Bank of the Sierra income down, due in part to rising interest rates
Sierra Bancorp’s net income fell to $9.2 million in the second quarter of 2022, from $11.7 million a year earlier, the bank announced July 25.
The parent company of Bank of the Sierra posted net income of 61 cents per diluted share for the quarter ended June 30, compared with 76 cents per diluted share in the same quarter a year earlier.
Sierra Bancorp is headquartered in Porterville and has 10 branches in the tri-county region.
The bank said net interest income decreased $600,000, or 2%, due primarily to a $400,000 increase in interest expense from the issuance of subordinated debt during the third quarter of 2021 and higher cost of funds on interest-bearing liabilities due to interest rate increases.
The bank’s financial performance during the first six months of 2022 include an annualized return on average equity of 10.10%, a return on average assets of 0.98%, and diluted earnings per share of $1.10.
During the first six months of the year, the company reported net income of $16.6 million, compared with $22.8 million for the same period in 2021. Net income decreased by $6.2 million due mostly to a $5 million increase in the provision for credit losses, as well as lower net interest income on a change in mix of average earning assets, partially offset by higher non-interest income.
“In this uncertain time of volatile interest rates and higher inflation, the strength of our loyal customer base provides us with a foundation of core deposits that position us to prudently increase loan production,” CEO Kevin McPhaill said in a news release. “I believe that these fundamentals remain a critical part of our success.”