- Loans & Leases, Net of Fees increased by $408.7 million, or
23% quarter-over-quarter, including $116.2 million in Paycheck
Protection Program loans and $109.5 million of seasonal increases
in mortgage warehouse lines
- Deposits grew by $327.4 million, or 15% during the second
quarter of 2020
- Quarterly deposit growth was highlighted by a $245.0 million
increase in noninterest demand deposits which lowered our quarterly
cost of average total deposits to 0.15% as compared to 0.34% in the
prior linked quarter
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, 2020. Sierra Bancorp reported
consolidated net income of $8.3 million, or $0.54 per diluted
share, for the second quarter of 2020, compared to $8.8 million, or
$0.57 per diluted share, in the second quarter of 2019. The
Company's return on average assets and return on average equity
were 1.19% and 10.30%, respectively, in the second quarter of 2020,
as compared to 1.39% and 12.27%, respectively, in the second
quarter of 2019.
For the first six months of 2020, the Company recognized net
income of $16.1 million as compared to $17.7 million for the same
period in 2019. The Company's financial performance metrics for the
first half of 2020 include an annualized return on average equity
of 10.14%, a return on average assets of 1.21%, and diluted
earnings per share of $1.05.
"Some people want it to happen, some wish it
would happen, others make it happen." - Michael Jordan
“We are proud of our team’s ability to move quickly during the
pandemic so our bank could operate effectively,” stated Kevin
McPhaill, President and CEO. “During the second quarter, we elected
to participate in the Paycheck Protection Program to help our
customers through these challenging times. Also, we experienced
exceptional growth in our mortgage warehouse lines and solid
organic growth primarily due to our loan production groups in
Northern and Southern California. We had strong deposit growth
during this period as well. All of these events led to significant
asset growth as we reached $3.0 billion in total assets – another
record for us! While we know the pandemic continues to evolve and
we are in a very dynamic environment, our team is capable and ready
for the challenge. We are proud of our second quarter results and
remain cautiously optimistic as we look to the second half of the
year,” McPhaill concluded.
Financial Highlights
Quarterly Changes (comparisons to the second quarter of
2019)
- The change in quarterly net income was primarily due to a $1.8
million increase in the provision for loan and lease losses due to
continued economic uncertainty.
- Overall net interest income remained relatively unchanged as
declines in loan yields were mostly offset by higher balances and
lower interest expense.
- The $0.8 million favorable increase in noninterest income is
due to a $0.7 million gain from the disposal of a low-income
housing tax credit fund investment, a $0.5 million increase in
bank-owned life insurance (BOLI) income, and a $0.4 million gain
from the sale of debt securities. These increases were partially
offset by a $0.5 million decline in customer service charges.
- Noninterest expense increased by $0.2 million, or 1%, due
mostly to higher deferred compensation expense.
Year to-Date Changes (comparisons to the first six-months of
2019)
- Net income declined by $1.6 million due mostly to an increase
of $3.3 million in the provision for loan and lease losses, offset
by the corresponding increases previously discussed in noninterest
income for the quarterly comparison.
- Noninterest income increased by $1.2 million, or 11%, due
mostly to the changes described above.
Balance Sheet Changes (comparisons to December 31,
2019)
- Total assets increased to $3.1 billion, representing an
increase of $516.2 million, or 20%, during the first half of the
year.
- Loan growth in 2020 of $444.0 million, or 25%, highlighted by a
$205.2 million increase in non-agricultural real estate loans, a
$149.0 million favorable change in outstanding balances of mortgage
warehouse lines, and a $106.0 million increase in commercial and
industrial loans.
- Deposits totaled $2.5 billion at June 30, 2020, representing a
year-to-date increase of $338.4 million, or 16%. The growth in
deposits came primarily from core transaction and savings accounts,
while higher-cost time deposits decreased.
Other financial highlights are reflected in the following
table.
FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share
data)
At or For the
At or For the
Three Months
At or For the
Three Months Ended
Increase
Ended
Increase
Six Months Ended
Increase
6/30/2020
3/31/2020
(Decrease)
6/30/2019
(Decrease)
6/30/2020
6/30/2019
(Decrease)
Net Income
$ 8,303
$ 7,807
+6%
$ 8,829
-6%
$ 16,110
$ 17,724
-9%
Diluted Earnings per share
0.54
0.51
+6%
0.57
-5%
1.05
1.15
-9%
Return on Average Assets
1.19%
1.23%
-3%
1.39%
-14%
1.21%
1.41%
-14%
Return on Average Equity
10.30%
9.97%
+3%
12.27%
-16%
10.14%
12.62%
-20%
Net Interest Margin (Tax-Equiv.)
3.81%
4.13%
-8%
4.21%
-10%
3.97%
4.25%
-7%
Yield on Average Loans and Leases
4.56%
5.21%
-12%
5.53%
-18%
4.86%
5.58%
-13%
Cost of Average Total Deposits
0.15%
0.34%
-56%
0.57%
-74%
0.24%
0.57%
-58%
Efficiency Ratio (Tax-Equiv.) (1)
57.78%
58.88%
-2%
58.17%
-1%
58.33%
58.46%
0%
Total Assets
3,110,044
2,670,469
+16%
2,577,032
+21%
3,110,044
2,577,032
+21%
Loans & Leases Net of Deferred
Fees
2,209,480
1,800,766
+23%
1,780,730
+24%
2,209,480
1,780,730
+24%
Noninterest Demand Deposits
949,662
704,700
+35%
658,900
+44%
949,662
658,900
+44%
Total Deposits
2,506,754
2,179,391
+15%
2,179,098
+15%
2,506,754
2,179,098
+15%
Noninterest-bearing Deposits over Total
Deposits
37.9%
32.3%
+17%
30.2%
+25%
37.9%
30.2%
+25%
Shareholders Equity / Total Assets
10.5%
12.0%
-13%
11.5%
-9%
10.5%
11.5%
-9%
Tangible Common Equity Ratio
9.6%
10.9%
-12%
10.4%
-8%
9.6%
10.4%
-8%
Book Value per Share
$ 21.55
$ 21.03
+2%
$ 19.36
+11%
$ 21.55
$19.36
+11%
Tangible Book Value per Share
$ 19.43
$ 18.89
+3%
$ 17.19
+13%
$ 19.43
$17.19
+13%
(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.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income was relatively unchanged at $24.1 million,
for the second quarter of 2020 over the second quarter of 2019, but
decreased $0.2 million to $47.9 million for the first six months of
2020 relative to the same period in 2019. For the second quarter of
2020, growth in average interest-earning assets totaled $250
million, or 11%, as compared to the second quarter of 2019. The
yield on these balances was 81 basis points lower for the same
period. This decrease in yield was partially offset by a 61 basis
point drop in the cost of our interest-bearing liabilities for the
same period. Net interest income for the comparative year-to-date
periods declined due to a 62 basis point decline in the yield on
earning assets partially offset by a 47 basis point drop in
interest paid on liabilities. The net impact of this lower rate was
a 28 basis point decrease in our net interest margin. Our net
interest margin has been impacted primarily by the following:
- Market conditions, including five interest rate cuts by the
Federal Open Market Committee for 225 bps over the past 12 months,
negatively impacted our yield on existing adjustable and variable
rate portfolio loans and creating a lower initial interest rate for
new loan volumes. In addition, given the low rate environment loan
demand for our mortgage warehouse lines increased, resulting in a
$62.0 million, or 43%, increase in average balances during the
second quarter 2020. The average interest rate on mortgage
warehouse lines declined to 2.98% from 3.52% for the comparative
quarters.
- Participation in the SBA Paycheck Protection Program (PPP)
loans, issuing 1,241 loans for $116.2 million to assist our
customers impacted by the COVID-19 Pandemic. Loan fees related to
PPP loans are accreted over the stated life of the loan.
On June 30, 2020, our outstanding fixed-rate loans represented
33% of our loan portfolio. Adjustable-rate loans represent 52% of
our loan portfolio and range in adjustment periods from 30 days to
10 years with most of these subject to repricing after 3 years.
There are $64.9 million of these adjustable-rate loans scheduled to
adjust in the next quarter, and $22.4 million will reprice in
smaller amounts monthly over the fourth quarter of 2020.
Approximately 75% or $857.5 million of these loans will begin
repricing after three years, with $519.4 million repricing after
five years. About 15% of our total portfolio, or $317.4 million,
consists of variable rate loans. Of these variable rate loans,
approximately $110.8 million have floors, with $102.4 million at
their floors, which limited the overall reduction in rates.
Moreover, discount accretion on loans from whole-bank
acquisitions enhanced our net interest margin by one basis point in
the second quarter of 2020 as compared to five basis points in the
second quarter 2019, and two basis points for the first six months
of 2020 relative to four basis points in the first six months of
2019.
Interest expense was $1.2 million for the second quarter of
2020, a decline of $2.3 million, or 65%, relative to the second
quarter of 2019. For the first six months of 2020, compared to the
first six months of 2019, interest expense declined $3.6 million,
or 51%, to $3.5 million. The significant decline in interest
expense is attributable to a favorable shift in deposit mix as
higher cost time deposits declined by $99.0 million or 18% in the
second quarter of 2020 as compared to the second quarter of 2019,
and fell by $70.8 million or 14% compared to the fourth quarter of
2019, while lower or no cost transaction and savings accounts
increased $418.2 million or 28% for the second quarter of 2020
compared to the same period in 2019 and increased by $402.7 million
or 26% over the fourth quarter of 2019.
Provision for Loan and Lease Losses
The Company recorded a loan and lease loss provision of $2.2
million in the second quarter of 2020 relative to a provision of
$0.4 million in the second quarter of 2019, and a year-to-date loan
loss provision of $4.0 million in 2020 as compared to $0.7 million
for the same period in 2019. The Company is subject to the adoption
of 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) in 2020. However, the
Company elected under Section 4014 of the Coronavirus Aid, Relief,
and Economic Security (CARES) Act to defer the implementation of
CECL until the earlier of when the national emergency related to
the outbreak of COVID-19 ends or December 31, 2020. Although this
deferral will still require CECL to be implemented as of January 1,
2020, the Company elected to postpone implementation in order to
provide additional time to assess better the impact of the COVID-19
pandemic on the expected lifetime credit losses. There is increased
uncertainty on the local, regional, and national economy as a
result of local and state stay-at-home orders, as well as relief
measures provided at a national, state, and local level. Further,
the Company has taken actions to mitigate the impact on credit
losses, including permitting short-term payment deferrals to
current customers, as well as providing bridge loans and SBA PPP
loans. More time is needed to assess the impact of this uncertainty
and related actions on the Company's allowance for loan and lease
losses under the CECL methodology.
The Company's $1.8 million, or 450%, increase in provision for
loan and lease losses in the second quarter of 2020 as compared to
the second quarter of 2019, and the $3.3 million increase, or 471%,
in the first six months of 2020 compared to the same period in 2019
is due mostly to the estimated impact that COVID-19 will have on
the economy and our loan customers. Management adjusted its
qualitative risk factors under our current incurred loss model for
economic conditions, changes in the mix of the portfolio due to
loans subject to a payment deferral, potential changes in
collateral values due to reduced cash flows, and external factors
such as government actions. In particular, the uncertainty
regarding our customers' ability to repay loans could be adversely
impacted by COVID-19 given higher unemployment rates, requests for
payment deferrals, temporary business shut-downs, and reduced
consumer and business spending.
Noninterest Income
Total noninterest income reflects increases of $1.0 million, or
18%, for the quarterly comparison and $1.2 million, or 11% for the
year-to-date period. The quarterly comparison includes a $0.7
million non-recurring gain resulting from the wrap-up of a
low-income housing tax credit fund investment and a $0.4 million
gain from the sale of debt securities. The gain on debt securities
was a result of a restructuring of the portfolio to sell
smaller-balance or variable rate SBA and FNMA bonds, as well as
certain municipal securities with potential higher credit risk. The
quarter also reflects a $0.5 million favorable swing in bank-owned
life insurance (BOLI) income, resulting from fluctuations in income
on BOLI associated with deferred compensation plans. Those
increases were partially offset by lower service charges on
deposits. The main difference between the quarterly and
year-to-date variances in noninterest income came in BOLI income,
which reflects a decrease of $0.3 million for the year-to-date
period rather than an increase, again due to significant
fluctuations in deferred compensation BOLI income, offset by an
increase of $0.2 million in the valuation gain of restricted equity
investments owned by the Company.
Service charges on customer deposit account income declined by
$0.5 million, or 17%, to $2.6 million in the second quarter of 2020
as compared to the second quarter of 2019. This service charge
income was $0.3 million lower, or 5%, in the first six months of
2020, as compared to the same period in 2019. These declines are
primarily a result of changes in overdraft income. Waived overdraft
fees were similar in both the quarterly and year to date
comparison.
Noninterest Expense
Total noninterest expense increased by $0.4 million, or 2%, in
the second quarter of 2020 relative to the second quarter of 2019,
and by $0.3 million, or 1%, in the first six months of 2020 as
compared to the first six months of 2019.
Salaries and Benefits were $0.3 million, or 3%, higher in the
second quarter of 2020 as compared to the second quarter of 2019
and $1.2 million higher for the first six months of 2020 compared
to the same period in 2019. The reason for this increase is due to
several factors, including merit increases for employees due to
annual performance evaluations for 2020. These increases were
mitigated by the impact of deferred salaries related to loan
origination costs, which were $0.8 million higher in the second
quarter of 2020 relative to the second quarter of 2019, and $0.5
million higher for the first six months of 2020 compared to the
same period in 2019. There have not been any permanent or temporary
reductions in employees as a result of COVID-19.
Occupancy expenses were roughly the same for the respective
comparative periods. Further, other noninterest expense was
relatively unchanged for the second quarter 2020 as compared to the
second quarter in 2019, but was $0.9 million lower for the first
half of 2020 as compared to the same period in 2019. The variance
for year-to-date 2020 compared to the same period in 2019 was
primarily driven by a $0.7 million, or 30%, decline in professional
services expenses. Those professional services variances include a
$0.2 million decrease in FDIC assessments due to the Small Bank
Assessment credits applied against FDIC deposit insurance costs, a
$0.2 million decrease in deferred compensation expense for
directors, which is linked to the changes in BOLI income, and a
$0.2 million reduction in consulting costs.
The Company's provision for income taxes was 23.2% of pre-tax
income in the second quarter of 2020 relative to 26.4% in the
second quarter of 2019, and 23.6% of pre-tax income for the first
half of 2020 relative to 25.3% for the same period in 2019. The
decline in tax rate in the second quarter of 2020 is due mostly to
a higher percent of the income being tax-exempt income.
Balance Sheet Summary
Balance sheet changes during the first half of 2020 include an
increase in total assets of $516.2 million, or 20%, due mostly to
growth in loan portfolio balances. In addition to $449.5 million in
loan growth, there was a $76.5 million increase in cash and due
from banks at June 30, 2020, as compared to December 31, 2019. The
increase was mostly due to additional cash borrowed at the end of
the quarter for expected mortgage line utilization.
For the first six months of 2020, gross loans were up by $449.5
million, or 26%, including increases of $149.0 million in mortgage
warehouse lines, $205.2 million increase in non-agricultural real
estate loans, and a $106.0 million increase in commercial and
industrial loans. Mortgage warehouse loan balances increased due to
market factors favorably impacting line utilization due to both
mortgage originations and refinancing activity. Non-agricultural
real estate loan balances increased due to deliberate and
concentrated efforts of our Northern and Southern market loan
production teams. The growth in these markets was mostly due to
commercial real estate and the primary driver of our $278.7 million
increase in non-owner occupied commercial real estate loans. The
increases in Commercial and Industrial loan balances were impacted
by our participation in the SBA PPP product as authorized by the
CARES Act, to assist our customers negatively affected by the
COVID-19 pandemic.
The recent growth in loans, and in particular, real estate
loans, was accomplished without relaxing any of the Company’s
credit standards that had been tightened after the great recession.
Instead, the growth came by diversifying geography with new loan
teams announced in the first quarter 2020 in our Northern and
Southern California markets. Those teams have maintained these
enhanced underwriting standards through the pandemic and have not
compromised credit quality when sourcing new loans. However, no
assurance can be given as to how these loans will perform over
their lifetime.
With regards to line utilization, unused commitments, excluding
mortgage warehouse and consumer overdraft lines, were $304.8
million on June 30, 2020, as compared to $303.4 million on December
31, 2019. Total utilization excluding mortgage warehouse and
consumer overdraft lines was 86% at June 30, 2020, as compared to
59% at December 31, 2019. Commercial line utilization was 59% on
June 30, 2020, as compared to 61% on December 31, 2019. Mortgage
warehouse utilization was 79% at June 30, 2020, as compared to 59%
on December 31, 2019.
The Company’s total intangible assets decreased slightly to
$32.2 million at June 30, 2020, from $32.7 million at December 31,
2019. Goodwill remained at $27.4 million during the first six
months of 2020 and was approximately 8% of total capital at June
30, 2020. The Company performed a qualitative test for impairment
and determined that no goodwill impairment was probable at June 30,
2020. The Company will continue to evaluate qualitative factors to
determine if a quantitative test for goodwill impairment is
necessary.
Deposit balances reflect growth of $338.4 million, or 16%,
during the first six months of 2020. Core non-maturity deposits
increased by $409.1 million, or 25%, while customer time deposits
decreased by $30.8 million, or 7%. Wholesale brokered deposits
decreased by $40.0 million to $10.0 million. Overall
noninterest-bearing deposits as a percent of total deposits at June
30, 2020, increased to 37.9%, as compared to 31.9% at December 31,
2019. Other interest-bearing liabilities of $204.4 million on June
30, 2020, include $41.4 million of customer repurchase agreements,
$153.0 million in overnight FHLB borrowings, $5.0 million in short
term borrowings, and $5.0 million in long term borrowings. The
increase in overnight FHLB borrowings was due mostly to draws for
expected higher mortgage warehouse line utilization in the last
week of the quarter as average balance of FHLB borrowings was $7.8
million in 2020.
The Company continues to have substantial liquidity. At June 30,
2020, and December 31, 2019, the Company had the following sources
of primary and secondary liquidity ($ in thousands):
Primary and Secondary Liquidity
Sources
June 30,
2020
December
31, 2019
Cash and Due From Banks
$
88,705
$
80,076
Unpledged Investment Securities
356,903
366,012
Excess Pledged Securities
60,462
70,955
FHLB Borrowing Availability
293,454
443,200
Unsecured Lines of Credit
80,000
80,000
Funds Available through Fed Discount
Window
60,102
59,198
Totals
$
939,626
$
1,099,441
In addition to the primary and secondary sources of liquidity
listed above, the Company has also been approved to borrow $116.2
million from the Federal Reserve’s Paycheck Protection Program
Liquidity Facility (PPPLF). Should the Company wish to draw on the
PPPLF it would be required to pledge individual SBA PPP loans as
collateral. The loans are taken as collateral at their face value.
Due to the Company’s liquidity throughout the second quarter of
2020 and expected liquidity in the third quarter of 2020, it has
elected not to utilize the PPPLF at this time.
Total capital of $327.4 million at June 30, 2020, reflects an
increase of $18.1 million, or 6%, relative to year-end 2019. The
increase in equity during the first half of 2020 was due to the
addition of $16.1 million in net income, and a $10.2 million
favorable swing in accumulated other comprehensive income/loss, net
of $6.1 million in dividends paid, and $2.6 million in stock
repurchases prior to March 15, 2020. The remaining difference is
related to stock options exercised during the quarter.
Asset Quality
Total nonperforming assets, comprised of non-accrual loans and
foreclosed assets, increased by $2.2 million to $8.7 million for
the first half of 2020 primarily due to the impact of one
commercial real estate credit that went into foreclosure. The
Company's ratio of nonperforming loans to gross loans decreased to
0.26% at June 30, 2020, from 0.33% at December 31, 2019. All of the
Company's impaired assets are periodically reviewed and are either
well-reserved based on current loss expectations or are carried at
the fair value of the underlying collateral, net of expected
disposition costs. The single loan which moved to other real estate
owned during the quarter has a pending contract.
The Company's allowance for loan and lease losses was $13.6
million at June 30, 2020, as compared to a balance of $9.9 million
at December 31, 2019, and $9.9 million at June 30, 2019. The $3.6
million increase during the first half of the year resulted from
the addition of a $4.0 million loan loss provision in the first
half of 2020, less $0.4 million in net loan balances charged off
during the period. The additional loan loss provision in the first
half of 2020 was precipitated primarily by qualitative factors
associated with economic uncertainty during these unprecedented
times. For further information regarding the Company's decision to
defer the implementation of CECL under Section 4014 of the CARES
Act, as well as further detail on the increase in provision during
the second quarter of 2020, please see the discussion above under
Provision for Loan and Lease Losses. The allowance was 0.61% of
total loans at June 30, 2020, and 0.56% at both December 31, 2019,
and June 30, 2019. Management's detailed analysis indicates that
the Company's allowance for loan and lease losses should be
sufficient to cover credit losses inherent in loan and lease
balances outstanding as of June 30, 2020, but no assurance can be
given that the Company will not experience substantial future
losses relative to the size of the allowance.
As discussed above under the Provision for Loan and Lease
Losses, the Company recorded $4.0 million in provision for loan and
lease losses in the first half of 2020 as compared to $0.7 million
in the first half of 2019. This increase is primarily due to
increased uncertainty of economic risks associated with the
COVID-19 pandemic. With respect to exposures related to the
COVID-19 pandemic, the Company had 83 relationships in the
hospitality industry totaling $222.5 million at June 30, 2020. In
addition to loans in the hospitality sector, we have approximately
$17.0 million of loans in the oil and gas industry, and $66.0
million of loans to retail businesses at June 30, 2020.
The Company provided payment deferrals to customers under
Section 4013 of the CARES Act during the second quarter of 2020.
These modifications typically provided deferrals of both principal
and interest for 180 days. Further, the Company believed that it
was a better use of resources to create a new monitoring process
with dedicated internal personnel to monitor the deferrals over the
180-day deferral period. These employees would have likely spent
considerable time working through deferral extensions had we
initially offered 90-day deferrals. Instead, these dedicated
resources within credit administration are proactively engaged with
our borrowers who have loan deferrals to better understand each
borrower’s situation, as well as determine the likelihood that each
borrower will be able to resume payments after the end of the
modification period. This new monitoring process started in June
with the largest loan relationships. As of June 30, 2020, there
were no Section 4013 loan deferrals that were downgraded to
impaired or nonaccrual status, or that were treated as a troubled
debt restructuring.
As of June 30, 2020, 313 customers, for a total of $386.2
million, had executed a loan modification under Section 4013 of the
CARES Act. Approximately 97% of these loan deferrals were for
commercial customers with 38% of these modifications, or $145.0
million, in the hospitality industry. In addition, there were $98.7
million, or 26%, that are lessors of real estate, both commercial
and residential; $45.5 million, or 12%, in the dairy industry; and
$28.7 million, or 7%, related to convenience stores, and $2.7
million, or 0.7%, in the healthcare industry. Of the commercial
deferrals, there were $10.1 million that were unsecured. Consumer
deferrals totaled $11.2 million, of which $7.5 million were
mortgage related.
With respect to the secured commercial loans, the Company’s
maximum initial loan-to-values for investor real estate is
generally 65%, which would include loans in the hospitality
industry. For owner-occupied real estate, we generally lend up to
75% loan-to value. As of June 30, 2020, nearly all of the loan
deferral requests that were secured by real estate were below these
internal guidelines at loan origination.
About Sierra Bancorp
Sierra Bancorp is the holding company for Bank of the Sierra
(www.bankofthesierra.com), which is in its 43rd 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, Los Angeles, Ventura, San Luis
Obispo and Santa Barbara. The Bank also maintains an online branch
and provides specialized lending services through an agricultural
credit center, an SBA center and a dedicated loan production office
in Rocklin, California. In 2020, 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, 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,
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
(balances in $000's, unaudited except
12/31/2019)
Jun '20 vs
Jun '20 vs
Jun '20 vs
ASSETS
6/30/2020
3/31/2020
Mar
'20
12/31/2019
Dec
'19
6/30/2019
Jun
'19
Cash and Due from Banks
$ 156,611
$ 106,992
+46%
$ 80,077
+96%
$ 67,790
+131%
Investment Securities
599,333
620,154
-3%
600,799
0%
577,266
+4%
Real Estate Loans (non-Agricultural)
1,463,235
1,259,448
+16%
1,258,081
+16%
1,285,557
+14%
Agricultural Real Estate Loans
134,454
141,740
-5%
144,033
-7%
152,619
-12%
Agricultural Production Loans
48,516
49,199
-1%
48,036
+1%
51,509
-6%
Comm'l & Industrial Loans &
Leases
221,502
111,990
+98%
115,532
+92%
124,974
+77%
Mortgage Warehouse Lines
338,124
228,608
+48%
189,103
+79%
154,954
+118%
Consumer Loans
6,266
7,040
-11%
7,780
-19%
8,286
-24%
Gross Loans & Leases
2,212,097
1,798,025
+23%
1,762,565
+26%
1,777,899
+24%
Deferred Loan & Lease Fees
(2,617)
2,741
-195%
2,896
-190%
2,831
-192%
Loans & Leases Net of Deferred
Fees
2,209,480
1,800,766
+23%
1,765,461
+25%
1,780,730
+24%
Allowance for Loan & Lease Losses
(13,560)
(11,453)
+18%
(9,923)
+37%
(9,883)
+37%
Net Loans & Leases
2,195,920
1,789,313
+23%
1,755,538
+25%
1,770,847
+24%
Bank Premises & Equipment
27,779
28,425
-2%
27,435
+1%
28,385
-2%
Other Assets
130,401
125,585
+4%
129,970
0%
132,744
-2%
Total Assets
$ 3,110,044
$ 2,670,469
+16%
$ 2,593,819
+20%
$ 2,577,032
+21%
LIABILITIES & CAPITAL
Noninterest Demand Deposits
$ 949,662
$ 704,700
+35%
$ 690,950
+37%
$ 658,900
+44%
Int-Bearing Transaction Accounts
641,816
576,014
+11%
549,812
+17%
570,763
+12%
Savings Deposits
346,262
304,894
+14%
294,317
+18%
289,872
+19%
Money Market Deposits
125,419
113,766
+10%
118,933
+5%
117,010
+7%
Customer Time Deposits
433,595
450,017
-4%
464,362
-7%
492,553
-12%
Wholesale Brokered Deposits
10,000
30,000
-67%
50,000
-80%
50,000
-80%
Total Deposits
2,506,754
2,179,391
+15%
2,168,374
+16%
2,179,098
+15%
Junior Subordinated Debentures
35,035
34,990
0%
34,945
0%
34,856
+1%
Other Interest-Bearing Liabilities
204,449
103,461
+98%
45,711
+347%
32,667
+526%
Total Deposits & Int.-Bearing
Liabilities
2,746,238
2,317,842
+18%
2,249,030
+22%
2,246,621
+22%
Other Liabilities
36,373
33,168
+10%
35,504
+2%
33,559
+8%
Total Capital
327,433
319,459
+2%
309,285
+6%
296,852
+10%
Total Liabilities & Capital
$ 3,110,044
$ 2,670,469
+16%
$ 2,593,819
+20%
$ 2,577,032
+21%
GOODWILL & INTANGIBLE
ASSETS
(balances in $000's, unaudited except
12/31/2019)
Jun '20 vs
Jun '20 vs
Jun '20 vs
6/30/2020
3/31/2020
Mar '20
12/31/2019
Dec '19
6/30/2019
Jun '19
Goodwill
$ 27,357
$ 27,357
0%
$ 27,357
0%
$ 27,357
0%
Core Deposit Intangible
4,844
5,112
-5%
5,381
-10%
5,918
-18%
Total Intangible Assets
$ 32,201
$ 32,469
-1%
$ 32,738
-2%
$ 33,275
-3%
CREDIT QUALITY
(balances in $000's, unaudited)
Jun '20 vs
Jun '20 vs
Jun '20 vs
6/30/2020
3/31/2020
Mar '20
12/31/2019
Dec '19
6/30/2019
Jun '19
Non-Accruing Loans
$ 5,808
$ 7,351
-21%
$ 5,737
+1%
$ 4,120
+41%
Foreclosed Assets
2,893
766
+278%
800
+262%
770
+276%
Total Nonperforming Assets
$ 8,701
$ 8,117
+7%
$ 6,537
+33%
$ 4,890
+78%
Performing TDR's (not incl. in NPA's)
$ 8,708
$ 8,188
+6%
$ 8,415
+3%
$ 9,246
-6%
Non-Perf Loans to Gross Loans
0.26%
0.41%
0.33%
0.23%
NPA's to Loans plus Foreclosed Assets
0.39%
0.45%
0.37%
0.27%
Allowance for Ln Losses to Loans
0.61%
0.64%
0.56%
0.56%
SELECT PERIOD-END STATISTICS
(unaudited)
6/30/2020
3/31/2020
12/31/2019
6/30/2019
Shareholders Equity / Total Assets
10.5%
12.0%
11.9%
11.5%
Gross Loans / Deposits
88.2%
82.5%
81.3%
81.6%
Non-Int. Bearing Dep. / Total Dep.
37.9%
32.3%
31.9%
30.2%
CONSOLIDATED INCOME STATEMENT
(in $000's, unaudited)
Qtr Ended:
2Q20 vs
Qtr Ended:
2Q20 vs
Six Months Ended:
YTD20 vs
6/30/2020
3/31/2020
1Q20
6/30/2019
2Q19
6/30/2020
6/30/2019
YTD19
Interest Income
$
25,386
$
26,051
-3%
$
27,788
-9%
$
51,437
$
55,271
-7%
Interest Expense
1,243
2,264
-45%
3,589
-65%
3,508
7,099
-51%
Net Interest Income
24,143
23,787
+1%
24,199
0%
47,929
48,172
-1%
Provision for Loan & Lease Losses
2,200
1,800
+22%
400
+450%
4,000
700
+471%
Net Int after Provision
21,943
21,987
0%
23,799
-8%
43,929
47,472
-7%
Service Charges
2,618
3,183
-18%
3,151
-17%
5,802
6,094
-5%
BOLI Income
649
38
+1608%
127
+411%
687
1,027
-33%
Gain (Loss) on Investments
390
-
NM
22
+1673%
390
28
+1293%
Other Noninterest Income
3,243
2,885
+12%
2,555
+27%
6,128
4,613
+33%
Total Noninterest Income
6,900
6,106
+13%
5,855
+18%
13,007
11,762
+11%
Salaries & Benefits
9,266
10,172
-9%
8,994
+3%
19,438
18,237
+7%
Occupancy Expense
2,504
2,327
+8%
2,450
+2%
4,832
4,811
0%
Other Noninterest Expenses
6,263
5,319
+18%
6,212
+1%
11,581
12,461
-7%
Total Noninterest Expense
18,033
17,818
+1%
17,656
+2%
35,851
35,509
+1%
Income Before Taxes
10,810
10,275
+5%
11,998
-10%
21,085
23,725
-11%
Provision for Income Taxes
2,507
2,468
+2%
3,169
-21%
4,975
6,001
-17%
Net Income
$
8,303
$
7,807
+6%
$
8,829
-6%
$
16,110
$
17,724
-9%
TAX DATA
Tax-Exempt Muni Income
$
1,440
$
1,339
+8%
$
1,072
+34%
$
2,778
$
2,117
+31%
Interest Income - Fully Tax Equivalent
$
25,769
$
26,407
-2%
$
28,073
-8%
$
52,175
$
55,834
-7%
NET CHARGE-OFFS
$
93
$
270
-66%
$
(45)
NM
$
363
$
567
-36%
Note: An "NM" designation indicates
that the percentage change is "Not Meaningful", likely due to the
fact that numbers for the comparative periods are of opposite signs
or because the denominator is zero
PER SHARE DATA
(unaudited)
Qtr Ended:
2Q20 vs
Qtr Ended:
2Q20 vs
Six Months Ended:
YTD20 vs
6/30/2020
3/31/2020
1Q20
6/30/2019
2Q19
6/30/2020
6/30/2019
YTD19
Basic Earnings per Share
$0.55
$0.51
+8%
$0.58
-5%
$1.06
$1.16
-9%
Diluted Earnings per Share
$0.54
$0.51
+6%
$0.57
-5%
$1.05
$1.15
-9%
Common Dividends
$0.20
$0.20
0%
$0.18
+11%
$0.40
$0.36
+11%
Wtd. Avg. Shares Outstanding
15,191,823
15,262,252
0%
15,329,907
-1%
15,226,748
15,320,784
-1%
Wtd. Avg. Diluted Shares
15,237,655
15,340,017
-1%
15,458,320
-1%
15,288,009
15,453,212
-1%
Book Value per Basic Share (EOP)
$21.55
$21.03
+2%
$19.36
+11%
$21.55
$19.36
+11%
Tangible Book Value per Share (EOP)
$19.43
$18.89
+3%
$17.19
+13%
$19.43
$17.19
+13%
Common Shares Outstanding (EOP)
15,192,838
15,190,038
0%
15,332,550
-1%
15,192,838
15,332,550
-1%
KEY FINANCIAL RATIOS
(unaudited)
Qtr Ended:
Qtr Ended:
Six Months Ended:
6/30/2020
3/31/2020
6/30/2019
6/30/2020
6/30/2019
Return on Average Equity
10.30%
9.97%
12.27%
10.14%
12.62%
Return on Average Assets
1.19%
1.23%
1.39%
1.21%
1.41%
Net Interest Margin (Tax-Equiv.)
3.81%
4.13%
4.21%
3.97%
4.25%
Efficiency Ratio (Tax-Equiv.)
57.78%
58.88%
58.17%
58.33%
58.46%
Net C/O's to Avg Loans (not
annualized)
0.00%
0.02%
0.00%
0.02%
0.03%
AVERAGE BALANCE SHEET, INTEREST
INCOME/EXPENSE, & YIELD/RATE
(balances in $000's, unaudited)
For the quarter ended
For the quarter ended
For the quarter ended
June 30, 2020
March 31, 2020
June 30, 2019
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
Average Balance
Income/ Expense
Yield/ Rate
Assets
Investments:
Federal funds sold/int-earning due
from's
$ 53,209
$ 12
0.09%
$ 37,124
$ 140
1.52%
$ 18,795
$ 115
2.45%
Taxable
403,517
2,250
2.24%
408,591
2,460
2.42%
425,498
2,591
2.44%
Non-taxable
216,746
1,440
3.38%
195,690
1,339
3.48%
149,555
1,072
3.64%
Total investments
673,472
3,702
2.44%
641,405
3,939
2.69%
593,848
3,778
2.74%
Loans and Leases:
Real estate
1,477,380
18,355
5.00%
1,394,911
18,722
5.40%
1,459,871
20,098
5.52%
Agricultural Production
47,806
452
3.80%
48,532
583
4.83%
51,285
793
6.20%
Commercial
170,876
1,080
2.54%
107,696
1,097
4.10%
120,081
1,537
5.13%
Consumer
6,667
225
13.57%
7,583
368
19.52%
8,661
292
13.52%
Mortgage warehouse lines
206,669
1,532
2.98%
144,621
1,264
3.52%
98,249
1,239
5.06%
Other
2,811
39
5.58%
5,242
78
5.98%
3,426
51
5.97%
Total loans and leases
1,912,209
21,683
4.56%
1,708,585
22,112
5.21%
1,741,573
24,010
5.53%
Total interest earning assets
2,585,681
$ 25,385
4.01%
2,349,990
$ 26,051
4.52%
2,335,421
$ 27,788
4.82%
Other earning assets
13,190
12,841
12,505
Non-earning assets
207,623
196,906
204,491
Total assets
$ 2,806,494
$ 2,559,737
$ 2,552,417
Liabilities and shareholders'
equity
Interest bearing deposits:
Demand deposits
$ 134,159
$ 71
0.21%
$ 88,731
$ 62
0.28%
$ 120,018
$ 88
0.29%
NOW
481,679
83
0.07%
456,586
122
0.11%
437,040
134
0.12%
Savings accounts
327,833
46
0.06%
297,721
73
0.10%
289,767
77
0.11%
Money market
125,594
31
0.10%
117,249
43
0.15%
123,482
43
0.14%
Time Deposits
442,762
625
0.57%
460,551
1,367
1.19%
489,486
2,467
2.02%
Wholesale Brokered Deposits
19,890
37
0.75%
40,824
167
1.65%
47,890
284
2.38%
Total interest bearing deposits
1,531,917
893
0.23%
1,461,662
1,834
0.50%
1,507,683
3,093
0.82%
Borrowed funds:
Junior Subordinated Debentures
35,009
311
3.57%
34,962
394
4.53%
34,830
470
5.41%
Other Interest-Bearing Liabilities
45,936
39
0.34%
33,432
36
0.43%
22,546
26
0.46%
Total borrowed funds
80,945
350
1.74%
68,394
430
2.53%
57,376
496
3.47%
Total interest bearing liabilities
1,612,862
$ 1,243
0.31%
1,530,056
$ 2,264
0.60%
1,565,059
$ 3,589
0.92%
Demand deposits - Noninterest bearing
830,333
678,592
655,136
Other liabilities
39,155
36,220
43,550
Shareholders' equity
324,144
314,869
288,672
Total liabilities and shareholders'
equity
$ 2,806,494
$ 2,559,737
$ 2,552,417
Interest income/interest earning
assets
4.01%
4.52%
4.82%
Interest expense/interest earning
assets
0.20%
0.39%
0.61%
Net interest income and margin
$ 24,142
3.81%
$ 23,787
4.13%
$ 24,199
4.21%
Note: Where impacted by non-taxable
income, yields and net interest margins have been computed on a tax
equivalent basis utilizing a 21% tax rate
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200720005117/en/
Kevin McPhaill, President/CEO (559) 782‑4900 or (888) 454‑BANK
www.sierrabancorp.com
Sierra Bancorp (NASDAQ:BSRR)
Historical Stock Chart
From Apr 2024 to May 2024
Sierra Bancorp (NASDAQ:BSRR)
Historical Stock Chart
From May 2023 to May 2024