Sierra Bancorp, the parent company of Bank of the Sierra, announced a record quarter as net income grew by 16 percent from a year earlier.
Bank of the Sierra is based in Porterville, in the San Joaquin Valley, and has 12 branches in the tri-county region, the result of a series of acquisitions of Central Coast banks between 2014 and 2017.
In the third quarter of 2020, the bank had net income of $10.4 million, or 67 cents per share, up from $9 million, or 58 cents per share, in the third quarter of 2019.
In its Oct. 19 earnings release, the bank attributed the increase to higher net interest income on higher loan balances and higher noninterest income, as well as a decrease in interest expenses, as the bank saw more non-interest-bearing deposits and lower rates on remaining deposits. Sierra Bancorp also set aside more to offset possible loan and leases losses, as well as noninterest expenses.
“As we continue to navigate these challenging times, we are very proud to serve our communities as demonstrated by our continued strong loan growth,” Kevin McPhaill, the bank’s president and CEO, said in the release. “This robust loan growth coupled with a continued focus on efficiency resulted in record high earnings. During these unique times, our foundation as a community bank drives our bankers to find new ways to continue to meet our customers’ needs. The coming months will bring further challenges, but we are determined to use them as opportunities to help our communities, customers, and employees succeed.”
Comparing to the first nine months of 2019, net income so far in 2020 has been “relatively flat,” the bank said, with a $200,000 net decrease. The bank has put $4.3 million more towards the provision for loan and lease losses than it did in the first nine months of the previous year. At the same time, total assets have grown by 23 percent to $3.2 billion.
The bank’s noninterest expenses increased by $2.2 million, half of which was because of an increase in salaries. Another $400,000 was because of an increase in foreclosed asset expenses, and $500,000 was an increase in director’s deferred compensation.