Sierra Bancorp reported record earnings boosted by lower loan and lease losses and improvements to the overall economy, the bank announced July 19.
The parent company of Bank of the Sierra said it had $11.7 million in net income for the quarter ended June 30, or 76 cents per diluted share, compared to $8.3 million in the same quarter a year earlier, or 54 cents per share. Bank of the Sierra is based in Porterville and has nine branches in the tri-county region.
Sierra Bancorp said much of the increase was due to lowering its provision for loan and lease losses by $2.1 million. The bank’s leadership felt comfortable enough to lower it that much because of improvements to the economy, lower historical loss rates and a $272.7 million decrease in the average balances of net loans and leases.
“While we anticipate headwinds during the second half of this year due to historically low interest rates and competitive pressures, our core earnings engine remains strong, and our team is committed to meeting these challenges,” CEO Kevin McPhaill said in a news release. “We will continue to look for additional opportunities and we are excited about the future of Bank of the Sierra.”
The bank also reported other significant financial news. Cash and due from banks rose 424% during the first six months of the year, mostly due to higher deposit balances and lower loan balances. Gross loans lso shrank by $318.3 million, mostly because of a $157.3 million decline in mortgage warehouse line utilization, a $100 million decline in real estate loans because of lower commercial real estate balances, and a $59.4 million decrease in commercial and industrial loans, which was caused by Paycheck Protection Program loan forgiveness.