Sierra Bancorp, the parent company of Bank of the Sierra, reported Oct. 25 that its net income rose slightly in the third quarter, compared to the same quarter a year earlier, while loan volume was down.
The bank is headquartered in Porterville and has nine branches in the tri-county region. It had $10.6 million in net income for the quarter ended Sept. 30, or 69 cents per diluted share, up from $10.4 million in the same quarter of 2020, or 67 cents per diluted share.
The bank said the most significant year-to-year changes were an $8.8 million decrease in the provision for loan and lease losses, and an increase of $6.5 million, or 8%, in net interest income, due mostly to higher average loan balances and a continued favorable deposit mix.
“We are proud of our robust earnings in the third quarter, which helped the bank achieve its strongest net income for a nine-month period in its history,” CEO Kevin McPhaill said in a news release. “Our continued efforts in both core deposit and diversified earning asset generation during 2021 have led to overall balance sheet growth.”
The bank’s gross loans declined $323.3 million, predominantly because of a $181.2 million decrease in mortgage warehouse line utilization, a $63 million decline in real estate loans because of lower commercial real estate and construction loan balances, and a $76.8 million decrease in commercial and industrial loans, which was mostly pandemic-related Paycheck Protection Program loan forgiveness.
The bank’s total assets rose by $222.0 million, or 7%, to $3.4 billion, during the first nine months of 2021. Officials attributed the growth as a result of increases in cash and due from banks and investments securities of $350.9 million and $188.3 million, respectively, net of a $320.6 million decrease in net loan balances.