Sierra Bancorp reports strong second quarter
Local bank keeps dividend streak alive
Sierra Bancorp, parent of Bank of the Sierra, reported a strong second quarter with income up 27 percent over the same quarter of last year.
Sierra Bancorp recognized consolidated net income of $5.202 million for the second quarter of 2017, reflecting an increase of $1.116 million, relative to the second quarter of 2016 for the following reasons: Net interest income increased by 17 percent due primarily to a higher average balance of interest-earning assets; the company recorded a $300,000 provision for loan losses in the second quarter of 2017, to provide for loan growth and replenish reserves; noninterest income went up by 17 percent, due in part to fees earned on an expanding deposit account base and increased activity on commercial accounts, a non-recurring prepayment penalty on a large loan, and higher income on bank-owned life insurance; and, non-interest expense increased by 10 percent, with much of the increase coming from costs associated with its expanded branch network pursuant to the Coast acquisition in 2016 and branch openings.
For the second quarter of 2017 the company’s return on average assets was 1.02 percent, return on average equity was 9.75 percent, and diluted earnings per share were $0.37.
For the first six months of 2017 the company recognized net income of $9.754 million, which represents an increase of 20 percent relative to the same period in 2016. The company’s financial performance metrics for the first half of 2017 include an annualized return on average equity of 9.31 percent, a return on average assets of 0.98 percent, and diluted earnings per share of $0.70.
Bank President Kevin Mcphaill is pleased.
“We continue our commitment to growth and expansion, and during this past quarter we saw strong organic increases in loans and deposits in addition to striking agreements to acquire Ojai Community Bank and the Woodlake branch of Citizens Business Bank,” he stated.
“It is our bankers and their drive for excellence that sets us apart; our entire banking team has dedicated themselves to delivering the very best community banking experience for our customers,” he added. “We achieved new record highs in loans, deposits and assets in the first half of the year and we move into the second half with the same energy and focus on growth, demonstrating not just our knowledge, but our ability to execute and ‘win’,” concluded Mcphaill.
Total assets, loans and deposits reached record levels at June 30, thanks to strong organic growth during the first six months of the year. Total assets increased by $45 million during the first half, ending the period at $2.1 billion. The increase in assets resulted primarily from organic growth in real estate loans and agricultural production loans and an increase in investment securities, partially offset by lower utilization on mortgage warehouse lines and a declining level of cash and balances due from banks.
Also, the bank announced it was paying a quarterly cash dividend of $0.14 per share. It will be paid on Aug. 17 to shareholders of record as of Aug. 3.
Including dividends paid by Bank of the Sierra prior to the formation of Sierra Bancorp, the company has paid regular cash dividends to shareholders every year since 1987, comprised of annual dividends from 1987 through 1998 and quarterly dividends since then. The current dividend marks the company’s 74th consecutive regular quarterly cash dividend.
Sierra Bancorp is the holding company for Bank of the Sierra, which is in its 40th year of operations and is the largest independent bank headquartered in the South San Joaquin Valley.