Sierra Bancorp (Nasdaq: BSRR), parent of Bank of the Sierra,
today announced its unaudited financial results for the quarter
ended March 31, 2022. Sierra Bancorp reported consolidated net
income of $7.4 million, or $0.49 per diluted share, for the first
quarter of 2022 compared to $11.1 million, or $0.72 per diluted
share, in the first quarter of 2021. The unfavorable variance in
net income came largely from a $3.8 million decrease in net
interest income. The Company's return on average assets and return
on average equity were 0.88% and 8.64%, respectively, in the first
quarter of 2022 as compared to 1.40% and 12.94%, respectively, in
the first quarter of 2021.
In April 2022, the Company opened its second loan production
office in Templeton, California which demonstrates our investment
in expanding our agricultural presence in the state. With the
recent hire of Mark Pearce, we now have seven experienced
relationship managers and a strong support team of underwriters,
analysts, and other support focused on agricultural lending
throughout California. While we have reduced exposure in the dairy
industry, some of the areas of focus include winery and vineyard
lending on the Central Coast and diversified farming operations in
the Central Valley.
“Action is the foundational key to all
success.” – Pablo Picasso
“Over the past few months, we have successfully added new
agricultural, commercial real estate, and mortgage warehouse
experts to our lending team,” stated Kevin McPhaill, President and
CEO. “This has created a higher level of energy and excitement as
we look to grow these segments of our loan portfolio. In addition
to our new lenders, new loan opportunities have increased
throughout our branches as our bankers diligently work with
existing and new customers throughout our markets. We have also
launched new deposit products and enhanced our treasury services as
we look to add to our already strong deposit growth. While this
year will have challenges, there will be opportunities as well. We
are excited about our prospects and look forward to continued
success this year!” McPhaill concluded.
Financial Highlights
Quarterly Changes (comparisons to the first quarter of
2021)
- The $3.8 million, or 13%, decrease in net interest income is
due mostly to a $3.4 million decrease in interest income resulting
primarily from lower loan volumes combined with lower rates. In
addition, there was a $0.4 million unfavorable increase in interest
expense due to the issuance of subordinated debt during the third
quarter of 2021.
- The provision for credit losses on loans & leases at $0.6
million is $0.4 million higher as a result of higher charge-offs
partially offset by a reduction in the pooled allowance under the
new current expected credit losses (“CECL”) methodology implemented
on January 1, 2022.
- All capital ratios were above the regulatory requirements for a
well-capitalized institution. The Community Bank Leverage ratio was
11.65% for Bank of the Sierra. The Sierra Bancorp leverage ratio
was 10.48%.
- Sierra Bancorp repurchased 182,562 shares totaling $4.9 million
in the first quarter of 2022.
- Our Board of Directors declared a cash dividend of $0.23 per
share on April 21, 2022. This is the 93rd consecutive quarterly
dividend paid by Sierra Bancorp. The cash dividend is payable on
May 12, 2022 to shareholders of record at the close of business on
May 2, 2022.
Linked Quarter Changes (comparisons to the three months ended
December 31, 2021)
- Net income decreased by $2.2 million, or 23%, driven mostly by
a $1.8 million decline in net interest income and a $0.6 million
provision for credit losses compared to a $1.2 million provision
reversal in the prior quarter.
- Noninterest expense decreased $2.0 million, or 9%, favorably
impacting net income, mostly due to a decrease in professional
fees.
Balance Sheet Changes (comparisons to December 31,
2021)
- Total assets were relatively unchanged at $3.4 billion.
- Deposits increased by $83.4 million, or 3%. The growth in
deposits came primarily from noninterest bearing or low-cost
transaction and savings accounts, while higher-cost time deposits
decreased slightly.
- Gross loan balances were flat at $2.0 billion, however real
estate secured loans increased $62.9 million, due mostly to high
quality jumbo single family mortgage loan pool purchases. This
increase was offset by a reduction in commercial and industrial
loans of $22.6 million due predominately to Small Business
Administration Paycheck Protection Program (“SBA PPP”) loan
forgiveness. Other significant declines included a decrease in
Mortgage Warehouse lines for $44.0 million due to reduced refinance
activity.
Other financial highlights are reflected in the following
table.
FINANCIAL HIGHLIGHTS
(Dollars in Thousands, Except Per Share
Data, Unaudited)
As of or for the
three months ended
3/31/2022
12/31/2021
3/31/2021
Net income
$
7,407
$
9,621
$
11,078
Diluted earnings per share
$
0.49
$
0.63
$
0.72
Return on average assets
0.88%
1.10%
1.40%
Return on average equity
8.64%
10.47%
12.94%
Net interest margin (tax-equivalent)
3.21%
3.31%
3.93%
Yield on average loans and leases
4.32%
4.59%
4.53%
Cost of average total deposits
0.08%
0.08%
0.09%
Efficiency ratio (tax-equivalent) (1)
67.08%
64.86%
56.43%
Total assets
$
3,418,854
$
3,371,014
$
3,326,037
Loans & leases net of deferred
fees
$
1,982,131
$
1,987,861
$
2,284,751
Noninterest demand deposits
$
1,104,691
$
1,084,544
$
1,020,350
Total deposits
$
2,864,943
$
2,781,572
$
2,853,892
Noninterest-bearing deposits over total
deposits
38.6%
39.0%
35.8%
Shareholders equity / total assets
9.5%
10.8%
10.5%
Tangible common equity ratio (2)
8.7%
9.9%
9.6%
Book value per share
$
21.59
$
23.74
$
22.58
Tangible book value per share (2)
$
19.58
$
21.73
$
20.54
(1)
Noninterest expense as a percentage of the
sum of net interest income and noninterest income excluding net
gains (losses) from securities and bank owned life insurance
income.
(2)
See reconciliation of non-GAAP financial
measures to the corresponding GAAP measurement in "Non-GAAP
Financial Measures" later in this document
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income was $24.8 million for the first quarter of
2022, a decrease of $1.8 million, or 7%, as compared to the fourth
quarter of 2021 and a decrease of $3.8 million, or 13%, as compared
to the first quarter of 2021. As compared to the fourth quarter of
2021, overall loan interest income declined by $2.9 million, or
12%, due primarily to a $95.8 million decline in average loan
balances, as well as by a 27 basis point decrease in loan yield.
There was no change in the cost of interest bearing liabilities for
the first three months of 2022 as compared to the prior linked
quarter.
For the first quarter of 2022 as compared to the same quarter in
2021, average loan balances decreased $415.3 million, primarily in
real estate loans, mortgage warehouse lines and SBA PPP loans
contributing to the $5.6 million decrease in loan interest income.
In addition, there was an unfavorable rate variance due to a 21 bps
decrease in loan yield. While overall deposit costs declined in the
first quarter of 2022 as compared to the same quarter in 2021,
there was an 8 bps increase in the overall cost of interest bearing
liabilities due to $50 million in subordinated debentures issued at
3.25% in September 2021.
At March 31, 2022, approximately 16% of the Bank’s loan
portfolio is schedule to mature or reprice within twelve months
with another 9% repricing within three years. In addition,
approximately $347.3 million, or 34%, of the securities portfolio
consists of floating rate bonds that will reprice in less than 90
days.
Interest expense was $1.3 million for the first quarter of 2022,
relatively unchanged from the linked quarter, and an increase of
$0.4 million, or 47% from the same period in 2021. The increase in
the quarterly comparison is attributable to the issuance of
subordinated debentures described above, as the interest expense on
deposit accounts was primarily flat.
Our net interest margin was 3.21% for the first quarter of 2022,
as compared to 3.31% for the linked quarter and 3.93% for the
quarter ending March 31, 2021. Average overnight cash balances from
increased liquidity due to deposit growth were $194.8 million in
the first quarter of 2022 and $311.4 million in the fourth quarter
of 2021, yielded an average rate of 19 and 15 bps respectively. The
average balance of overnight cash was $76.5 million in the first
quarter of 2021. The average balance of investment accounts
increased $159.2 million for the first quarter of 2022 as compared
to the fourth quarter of 2021 and increased $494.9 million over the
same quarter in 2021. The yield on investment balances increased 6
bps for the first quarter of 2022 as compared to the fourth quarter
of 2021 but declined 27 bps over the same quarter in 2021.
Provision for Credit Losses
The Company implemented the Current Expected Credit Loss
("CECL") accounting method under Financial Accounting Standards
Board (FASB) Accounting Standards Update 2016-03 and related
amendments, Financial Instruments – Credit Losses (Topic 326) on
January 1, 2022. Upon implementation the Company recorded a $10.4
million increase in the allowance for credit losses, which included
a $0.9 million reserve for unfunded commitments as an adjustment to
equity, net of deferred taxes.
The Company recorded a provision for credit losses on loan and
leases of $0.6 million in the first quarter of 2022, as compared to
a benefit for loan and lease losses of $1.2 million in the fourth
quarter of 2021, and a provision for loan and lease losses of $0.3
million in the first quarter of 2021. The higher provision for
credit losses in the first quarter of 2022 over both the linked
quarter and the same quarter in 2021, was primarily due to the
impact of a $1.8 million in net charge-offs in the first quarter of
2022, partially offset by a decrease in the allowance for credit
losses for loans evaluated on a pool basis. The increase in net
charge-offs in the first quarter of 2022 was primarily related to a
single loan relationship that defaulted in late March 2022 upon the
discovery of new information. No additional allowance was booked
for this loan individually evaluated for expected losses. The first
quarter of 2022 decrease in the allowance for credit losses
evaluated on a pooled basis was primarily due to a decline in the
qualitative factors resulting from improvements in regional
economic factors. The net benefit for loan losses in the fourth
quarter of 2021 was due mostly to lower historical loan loss rates,
a decline in outstanding balances on loans, and a change in the mix
of loans.
The Company recorded a benefit for credit losses on unfunded
commitments in the first quarter of 2022 for $0.1 million with no
corresponding benefit or provision in the first quarter of 2021.
The benefit for credit losses was due to a reduction in the reserve
rate utilized in the calculation of the reserve as well as
reductions in availability of credit lines.
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
Noninterest income decreased by $1.0 million, or 15%, to $6.1
million in the first quarter of 2022 as compared to $7.1 million in
the fourth quarter of 2021. Noninterest income decreased by $0.8
million, or 11%, in the first quarter of 2022 as compared to the
same quarter in 2021. The first quarter 2022 decrease of $1.0
million, compared to the fourth quarter of 2021, is primarily due
to valuation decreases related to restricted equity investments for
$0.3 million and BOLI fluctuations associated with deferred
compensation plans for $0.9 million. In addition, there was a $1.0
million gain on sale of securities in the first quarter of 2022 as
compared to $0.7 million in gains on sales of various assets in the
fourth quarter of 2021.
In comparing the first quarter of 2022 to the same period in
2021, the reasons for the variances include a $1.2 million decrease
in the change in the annual valuation change of restricted equity
investments, as well as BOLI fluctuations associated with deferred
compensation plans for $1.2 million. These negative variances were
partially offset by a $1.0 million gain on the sale of investment
securities in an effort to rebalance the portfolio by selling
longer duration and higher price volatility securities as a hedge
against rising interest rates, due to likely persistent
inflationary pressures in the near-intermediate term
environment.
Service charges on customer deposit account income declined by
$0.1 million, or 4%, to $3.0 million in the first quarter of 2022
as compared to the fourth quarter of 2021. This same income was
$0.3 million higher in the first quarter of 2022 as compared to the
first quarter of 2021 due to higher returned check charges and
overdraft fees.
Noninterest Expense
Total noninterest expense had a favorable decline of $2.0
million, or 9%, in the first quarter of 2022 as compared to the
fourth quarter of 2021 and decreased $0.1 million compared to the
first quarter of 2021.
Salaries and benefits were $1.6 million higher in the first
quarter of 2022 as compared to the fourth quarter of 2021 and $0.7
million higher than the first quarter of 2021. The increase in the
linked quarter and year-over-year quarterly comparison is due to
several factors, including merit increases for employees due to
annual performance evaluations during the first quarter of 2022,
higher payroll taxes in the first quarter, the strategic hiring of
lending and management staff, and the impact of a favorable bonus
adjustment in the fourth quarter of 2021. Overall full-time
equivalent employees were 484 at March 31, 2022 as compared to 480
at December 31, 2021 and 508 at March 31, 2021.
Occupancy expense was down $0.1 million for the linked quarters
and $0.2 million lower for the first quarter of 2022 as compared to
the same quarter last year. We closed five branch facilities in the
second quarter of 2021 which impacted the decrease for the
year-over-year quarterly comparison.
Other noninterest expense decreased $3.5 million, or 37%, in the
first quarter of 2022 as compared to the fourth quarter of 2021 and
was $0.6 million, or 8% lower than the first quarter of 2021. The
primary reason for the decrease in both the linked quarters and the
year-over-year quarterly comparison was lower professional services
expense, primarily due to lower legal fees.
The Company's effective tax rate was 27.0% in the first quarter
of 2022 relative to 24.2% in the fourth quarter of 2021 and 25.5%
for the first quarter of 2021. The increase in the effective tax
rate for the first quarter of 2022 is due to tax credits and
tax-exempt income representing a smaller percentage of total
taxable income.
Balance Sheet Summary
The $47.8 million, or 1% increase in total assets during the
first quarter of 2022, is primarily a result of a $51.7 million
increase in investment securities, due mostly to the purchase of
collateralized loan obligations.
Gross loan balances remained relatively flat during the first
quarter of 2022 with an overall 0.3% change. The net change did
have some offsetting components with the larger fluctuations being
a $44.0 million decline in mortgage warehouse line utilization, a
$25.8 million decrease in non-owner occupied commercial real
estate, and a $16.8 million decrease in PPP loans. These declines
were mostly offset by a $109.4 million increase in 1-4 family
mortgage loans due to purchases of high-quality jumbo mortgage
loans. The Company’s regulatory commercial real estate
concentration ratio decreased to 234% at March 31, 2022 as compared
to 248% at December 31, 2021.
Regarding line utilization, unused commitments, excluding
mortgage warehouse and consumer overdraft lines, were $224.4
million at March 31, 2022, compared to $242.3 million at December
31, 2021. Total utilization excluding mortgage warehouse and
consumer overdraft lines was 61% at March 31, 2022, compared to 61%
at December 31, 2021. Mortgage warehouse utilization was 16% at
March 31, 2022, as compared to 28% at December 31, 2021.
As expected, PPP loans continue to decline as borrowers receive
forgiveness on these loans. There were 160 loans for $15.0 million
outstanding at March 31, 2022, compared to 438 loans for $31.8
million at December 31, 2021.
In addition to an expanded investment in agricultural lending
with the recent opening of our Templeton loan production office, as
described above, the real estate and mortgage warehouse teams are
experiencing a build-up of existing pipelines and the boarding of
new customer relationships.
Deposit balances grew by $83.4 million, or 3%, during the first
quarter of 2022 to $2.9 billion at March 31, 2022. Core
non-maturity deposits increased $83.6 million, or 3%, for the first
three months of 2022, while customer time deposits declined by $0.2
million. There was no change in brokered deposits during the
quarter. Overall noninterest-bearing deposits as a percent of total
deposits decreased slightly to 38.6% at March 31, 2022, compared to
39.0% at December 31, 2021, and increased from 35.8% at March 31,
2021. Other interest-bearing liabilities of $192.3 million at March
31, 2022, include $107.8 million of customer repurchase agreements,
$49.2 million in subordinated debt, and $35.3 million in trust
preferred securities.
The Company continues to have substantial liquidity. At March
31, 2022, and December 31, 2021, the Company had the following
sources of primary and secondary liquidity (dollars in
thousands):
Primary and secondary liquidity
sources
March 31, 2022
December 31, 2021
Cash and cash equivalents
$
253,534
$
257,528
Unpledged investment securities
861,857
806,132
Excess pledged securities
40,403
47,024
FHLB borrowing availability
748,101
787,519
Unsecured lines of credit
305,000
305,000
Funds available through fed discount
window
44,587
50,608
Totals
$
2,253,482
$
2,253,811
Total capital of $325.7 million at March 31, 2022, reflects a
decrease of $36.8 million, or 10%, compared to December 31, 2021.
The decrease in equity during the first quarter of 2022 is due to
net income of $7.4 million, offset by a $3.5 million dividend paid
to shareholders, $4.9 million in share repurchases and a $28.9
million unfavorable swing in other comprehensive income/loss due
principally to changes in investment securities' fair value. The
remaining difference is related to stock options exercised and
restricted stock compensation recognized during the quarter.
Asset Quality
Total nonperforming assets, comprised of non-accrual loans and
foreclosed assets, increased by $25.9 million, during the first
quarter of 2022. The increase resulted from an increase in
non-accrual loans, primarily as a result of one relationship in the
dairy industry consisting of four separate loans. These loans were
written down by $1.96 million in the first quarter of 2022 and no
further allowance for credit losses was deemed necessary on these
loans. The Company's ratio of nonperforming assets to loans plus
foreclosed assets increased to 1.54% at March 31, 2022, from 0.23%
at December 31, 2021 due primarily to the loan relationship
downgrade previously mentioned. 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 are appropriate.
The Company's allowance for credit losses on loans and leases
was $22.5 million at March 31, 2022, as compared to $14.3 million
at December 31, 2021, and $18.3 million at March 31, 2021. The $8.3
million increase in the allowance for credit losses on loan and
leases during the first quarter of 2022 is due to a $9.5 million
one-time adjustment from the implementation of CECL on January 1,
2022, a $0.6 million provision for credit losses on loan and
leases, and net loan charge-offs of $1.8 million.
The allowance was 1.14% of total loans at March 31, 2022, 0.72%
of total loans at December 31, 2021, and 0.80% of total loans at
March 31, 2021. Management's detailed analysis indicates that the
Company's allowance for credit losses on loan and leases should be
sufficient to cover credit losses for the life of the loan and
leases outstanding as of March 31, 2022, 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 provided loan modification deferrals to customers
under Section 4013 of the CARES Act, which were not treated as
troubled debt restructured loans. As of March 31, 2022 there are no
loans remaining on deferred status.
About Sierra Bancorp
Sierra Bancorp is the holding Company for Bank of the Sierra
(www.bankofthesierra.com), which is in its 45th year of operations
and is the largest independent bank headquartered in the South San
Joaquin Valley. 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, an SBA center, and a dedicated loan
production office in Roseville, California. In 2022, 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 our
borrowers' actual payment performance as loan deferrals related to
the COVID-19 pandemic expire, changes to statutes, regulations, or
regulatory policies or practices as a result of, or in response to
COVID-19, including the potential adverse impact of loan
modifications and payment deferrals implemented consistent with
recent regulatory guidance, the health of the national and local
economies, the impacts of inflation, the Company's ability to
attract and retain skilled employees, customers' service
expectations, the Company's ability to successfully deploy new
technology, the success of acquisitions and branch expansion,
closure or consolidation, changes in interest rates, loan portfolio
performance, 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
3/31/2022
12/31/2021
9/30/2021
6/30/2021
3/31/2021
Cash and due from banks
$
253,534
$
257,528
$
422,350
$
373,902
$
346,211
Investment securities available-for-sale,
at fair value
1,025,032
973,314
732,312
607,474
552,931
Real estate loans
1-4 family residential construction
8,800
21,369
34,720
37,165
36,818
Other construction/land
24,633
25,299
25,512
27,682
50,433
1-4 family - closed-end
398,871
289,457
220,240
106,599
126,949
Equity lines
23,389
26,588
31,341
33,334
36,276
Multi-family residential
59,711
53,458
55,628
58,230
58,324
Commercial real estate - owner
occupied
331,764
334,446
345,116
359,021
359,777
Commercial real estate - non-owner
occupied
857,051
882,888
995,921
1,048,153
1,071,532
Farmland
98,865
106,706
124,446
125,783
126,157
Total real estate loans
1,803,084
1,740,211
1,832,924
1,795,967
1,866,266
Agricultural production loans
31,663
33,990
43,296
42,952
45,476
Commercial and industrial
87,173
109,791
132,292
150,632
183,762
Mortgage warehouse lines
57,178
101,184
126,486
150,351
187,940
Consumer loans
4,233
4,550
4,828
4,894
5,024
Gross loans and leases
1,983,331
1,989,726
2,139,826
2,144,796
2,288,468
Deferred loan and lease fees
(1,200
)
(1,865
)
(2,612
)
(3,835
)
(3,717
)
Allowance for credit losses on loans and
leases
(22,530
)
(14,256
)
(15,617
)
(16,421
)
(18,319
)
Net loans and leases
1,959,601
1,973,605
2,121,597
2,124,540
2,266,432
Bank premises and equipment
23,239
23,571
24,490
25,949
26,795
Other assets
157,448
142,996
141,990
140,183
133,668
Total assets
$
3,418,854
$
3,371,014
$
3,442,739
$
3,272,048
$
3,326,037
LIABILITIES AND CAPITAL
Noninterest demand deposits
$
1,104,691
$
1,084,544
$
1,111,411
$
1,073,833
$
1,020,350
Interest-bearing transaction accounts
776,457
744,553
765,823
752,137
770,271
Savings deposits
480,178
450,785
451,248
435,076
415,230
Money market deposits
149,918
147,793
141,348
133,977
136,653
Customer time deposits
293,699
293,897
290,816
295,891
411,388
Wholesale brokered deposits
60,000
60,000
60,000
85,000
100,000
Total deposits
2,864,943
2,781,572
2,820,646
2,775,914
2,853,892
Long-term debt
49,151
49,141
49,221
-
-
Subordinated debentures
35,347
35,302
35,258
35,213
35,169
Other interest-bearing liabilities
107,760
106,937
92,553
70,535
56,527
Total deposits and interest-bearing
liabilities
3,057,201
2,972,952
2,997,678
2,881,662
2,945,588
Allowance for credit losses on unfunded
loan commitments
1,040
203
203
193
289
Other liabilities
34,922
35,365
80,351
32,464
32,179
Total capital
325,691
362,494
364,507
357,729
347,981
Total liabilities and capital
$
3,418,854
$
3,371,014
$
3,442,739
$
3,272,048
$
3,326,037
GOODWILL AND INTANGIBLE ASSETS
(Dollars in Thousands, Unaudited)
3/31/2022
12/31/2021
9/30/2021
6/30/2021
3/31/2021
Goodwill
$
27,357
$
27,357
$
27,357
$
27,357
$
27,357
Core deposit intangible
3,022
3,275
3,527
3,780
4,038
Total intangible assets
$
30,379
$
30,632
$
30,884
$
31,137
$
31,395
CREDIT QUALITY
(Dollars in Thousands, Unaudited)
3/31/2022
12/31/2021
9/30/2021
6/30/2021
3/31/2021
Non-accruing loans
$
30,446
$
4,522
$
6,788
$
7,276
$
8,599
Foreclosed assets
93
93
93
774
945
Total nonperforming assets
$
30,539
$
4,615
$
6,881
$
8,050
$
9,544
Performing TDR's (not included in
NPA's)
$
4,568
$
4,910
$
5,509
$
10,774
$
10,596
Net (recoveries) / charge offs
$
1,778
$
(168
)
$
(329
)
$
(533
)
$
(331
)
Past due & still accruing (30-89)
$
2,809
$
2,013
$
380
$
3,197
$
2,991
Non-performing loans to gross loans
1.54
%
0.23
%
0.32
%
0.34
%
0.38
%
NPA's to loans plus foreclosed assets
1.54
%
0.23
%
0.32
%
0.38
%
0.42
%
Allowance for credit losses on loans and
leases to loans
1.14
%
0.72
%
0.73
%
0.77
%
0.80
%
SELECT PERIOD-END STATISTICS
(Unaudited)
3/31/2022
12/31/2021
9/30/2021
6/30/2021
3/31/2021
Shareholders’ equity / total assets
9.5
%
10.8
%
10.6
%
10.9
%
10.5
%
Gross loans / deposits
69.2
%
71.5
%
75.9
%
77.3
%
80.2
%
Non-interest bearing deposits / total
deposits
38.6
%
39.0
%
39.4
%
38.7
%
35.8
%
CONSOLIDATED INCOME STATEMENT
(Dollars in Thousands, Unaudited)
For the three months
ended:
3/31/2022
12/31/2021
3/31/2021
Interest income
$
26,081
$
27,897
$
29,458
Interest expense
1,325
1,331
903
Net interest income
24,756
26,566
28,555
Provision / (benefit) for credit losses on
loans and leases
600
(1,200
)
250
Benefit for credit losses on unfunded loan
commitments
(94
)
-
-
Net interest income after provision
24,250
27,766
28,305
Service charges
3,040
3,169
2,767
BOLI (expense) income
(645
)
203
583
Gain on investments
1,032
-
-
Other noninterest income
2,636
3,730
3,480
Total noninterest income
6,063
7,102
6,830
Salaries and benefits
11,805
10,237
11,151
Occupancy expense
2,294
2,366
2,486
Other noninterest expenses
6,074
9,572
6,634
Total noninterest expense
20,173
22,175
20,271
Income before taxes
10,140
12,693
14,864
Provision for income taxes
2,733
3,072
3,786
Net income
$
7,407
$
9,621
$
11,078
TAX DATA
Tax-exempt muni income
$
1,726
$
1,761
$
1,449
Interest income - fully tax equivalent
$
26,540
$
28,365
$
29,843
PER SHARE DATA
(Unaudited)
For the three months
ended:
3/31/2022
12/31/2021
3/31/2021
Basic earnings per share
$
0.49
$
0.63
$
0.73
Diluted earnings per share
$
0.49
$
0.63
$
0.72
Common dividends
$
0.23
$
0.22
$
0.21
Weighted average shares outstanding
15,021,138
15,226,834
15,223,010
Weighted average diluted shares
15,120,990
15,297,414
15,337,710
Book value per basic share (EOP)
$
21.59
$
23.74
$
22.58
Tangible book value per share (EOP)
$
19.58
$
21.73
$
20.54
Common shares outstanding (EOP)
15,086,032
15,270,010
15,410,763
KEY FINANCIAL RATIOS
(Unaudited)
For the three months
ended:
3/31/2022
12/31/2021
3/31/2021
Return on average equity
8.64
%
10.47
%
12.94
%
Return on average assets
0.88
%
1.10
%
1.40
%
Net interest margin (tax-equivalent)
3.21
%
3.31
%
3.93
%
Efficiency ratio (tax-equivalent)¹
67.08
%
64.86
%
56.43
%
Net charge offs (recoveries) to avg loans
(not annualized)
0.09
%
0.01
%
(0.01
)%
(1)
Noninterest expense as a percentage of the
sum of net interest income and noninterest income excluding net
gains (losses) from securities and bank owned life insurance
income.
NON-GAAP FINANCIAL MEASURES
(Unaudited)
3/31/2022
12/31/2021
3/31/2021
Total stockholders' equity
$
325,691
$
362,494
$
347,981
Less: goodwill and other intangible
assets
30,379
30,632
31,395
Tangible common equity
$
295,312
$
331,862
$
316,586
Total assets
$
3,418,854
$
3,371,014
$
3,326,037
Less: goodwill and other intangible
assets
30,379
30,632
31,395
Tangible assets
$
3,388,475
$
3,340,382
$
3,294,642
Common shares outstanding
15,086,032
15,270,010
15,410,763
Book value per common share
$
21.59
$
23.74
$
22.58
Tangible book value per common share
$
19.58
$
21.73
$
20.54
Equity ratio - GAAP (total stockholders'
equity / total assets
9.53
%
10.75
%
10.46
%
Tangible common equity ratio (tangible
common equity / tangible assets)
8.72
%
9.93
%
9.61
%
NONINTEREST INCOME/EXPENSE
(Dollars in Thousands, Unaudited)
For the three months
ended:
Noninterest income:
3/31/2022
12/31/2021
3/31/2021
Service charges on deposit accounts
$
3,040
$
3,169
$
2,767
Checkcard fees
2,056
2,165
1,894
Bank-owned life insurance
(645
)
203
583
Other service charges and fees
696
992
1,718
Gain on sale of securities
1,032
—
—
Loss on tax credit investment
(113
)
(133
)
(133
)
Other
(3
)
706
1
Total noninterest income
$
6,063
$
7,102
$
6,830
As a % of average interest earning assets
(1)
0.77
%
0.87
%
0.93
%
Noninterest expense:
Salaries and employee benefits
$
11,805
$
10,237
$
11,151
Occupancy costs
Furniture & equipment
454
409
452
Premises
1,840
1,957
2,034
Advertising and marketing costs
406
539
321
Data processing costs
1,485
1,481
1,426
Deposit services costs
2,245
2,298
2,068
Loan services costs
Loan processing
111
158
169
Foreclosed assets
(5
)
(6
)
107
Other operating costs
Telephone & data communications
444
431
380
Postage & mail
56
56
84
Other
419
906
462
Professional services costs
Legal & accounting
546
2,703
442
Other professional service
143
796
897
Stationery & supply costs
85
85
78
Sundry & tellers
139
125
200
Total noninterest expense
$
20,173
$
22,175
$
20,271
As a % of average interest earning assets
(1)
2.57
%
2.72
%
2.75
%
Efficiency ratio (2)(3)
67.08
%
64.86
%
56.43
%
(1)
Annualized
(2)
Tax equivalent
(3)
Noninterest expense as a percentage of the
sum of net interest income and noninterest income excluding net
gains (losses) from securities and bank owned life insurance
income.
AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)
For the quarter ended
For the quarter ended
For the quarter ended
March 31, 2022
December 31, 2021
March 31, 2021
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's
$
194,846
$
93
0.19
%
$
311,386
$
120
0.15
%
$
76,504
$
19
0.10
%
Taxable
744,599
3,490
1.90
%
593,959
2,403
1.61
%
317,254
1,578
2.02
%
Non-taxable
294,409
1,726
3.01
%
285,811
1,679
2.95
%
226,838
1,449
3.28
%
Total investments
1,233,854
5,309
1.90
%
1,191,156
4,202
1.55
%
620,596
3,046
2.24
%
Loans and leases: (3)
Real estate
1,753,394
18,326
4.24
%
1,794,285
20,864
4.61
%
1,879,359
21,391
4.62
%
Agricultural production
33,986
302
3.60
%
38,191
361
3.75
%
46,153
419
3.68
%
Commercial
97,127
1,398
5.84
%
118,159
1,457
4.89
%
191,656
2,451
5.19
%
Consumer
4,448
206
18.78
%
4,720
237
19.92
%
5,422
196
14.66
%
Mortgage warehouse lines
61,255
510
3.38
%
90,736
747
3.27
%
242,865
1,928
3.22
%
Other
1,485
30
8.19
%
1,430
29
8.05
%
1,588
27
6.90
%
Total loans and leases
1,951,695
20,772
4.32
%
2,047,521
23,695
4.59
%
2,367,043
26,412
4.53
%
Total interest earning assets (4)
3,185,549
$
26,081
3.38
%
3,238,677
$
27,897
3.47
%
2,987,639
$
29,458
4.05
%
Other earning assets
15,679
21,425
13,275
Non-earning assets
210,724
206,344
201,114
Total assets
$
3,411,952
$
3,466,446
$
3,202,028
Liabilities and shareholders'
equity
Interest bearing deposits:
Demand deposits
$
202,962
$
106
0.21
%
$
131,810
$
80
0.24
%
$
130,763
$
73
0.23
%
NOW
546,280
82
0.06
%
615,245
112
0.07
%
569,171
101
0.07
%
Savings accounts
467,700
67
0.06
%
451,369
65
0.06
%
391,091
53
0.05
%
Money market
151,339
23
0.06
%
146,174
25
0.07
%
136,422
30
0.09
%
Time deposits
293,684
234
0.32
%
291,516
241
0.33
%
412,416
289
0.29
%
Wholesale brokered deposits
60,000
48
0.32
%
60,000
49
0.32
%
100,000
62
0.25
%
Total interest bearing deposits
1,721,965
560
0.13
%
1,696,114
572
0.13
%
1,739,863
608
0.14
%
Borrowed funds:
Other interest-bearing liabilities
105,238
82
0.31
%
98,326
86
0.35
%
63,449
48
0.31
%
Long-term debt
49,143
428
3.53
%
49,156
430
3.47
%
—
—
0.00
%
Subordinated debentures
35,320
255
2.93
%
35,276
243
2.73
%
35,141
247
2.85
%
Total borrowed funds
189,701
765
1.64
%
147,482
516
1.65
%
98,590
295
1.21
%
Total interest bearing liabilities
1,911,666
1,325
0.28
%
1,878,872
1,331
0.28
%
1,838,453
903
0.20
%
Demand deposits - noninterest bearing
1,093,709
1,120,323
977,137
Other liabilities
59,026
102,838
39,199
Shareholders' equity
347,551
364,413
347,239
Total liabilities and shareholders'
equity
$
3,411,952
$
3,466,446
$
3,202,028
Interest income/interest earning
assets
3.38
%
3.47
%
4.05
%
Interest expense/interest earning
assets
0.17
%
0.16
%
0.12
%
Net interest income and margin
(5)
$
24,756
3.21
%
$
26,566
3.31
%
$
28,555
3.93
%
_________________________ (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 tax
rate.
(3)
Loans are gross of the allowance for
expected credit losses. Loan fees have been included in the
calculation of interest income. Net loan fees and loan acquisition
FMV amortization were $0.4 million and $1.4 million for the
quarters ended March 31, 2022 and 2021, respectively, and $0.8
million for the quarter ended December 31, 2021.
(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/20220425005123/en/
Kevin McPhaill, President/CEO (559) 782‑4900 or (888) 454‑BANK
www.sierrabancorp.com
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