an IntraFi Insured Cash Sweep (ICS) account or a reciprocal time deposit through the Certificate of Deposit Account Registry System (CDARS). IntraFi allows for up to $225 million per customer of pass-through FDIC insurance, which would more than cover each of the Bank’s deposit customers if such customer desired to have such pass-through insurance. The Bank maintains a diversified deposit base with no significant customer concentrations and does not bank any cryptocurrency companies. At June 30, 2023, the Company had approximately 121,000 accounts and the 25 largest deposit balance customers had balances of approximately 14% of overall deposits. During the second quarter of 2024, except for seasonality fluctuations in the normal course of business, there has been no material change in the composition of our 25 largest deposit balance customers.
The Company continues to have substantial liquidity which is managed daily. At June 30, 2024, and December 31, 2023, the Company had the following sources of primary and secondary liquidity (Dollars in Thousands):
Primary and secondary liquidity sources
June 30, 2024
December 31, 2023
Cash and cash equivalents
$
183,990
$
78,602
Unpledged investment securities
533,799
792,965
Excess pledged securities
272,869
382,965
FHLB borrowing availability
672,300
586,726
Unsecured lines of credit
504,785
374,785
Funds available through fed discount window
348,444
392,034
Totals
$
2,516,187
$
2,608,077
Total capital of $350.0 million at June 30, 2024, reflects an increase of $11.9 million, or 4%, relative to year-end 2023. The increase in equity during the first half of 2024 was due to the addition of $19.6 million in net income, a $5.3 million favorable swing in accumulated other comprehensive income/loss due principally to changes in investment securities’ fair value, $7.1 million in share repurchases and net of $6.7 million in dividends paid. The remaining difference is related to stock options exercised and restricted stock compensation recognized during the quarter.
Asset Quality
Total nonperforming assets, comprised of nonaccrual loans and foreclosed assets, decreased by $1.5 million to $6.5 million for the first half of 2024. The Company's ratio of nonperforming loans to gross loans decreased to 0.29% at June 30, 2024, from 0.38% at December 31, 2023. The decrease resulted from a decrease in non-accrual loan balances. All the Company's nonperforming assets are individually evaluated for credit loss quarterly and management believes the established allowance for credit loss on such loans is appropriate.
The Company's allowance for credit losses on loans was $21.6 million at June 30, 2024, as compared to $23.5 million at December 31, 2023. The decreased allowance for credit losses on loans was primarily due to a $1.5 million reduction in the allowance on loans individually evaluated for expected credit losses.
The allowance was 0.97% of gross loans at June 30, 2024, and 1.12% of gross loans at December 31, 2023, and 1.10% of gross loans at June 30, 2023. Management's detailed analysis indicates that the Company's allowance for credit losses on loans should be sufficient to cover credit losses for the life of the loans outstanding as of June 30, 2024, but no assurance can be given that the Company will not experience substantial future losses relative to the size of the loan and lease loss allowance. The Company calculates the allowance for credit losses using a combination of quantitative and qualitative factors by call report category. The largest increase in loan balances was from mortgage warehouse lines which has the lowest allowance for credit losses at 0.25%. Therefore, at June 30, 2024, approximately $0.7 million of the allowance for credit losses is attributable to mortgage warehouse lines.
About Sierra Bancorp
Sierra Bancorp is the holding Company for Bank of the Sierra (www.bankofthesierra.com), which is in its 47th year of operations.
Bank of the Sierra is a community-centric regional bank, which offers a broad range of retail and commercial banking services through full-service branches located within the counties of Tulare, Kern, Kings, Fresno, Ventura, San Luis Obispo, and Santa Barbara. The Bank also maintains an online branch and provides specialized lending services through an agricultural credit center in Templeton, California. In 2024, Bank of the Sierra was recognized as one of the strongest and top-performing community banks in the country, with a 5-star rating from Bauer Financial.
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Readers are cautioned not to unduly rely on forward looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to the health of the national and local economies including the impact to the Company and its customers resulting from changes to, and the level of, inflation and interest rates; changes in laws, rules, regulations, or interpretations to which the Company is subject; the Company’s ability to maintain and grow its deposit base; loan demand and continued portfolio performance, the Company's ability to attract and retain skilled employees, customers' service expectations; cyber security risks: the Company's ability to successfully deploy new technology, the success of acquisitions and branch expansion; operational risks including the ability to detect and prevent errors and fraud; the effectiveness of the Company’s enterprise risk management framework; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks that could affect stock price; changes to valuations of the Company’s assets and liabilities including the allowance for credit losses, earning assets, and intangible assets; changes to the availability of liquidity sources including borrowing lines and the ability to pledge or sell certain assets; costs related to litigation; the effects of severe weather events, pandemics, other public health crises, acts of war or terrorism, and other external events on our business; and other factors detailed in the Company's SEC filings, including the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Form 10‑K and Form 10‑Q.
STATEMENT OF CONDITION
(Dollars in Thousands, Unaudited)
ASSETS
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
Cash and due from banks
$
183,990
$
119,244
$
78,602
$
88,542
$
103,483
Investment securities
Available-for-sale, at fair value
716,787
741,789
1,019,201
1,010,377
1,027,538
Held-to-maturity, at amortized cost, net of allowance for credit losses
312,879
316,406
320,057
323,544
328,478
Real estate loans
Residential real estate
396,819
406,443
412,063
418,782
426,608
Commercial real estate
1,316,754
1,327,482
1,328,224
1,334,663
1,317,945
Other construction/land
5,971
6,115
6,256
7,320
16,020
Farmland
80,807
66,133
67,276
90,993
92,728
Total real estate loans
1,800,351
1,806,173
1,813,819
1,851,758
1,853,301
Other commercial
156,650
143,448
156,272
137,407
126,360
Mortgage warehouse lines
274,059
203,561
116,000
107,584
110,617
Consumer loans
3,468
3,682
3,984
4,061
4,113
Gross loans
2,234,528
2,156,864
2,090,075
2,100,810
2,094,391
Deferred loan fees
288
214
309
163
73
Allowance for credit losses on loans
(21,640
)
(23,140
)
(23,500
)
(23,060
)
(23,010
)
Net loans
2,213,176
2,133,938
2,066,884
2,077,913
2,071,454
Bank premises and equipment
16,007
16,067
16,907
21,926
22,072
Other assets
238,363
225,628
228,148
216,578
209,436
Total assets
$
3,681,202
$
3,553,072
$
3,729,799
$
3,738,880
$
3,762,461
LIABILITIES AND CAPITAL
Noninterest demand deposits
$
986,927
$
968,996
$
1,020,772
$
1,059,878
$
1,066,498
Interest-bearing transaction accounts
537,731
532,791
533,947
561,257
584,263
Savings deposits
368,169
378,057
370,806
400,940
415,793
Money market deposits
136,853
134,533
145,591
130,914
124,834
Customer time deposits
566,132
560,979
555,107
551,731
552,371
Wholesale brokered deposits
346,598
271,648
135,000
165,000
175,000
Total deposits
2,942,410
2,847,004
2,761,223
2,869,720
2,918,759
Long-term debt
49,348
49,326
49,304
49,281
49,259
Subordinated debentures
35,749
35,704
35,660
35,615
35,570
Other interest-bearing liabilities
228,003
201,851
467,621
411,865
398,922
Total deposits and interest-bearing liabilities
3,255,510
3,133,885
3,313,808
3,366,481
3,402,510
Allowance for credit losses on unfunded loan commitments
520
540
510
600
750
Other liabilities
75,152
73,553
77,384
62,940
49,609
Total capital
350,020
345,094
338,097
308,859
309,592
Total liabilities and capital
$
3,681,202
$
3,553,072
$
3,729,799
$
3,738,880
$
3,762,461
GOODWILL AND INTANGIBLE ASSETS
(Dollars in Thousands, Unaudited)
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
Goodwill
$
27,357
$
27,357
$
27,357
$
27,357
$
27,357
Core deposit intangible
961
1,180
1,399
1,618
1,837
Total intangible assets
$
28,318
$
28,537
$
28,756
$
28,975
$
29,194
CREDIT QUALITY
(Dollars in Thousands, Unaudited)
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
Nonperforming loans
$
6,473
$
14,188
$
7,985
$
781
$
1,141
Foreclosed assets
—
—
—
—
—
Total nonperforming assets
$
6,473
$
14,188
$
7,985
$
781
$
1,141
Quarterly net charge offs
$
2,422
$
457
$
3,618
$
67
$
157
Past due and still accruing (30-89)
$
3,172
$
1,563
$
255
$
806
$
1,873
Classified loans
$
28,829
$
34,100
$
35,577
$
39,958
$
37,298
Nonperforming loans / gross loans
0.29
%
0.66
%
0.38
%
0.04
%
0.05
%
NPA's / loans plus foreclosed assets
0.29
%
0.66
%
0.38
%
0.04
%
0.05
%
Allowance for credit losses on loans / gross loans
0.97
%
1.07
%
1.12
%
1.10
%
1.10
%
SELECT PERIOD-END STATISTICS
(Unaudited)
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
Shareholders' equity / total assets
9.5
%
9.7
%
9.1
%
8.3
%
8.2
%
Gross loans / deposits
75.9
%
75.8
%
75.7
%
73.2
%
71.8
%
Noninterest-bearing deposits / total deposits
33.5
%
34.0
%
37.0
%
36.9
%
36.5
%
CONSOLIDATED INCOME STATEMENT
(Dollars in Thousands, Unaudited)
For the three months ended:
For the six months ended:
6/30/2024
3/31/2024
6/30/2023
6/30/2024
6/30/2023
Interest income
$
43,495
$
40,961
$
40,875
$
84,455
$
78,294
Interest expense
13,325
12,244
12,558
25,568
21,845
Net interest income
30,170
28,717
28,317
58,887
56,449
Credit loss expense - loans
921
97
77
1,018
327
Credit loss (benefit) expense - unfunded commitments
(20
)
30
(100
)
10
(137
)
Credit loss benefit - debt securities held-to-maturity
-
-
(47
)
-
-
Net interest income after provision
29,269
28,590
28,387
57,859
56,259
Service charges and fees on deposit accounts
6,184
5,726
5,691
11,909
11,071
(Loss) gain on sale of investments
-
(2,883
)
351
(2,883
)
396
Gain on sale of fixed assets
-
3,799
-
3,799
-
BOLI income
523
1,215
658
1,738
830
Other noninterest income
923
732
1,313
1,656
2,296
Total noninterest income
7,630
8,589
8,013
16,219
14,593
Salaries and benefits
12,029
13,197
12,129
25,226
24,944
Occupancy expense
3,152
3,025
2,438
6,177
4,769
Other noninterest expenses
7,511
8,304
8,401
15,815
16,247
Total noninterest expense
22,692
24,526
22,968
47,218
45,960
Income before taxes
14,207
12,653
13,432
26,860
24,892
Provision for income taxes
3,944
3,323
3,513
7,267
6,222
Net income
$
10,263
$
9,330
$
9,919
$
19,593
$
18,670
TAX DATA
Tax-exempt muni income
$
1,592
$
1,989
$
2,741
$
3,581
$
5,555
Interest income - fully tax equivalent
$
43,918
$
41,490
$
41,604
$
85,407
$
79,771
PER SHARE DATA
(Unaudited)
For the three months ended:
For the six months ended:
6/30/2024
3/31/2024
6/30/2023
6/30/2024
6/30/2023
Basic earnings per share
$
0.72
$
0.64
$
0.67
$
1.36
$
1.26
Diluted earnings per share
$
0.71
$
0.64
$
0.67
$
1.35
$
1.26
Common dividends paid during period
$
0.23
$
0.23
$
0.23
$
0.46
$
0.46
Weighted average shares outstanding
14,300,267
14,508,468
14,735,568
14,404,368
14,853,052
Weighted average diluted shares
14,381,426
14,553,627
14,754,764
14,467,477
14,875,508
Book value per basic share (EOP)
$
24.19
$
23.56
$
20.90
$
24.19
$
20.90
Tangible book value per share (EOP) (2)
$
22.24
$
21.61
$
18.93
$
22.24
$
18.93
Common shares outstanding (EOP)
14,466,873
14,645,298
14,811,736
14,466,873
14,811,736
KEY FINANCIAL RATIOS
(Unaudited)
For the three months ended:
For the six months ended:
6/30/2024
3/31/2024
6/30/2023
6/30/2024
6/30/2023
Return on average equity
11.95
%
11.09
%
13.06
%
11.52
%
12.30
%
Return on average assets
1.14
%
1.06
%
1.07
%
1.10
%
1.02
%
Net interest margin (tax-equivalent) (1)
3.69
%
3.62
%
3.39
%
3.66
%
3.43
%
Efficiency ratio (tax-equivalent) (1) (2)
59.15
%
65.97
%
62.27
%
62.51
%
63.53
%
Net charge-offs / average loans (not annualized)
0.11
%
0.02
%
0.01
%
0.13
%
0.02
%
(1)
Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(2)
See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures".
NON-GAAP FINANCIAL MEASURES
(Dollars in Thousands, Unaudited)
6/30/2024
3/31/2024
6/30/2023
Total stockholders' equity
$
350,020
$
345,094
$
309,592
Less: goodwill and other intangible assets
28,318
28,537
29,194
Tangible common equity
$
321,702
$
316,557
$
280,398
Total assets
$
3,681,202
$
3,553,072
$
3,762,461
Less: goodwill and other intangible assets
28,318
28,537
29,194
Tangible assets
$
3,652,884
$
3,524,535
$
3,733,267
Total stockholders' equity (bank only)
$
415,210
$
401,742
$
403,918
Less: goodwill and other intangible assets (bank only)
28,318
28,537
29,194
Tangible common equity (bank only)
$
386,892
$
373,205
$
374,724
Total assets (bank only)
$
3,678,508
$
3,550,459
$
3,762,461
Less: goodwill and other intangible assets (bank only)
28,318
28,537
29,194
Tangible assets (bank only)
$
3,650,190
$
3,521,922
$
3,733,267
Common shares outstanding
14,466,946
14,645,298
14,811,736
Book value per common share (total stockholders' equity / shares outstanding)
$
24.19
$
23.56
$
20.90
Tangible book value per common share (tangible common equity / shares outstanding)
$
22.24
$
21.61
$
18.93
Equity ratio - GAAP (total stockholders' equity / total assets
9.51
%
9.71
%
8.23
%
Tangible common equity ratio (tangible common equity / tangible assets)
8.81
%
8.98
%
7.51
%
Tangible common equity ratio (bank only) (tangible common equity / tangible assets)
10.60
%
10.60
%
10.04
%
For the three months ended:
Efficiency Ratio:
6/30/2024
3/31/2024
6/30/2023
Noninterest expense
$
22,692
$
24,526
$
22,968
Divided by:
Net interest income
30,170
28,717
28,317
Tax-equivalent interest income adjustments
423
529
729
Net interest income, adjusted
30,593
29,246
29,046
Noninterest income
7,630
8,589
8,013
Less (loss) gain on sale of securities
-
(2,883
)
351
Less gain on sale of fixed assets
-
3,799
-
Less realized gain (loss) on available-for-sale securities
-
66
-
Tax-equivalent noninterest income adjustments
139
323
175
Noninterest income, adjusted
7,769
7,930
7,837
Net interest income plus noninterest income, adjusted
$
38,362
$
37,176
$
36,883
Efficiency Ratio (tax-equivalent)
59.15
%
65.97
%
62.27
%
NONINTEREST INCOME/EXPENSE
(Dollars in Thousands, Unaudited)
For the three months ended:
For the six months ended June 30,
Noninterest income:
6/30/2024
3/31/2024
6/30/2023
2024
2023
Service charges and fees on deposit accounts
$
6,184
$
5,726
$
5,691
$
11,909
$
11,071
(Loss) gain on sale of securities available-for-sale
—
(2,883
)
351
(2,883
)
396
Gain on sale of fixed assets
—
3,799
—
3,799
—
Bank-owned life insurance
523
1,215
658
1,738
830
Other
923
732
1,313
1,656
2,296
Total noninterest income
$
7,630
$
8,589
$
8,013
$
16,219
$
14,593
As a % of average interest-earning assets (1)
0.92
%
1.06
%
0.93
%
0.99
%
0.86
%
Noninterest expense:
Salaries and employee benefits
$
12,029
$
13,197
$
12,129
$
25,226
$
24,944
Occupancy and equipment costs
3,152
3,025
2,438
6,177
4,769
Advertising and marketing costs
338
343
410
680
923
Data processing costs
1,680
1,509
1,536
3,189
3,064
Deposit services costs
2,019
2,133
2,532
4,152
4,555
Loan services costs
Loan processing
89
151
151
240
279
Foreclosed assets
—
—
(33
)
—
725
Other operating costs
1,094
926
1,490
2,021
2,479
Professional services costs
Legal & accounting services
714
715
483
1,240
1,129
Director's costs
646
1,254
725
1,899
308
Other professional service
582
809
832
1,582
2,039
Stationery & supply costs
115
148
125
263
265
Sundry & tellers
234
316
150
549
481
Total noninterest expense
$
22,692
$
24,526
$
22,968
$
47,218
$
45,960
As a % of average interest-earning assets (1)
2.74
%
3.04
%
2.68
%
2.89
%
2.72
%
Efficiency ratio (tax-equivalent) (2)(3)
59.15
%
65.97
%
62.27
%
62.45
%
63.53
%
(1)
Annualized
(2)
Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(3)
See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures".
AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)
For the quarter ended
For the quarter ended
For the quarter ended
June 30, 2024
March 31, 2024
June 30, 2023
Average Balance (1)
Income/ Expense
Yield/ Rate (2)
Average Balance (1)
Income/ Expense
Yield/
Rate (2)
Average Balance (1)
Income/ Expense
Yield/ Rate (2)
Assets
Investments:
Federal funds sold/interest-earning due from accounts
$
43,407
$
598
5.54
%
$
16,996
$
243
5.75
%
$
35,236
$
376
4.28
%
Taxable
866,270
12,787
5.94
%
893,171
13,303
5.99
%
996,117
13,488
5.43
%
Non-taxable
199,942
1,592
4.05
%
244,997
1,989
4.13
%
352,718
2,741
3.95
%
Total investments
1,109,619
14,977
5.58
%
1,155,164
15,535
5.59
%
1,384,071
16,605
5.02
%
Loans: (3)
Real estate
1,802,190
20,463
4.57
%
1,806,185
20,190
4.50
%
1,858,512
20,827
4.49
%
Agricultural production
75,825
1,406
7.46
%
61,419
1,138
7.45
%
28,472
496
6.99
%
Commercial
77,224
1,174
6.11
%
79,208
1,183
6.01
%
82,743
1,179
5.72
%
Consumer
3,698
79
8.59
%
3,962
80
8.12
%
4,339
88
8.13
%
Mortgage warehouse lines
261,768
5,382
8.27
%
137,421
2,821
8.26
%
78,187
1,658
8.51
%
Other
2,291
14
2.46
%
2,333
14
2.41
%
2,483
22
3.55
%
Total loans
2,222,996
28,518
5.16
%
2,090,528
25,426
4.89
%
2,054,736
24,270
4.74
%
Total interest-earning assets (4)
3,332,615
43,495
5.30
%
3,245,692
40,961
5.14
%
3,438,807
40,875
4.85
%
Other earning assets
17,058
17,345
16,952
Non-earning assets
286,020
270,786
267,433
Total assets
$
3,635,693
$
3,533,823
$
3,723,192
Liabilities and shareholders' equity
Interest-bearing deposits:
Demand deposits
$
131,510
$
733
2.24
%
$
137,961
$
699
2.04
%
$
144,156
$
190
0.53
%
NOW
398,001
148
0.15
%
398,639
84
0.08
%
454,395
76
0.07
%
Savings accounts
371,961
80
0.09
%
376,335
73
0.08
%
428,222
62
0.06
%
Money market
139,507
476
1.37
%
137,687
410
1.20
%
123,571
72
0.23
%
Time deposits
563,526
6,051
4.32
%
561,941
6,190
4.43
%
540,540
6,022
4.47
%
Wholesale brokered deposits
307,995
3,544
4.63
%
205,092
2,189
4.29
%
178,728
1,521
3.41
%
Total interest-bearing deposits
1,912,500
11,032
2.32
%
1,817,655
9,645
2.13
%
1,869,612
7,943
1.70
%
Borrowed funds:
Repurchase agreements
131,478
66
0.20
%
112,385
41
0.15
%
79,694
65
0.33
%
Other borrowings
98,731
1,042
4.24
%
119,475
1,372
4.62
%
279,633
3,430
4.92
%
Long-term debt
49,335
430
3.51
%
49,312
431
3.52
%
49,247
429
3.49
%
Subordinated debentures
35,723
755
8.50
%
35,677
755
8.51
%
35,547
691
7.80
%
Total borrowed funds
315,267
2,293
2.93
%
316,849
2,599
3.30
%
444,121
4,615
4.17
%
Total interest-bearing liabilities
2,227,767
13,325
2.41
%
2,134,504
12,244
2.31
%
2,313,733
12,558
2.18
%
Demand deposits - noninterest-bearing
978,602
990,377
1,050,668
Other liabilities
83,886
70,534
54,139
Shareholders' equity
345,438
338,408
304,652
Total liabilities and shareholders' equity
$
3,635,693
$
3,533,823
$
3,723,192
Interest income/interest-earning assets
5.30
%
5.14
%
4.85
%
Interest expense/interest-earning assets
1.61
%
1.52
%
1.46
%
Net interest income and margin (5)
$
30,170
3.69
%
$
28,717
3.62
%
$
28,317
3.39
%
(1)
Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.
(2)
Yields and net interest margin have been computed on a tax equivalent basis utilizing a 21% effective federal tax rate.
(3)
Loans are gross of the allowance for possible loan losses. Loan fees have been included in the calculation of interest income. Net loan fees and loan acquisition FMV amortization were $(0.3) million and $(0.3) million for the quarters ended June 30, 2024 and 2023, respectively, and $(0.3) million for the quarter ended March 31, 2024.
(4)
Non-accrual loans have been included in total loans for purposes of computing total earning assets.
(5)
Net interest margin represents net interest income as a percentage of average interest-earning assets.
AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)
For the six months ended
For the six months ended
June 30, 2024
June 30, 2023
Average Balance (1)
Income/ Expense
Yield/ Rate (2)
Average Balance (1)
Income/ Expense
Yield/ Rate (2)
Assets
Investments:
Interest-earning due from banks
$
30,202
$
839
5.57
%
$
20,357
$
446
4.42
%
Taxable
879,720
26,090
5.95
%
984,150
25,472
5.22
%
Non-taxable
222,469
3,581
4.09
%
356,999
5,555
3.97
%
Total investments
1,132,391
30,510
5.57
%
1,361,506
31,473
4.88
%
Loans:(3)
Real estate
$
1,804,187
$
40,653
4.53
%
$
1,863,783
$
40,726
4.41
%
Agricultural
68,622
2,544
7.46
%
28,251
929
6.63
%
Commercial
78,216
2,357
6.06
%
76,848
2,172
5.70
%
Consumer
3,830
160
8.40
%
4,239
176
8.37
%
Mortgage warehouse lines
199,595
8,203
8.26
%
68,707
2,776
8.15
%
Other
2,312
28
2.44
%
2,474
42
3.42
%
Total loans
2,156,762
53,945
5.03
%
2,044,302
46,821
4.62
%
Total interest-earning assets (4)
3,289,153
84,455
5.22
%
3,405,808
78,294
4.72
%
Other earning assets
17,202
16,336
Non-earning assets
278,403
269,950
Total assets
$
3,584,758
$
3,692,094
Liabilities and shareholders' equity
Interest-bearing deposits:
Demand deposits
$
134,736
$
1,431
2.14
%
$
147,131
$
319
0.44
%
NOW
398,320
232
0.12
%
468,939
147
0.06
%
Savings accounts
374,148
153
0.08
%
442,826
127
0.06
%
Money market
138,597
886
1.29
%
129,470
96
0.15
%
Time deposits
562,733
12,241
4.37
%
501,096
10,528
4.24
%
Brokered deposits
256,543
5,733
4.49
%
170,688
2,726
3.22
%
Total interest-bearing deposits
1,865,077
20,676
2.23
%
1,860,150
13,943
1.51
%
Borrowed funds:
Repurchase agreements
121,932
106
0.17
%
91,495
146
0.08
%
Other borrowings
109,103
2,415
4.45
%
228,463
5,541
4.89
%
Long-term debt
49,324
861
3.51
%
49,235
857
3.51
%
Subordinated debentures
35,700
1,510
8.51
%
35,523
1,358
7.71
%
Total borrowed funds
316,059
4,892
3.11
%
404,716
7,902
5.09
%
Total interest-bearing liabilities
2,181,136
25,568
2.36
%
2,264,866
21,845
1.95
%
Demand deposits - noninterest-bearing
984,489
1,060,666
Other liabilities
77,210
60,351
Shareholders' equity
341,923
306,211
Total liabilities and shareholders' equity
$
3,584,758
$
3,692,094
Interest income/interest-earning assets
5.22
%
4.72
%
Interest expense/interest-earning assets
1.56
%
1.29
%
Net interest income and margin(5)
$
58,887
3.66
%
$
56,449
3.43
%
(1)
Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.
(2)
Yields and net interest margin have been computed on a tax equivalent basis utilizing a 21% effective federal tax rate.
(3)
Loans are gross of the allowance for possible loan losses. Loan fees have been included in the calculation of interest income. Net loan fees and loan acquisition FMV amortization were $(0.7) million and $(0.4) million for the six months ended June 30, 2024 and 2023, respectively.
(4)
Non-accrual loans have been included in total loans for purposes of computing total earning assets.
(5)
Net interest margin represents net interest income as a percentage of average interest-earning assets.
Category: Financial
Source: Sierra Bancorp
View source version on businesswire.com: https://www.businesswire.com/news/home/20240722244259/en/
Kevin McPhaill, President/CEO (559) 782‑4900 or (888) 454‑BANK www.sierrabancorp.com
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