Sierra Bancorp Reports Year End 2024 Results and Quarterly Earnings

PORTERVILLE, Calif.--(BUSINESS WIRE)-- Sierra Bancorp (Nasdaq: BSRR), parent of Bank of the Sierra, today announced unaudited financial results for the three-and twelve-month periods ended December 31, 2024. Sierra Bancorp reported consolidated net income in the fourth quarter of 2024 of $10.4 million, or $0.72 per diluted share, compared to net income of $6.3 million, or $0.43 per diluted share, in the fourth quarter of 2023, and $10.6 million, or $0.74 per diluted share, in the third quarter of 2024.

Highlights for the fourth quarter of 2024 (unless otherwise stated):

• Strong Quarterly Earnings Metrics
  • Return on average assets improved to 1.13%, as compared to 0.67% for the same period in 2023.
  • Return on average equity increased to 11.49%, as compared to 8.03% for the same period in 2023.
  • Net interest margin rose to 3.65%, as compared to 3.31% for the same period in 2023.
  • Efficiency ratio improved to 59.7% as compared to 67.1% for the same period in 2023.
  • Diluted earnings per share of $0.72 increased 68% compared to $0.43 for the same period in 2023.

• Balance Sheet Growth
  • Loan growth of $11.3 million, or 2% annualized, during the quarter.
  • For the full year 2024, loans grew 12%, or $242.7 million to $2.3 billion.
  • For the full year 2024, total deposits increased $130.4 million, or 5%, to $2.9 billion.
  • Noninterest-bearing deposits of $1.0 billion at December 31, 2024, represent 35% of total deposits.

• Solid Capital and Liquidity
  • Increased Tangible Book Value (non-GAAP) per share, during the quarter, to $23.15 per share.
  • Repurchased 229,850 shares of common stock during the quarter at an average price of $29.38, with an additional 112,896 shares repurchased through January 23, 2025.
  • In January 2025, increased dividend by one cent to $0.25 per share, our 104th consecutive quarterly dividend.
  • Regulatory Community Bank Leverage Ratio increased to 11.80% at December 31, 2024, for our subsidiary Bank.
  • Consolidated Tangible Common Equity Ratio (non-GAAP) increased to 9.18% at December 31, 2024.
  • Overall primary and secondary liquidity sources of $2.3 billion at December 31, 2024.

For the year ended 2024, the Company recognized net income of $40.6 million, or $2.82 per diluted share, as compared to $34.8 million, or $2.36 per diluted share, for the same period in 2023. The Company’s return on average assets and return on average equity for the year ended 2024 was 1.12% and 11.62%, respectively, as compared to 0.94% and 11.30%, respectively, for the same comparative period in 2023.

“Confidence doesn’t come out of nowhere. It’s a result of something…hours and days and weeks and years of constant work and dedication.” – Roger Staubach

“We are proud to announce strong net income growth of over 16% in 2024, accompanied by solid improvements in net interest margin, efficiency ratio, return on average assets, and tangible book value per share!” expressed Kevin McPhaill, CEO and President. “We overcame a number of obstacles, including a challenging interest rate environment, to cap off one of our best years. Loans continued to grow and deposit relationships were strengthened as our bankers worked hard to focus on retaining and attracting customers. We are very excited about 2025 and will continue to find opportunities to improve our bank and provide consistently strong results,” concluded Mr. McPhaill.

Financial Highlights

Quarterly Changes (comparisons to the fourth quarter of 2023)

• Quarterly net income at $10.4 million, a 65% increase, primarily attributable to $2.5 million in higher net interest income, a $1.1 million decrease in the provision for credit losses, and a $1.3 million decline in noninterest expenses.
• The $2.5 million net interest income increase was primarily driven by a 34 basis point increase in net interest margin partially offset by lower earning assets due to a strategic balance sheet restructuring in early 2024. Although average assets were down during 2024, the mix shifted favorably with a $237 million increase in loan balances during 2024 due primarily to mortgage warehouse loan growth. The favorable increase in interest income was enhanced by a $1.8 million decline in overall interest expense in the fourth quarter of compared to the same quarter in 2023, due to the reduction in other borrowings facilitated by the balance sheet restructuring in the fourth quarter of 2023.
• Noninterest income for the fourth quarter of 2024 declined by $0.5 million or 7%. This was primarily due to a net $0.8 million increase from the combination of a nonrecurring fourth quarter 2023 gain on a sale/leaseback on Bank-owned branch buildings, and a realized loss on a securities restructuring strategy.
• Noninterest expense experienced a $1.3 million positive variance in the fourth quarter over the same quarter in 2023. While salary and benefit costs decreased due to a strategic internal reorganization in the fourth quarter of 2023, this favorable variance was offset by an increase in occupancy costs, due to the sale/leaseback of certain branches, also in the fourth quarter of 2023. Improved expenses in nearly every category of noninterest expense were due to operational efficiencies gained from various initiatives implemented in 2024.

Year to-Date Changes (comparisons to the year ended 2023)

• Net income increased $5.7 million, or 16%, to $40.6 million. This robust net income growth was primarily driven by an increase of $7.6 million, or 7% in net interest income, due mostly to an overall increase in interest rates on earning assets partially offset by a $1.1 million increase in the provision for credit losses and higher interest expense. In addition, there were positive variances related to an increase in service charge income, partially offset by a rise in occupancy expenses from the sale/leaseback of branch buildings in late 2023.
• The provision for credit losses was $4.8 million, an increase of $1.1 million, primarily due to an increase in individual reserves, partially offset by a decrease in net charge-offs for the year ending 2024.
• Noninterest income increased by $1.1 million, or 4%. In addition to the net gain from the sale/leaseback mostly offset by a loss on securities sale as described above, service charge income on deposit accounts was $1.1 million higher, due to increases in the following categories: ATM Visa income, analysis fees, and other transaction-based fees.
• Noninterest expense increased 0.2%, or $0.2 million during 2024. The $2.2 million increase in occupancy costs, due to higher rent and property tax payments following the sale/leaseback transaction of Bank owned branch buildings in late 2023, was partially offset by efficiencies elsewhere. Among the expense declines was $0.6 million in salaries and benefits, mostly from an operational reorganization in 2023. Other noninterest expense improved favorably by $1.3 million overall due mostly to lower costs for most categories.

Balance Sheet Changes (comparisons to December 31, 2023)

• Total assets decreased by $115.5 million, or 3%, to $3.6 billion during 2024, due primarily to the strategic restructuring of our lower-yielding bond portfolio in the first quarter of 2024, partially offset by increases in loan balances.
• Gross loans increased $241.3 million, or 12%, due to a $210.4 million increase in mortgage warehouse line utilization, a $32.2 million increase in commercial real estate loans, a $10.1 million increase in farmland loans, and a $20.7 million increase in other commercial loans. This favorable growth was partially offset by a $30.6 million decrease in residential real estate loans, and smaller declines in construction and consumer loans.
• Deposits totaled $2.9 billion at December 31, 2024, representing a year-to-date increase of $130.4 million, or 5%. The growth in deposits came mostly from a $140.0 million increase in brokered deposits to fund growth in mortgage warehouse lines, and a $40.2 million increase in transaction accounts offset by smaller declines in customer non-transaction accounts.
• Other interest-bearing liabilities decreased $278.8 million from a reduction in overnight borrowings facilitated by the strategic balance sheet restructuring in the first quarter of 2024, and a drop in FHLB advances, as we utilized brokered deposits not only to fund mortgage warehouse lines, but to pay down more costly FHLB lines of credit.

Other financial highlights are reflected in the following table.

FINANCIAL HIGHLIGHTS
(Dollars in Thousands, Except per Share Data, Unaudited)
		At or For the												At or For the
		Three Months Ended												Twelve Months Ended
		12/31/2024				9/30/2024				12/31/2023				12/31/2024				12/31/2023
Net income		$	10,364			$	10,603			$	6,290			$	40,560			$	34,844
Diluted earnings per share		$	0.72			$	0.74			$	0.43			$	2.82			$	2.36
Return on average assets			1.13	%			1.14	%			0.67	%			1.12	%			0.94	%
Return on average equity			11.49	%			11.95	%			8.03	%			11.62	%			11.30	%
Net interest margin (tax-equivalent) (1)			3.65	%			3.66	%			3.31	%			3.66	%			3.37	%
Yield on average loans			5.20	%			5.25	%			4.78	%			5.13	%			4.69	%
Yield on investments			5.03	%			5.42	%			5.35	%			5.40	%			5.09	%
Cost of average total deposits			1.46	%			1.62	%			1.24	%			1.50	%			1.09	%
Cost of funds			1.59	%			1.72	%			1.73	%			1.64	%			1.52	%
Efficiency ratio (tax-equivalent) (1)(2)			59.74	%			58.38	%			67.10	%			60.76	%			63.90	%
Total assets		$	3,614,271			$	3,696,154			$	3,729,799			$	3,614,271			$	3,729,799
Loans & leases net of deferred fees		$	2,331,434			$	2,321,025			$	2,090,384			$	2,331,434			$	2,090,384
Noninterest demand deposits		$	1,007,208			$	1,013,743			$	1,020,772			$	1,007,208			$	1,020,772
Total deposits		$	2,891,668			$	2,962,159			$	2,761,223			$	2,891,668			$	2,761,223
Noninterest-bearing deposits over total deposits			34.8	%			34.2	%			37.0	%			34.8	%			37.0	%
Shareholders' equity / total assets			9.89	%			9.70	%			9.06	%			9.89	%			9.06	%
Tangible Common equity ratio (2)			9.18	%			9.01	%			8.36	%			9.18	%			8.36	%
Book value per share		$	25.12			$	24.88			$	22.85			$	25.12			$	22.85
Tangible book value per share (2)		$	23.15			$	22.93			$	20.91			$	23.15			$	20.91
Community bank leverage ratio (subsidiary bank)			11.80	%			11.70	%			11.29	%			11.80	%			11.29	%
Tangible common equity ratio (subsidiary bank) (2)			11.07	%			10.90	%			10.30	%			11.07	%			10.30	%

(1)	Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(2)	See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures."

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income was $30.4 million for the fourth quarter of 2024, a $2.5 million increase, or 9% over the fourth quarter of 2023, and increased $7.6 million, or 7%, to $120.0 million for the year ended 2024, relative to the same period in 2023.

For the fourth quarter of 2024, the yield on earning assets was 16 basis points higher as compared to the same period in 2023, which more than offset the lower average interest-earning assets of $66.6 million. The increase in yield was mostly due to an increase in real estate loan yields, combined with an increase in higher-yielding mortgage warehouse loans overall and as a percentage of loans. Further, there was a favorable 22 basis point decrease in the cost of our interest-bearing liabilities for the same period. The favorable decline in funding costs was due to a significant reduction in short-term borrowings as a result of the strategic balance sheet restructuring in late 2023, and early 2024.

Net interest income for the comparative year-to-date periods increased $7.6 million, or 7%, due to the sale of lower-yielding investments in the first quarter of 2024, as part of the overall strategic balance sheet restructuring. This sale allowed the Company to also reduce higher cost funding. There was a $161.5 million, or 8%, increase in average loan and lease balances with yields 44 basis points higher for the same period, while average investment balances decreased $254.9 million, or 19%, with yields 31 basis points higher for the same period. Average interest-bearing liabilities decreased $86.7 million, or 4%, mostly in borrowed funds. The cost of interest-bearing liabilities was 72 basis points higher for the comparative periods, due to an increase in higher cost brokered deposits used to fund the growth in mortgage warehouse utilization. The favorable net impact of the mix and rate change was a 29 basis point increase in our net interest margin for the year ended December 31, 2024, as compared to the same period in 2023.

Our net interest margin was 3.65% for the fourth quarter of 2024, one basis point lower than the linked quarter, and 34 basis points higher than the fourth quarter of 2023. The yield of interest-earning assets increased 16 basis points for the fourth quarter of 2024, as compared to the same quarter for 2023, and the cost of interest-bearing liabilities decreased 22 basis points compared to the same period in 2023. Favorable shifts in both yields and costs led to an overall 34 basis point increase in net interest margin in the fourth quarter of 2024, compared to the same period in 2023. Compared to the prior linked quarter, the yield on taxable investments declined as a portion of these investments are floating rate and the index rate declined during the quarter. This unfavorable decline in yield on investments was mostly offset by a 23 basis point decline in deposit costs as certificates of deposits rolled into lower rates throughout the quarter.

Credit Loss Expense

The Company recorded a $2.3 million and $4.6 million credit loss expense related to loans in the fourth quarter and year-to-date 2024, as compared to $3.6 million and $4.1 million, respectively, for the same periods in 2023. For the prior linked quarter, the credit loss expense related to loans increased $1.1 million. The impact of net lower charge-offs, along with a favorable improvement in underlying economic forecasts used as part of our allowance for credit losses model, and offset by an unfavorable increase in the allowance for credit losses on loans individually evaluated, accounts for the changes in all periods presented.

Credit loss expense on unfunded commitments was $0.1 million in the fourth quarter of 2024, as compared to a benefit of $0.1 million in the same quarter in 2023. For the full year 2024, the Company recorded $0.2 million in credit loss expense on unfunded commitments compared to a $0.3 million benefit for 2023. The reason for the increase in both the quarterly and year-to-date comparisons is due to an increase in the balance of unfunded commitments combined with an increase in the reserve rate utilized in the calculation of the reserves.

All debt securities in an unrealized loss position were primarily attributable to changes in interest rates and volatility in the financial markets and not a result of an expected credit loss.

Noninterest Income

Total noninterest income reflects a $0.5 million decline, or 7%, for the quarter ended December 31, 2024, as compared to the same quarter in 2023. Such decline is mostly due to a net benefit recorded in the fourth quarter of 2023 related to the combination of the sale/leaseback of Bank owned buildings, mostly offset by a realized loss related to securities for a net favorable benefit recorded of $0.8 million. Having the favorable net gain in 2023, with no similar transaction in 2024, resulted in a $0.8 million decline for the comparable periods. This was partially offset by favorable increases in service charges and other areas of noninterest income. For the full year 2024, noninterest income increased $1.1 million, or 4%, compared to 2023. Similar to the change in fourth quarter noninterest income described above, there was a $0.8 million net favorable difference between sale/leaseback gain net of investment portfolio realized losses in 2023 as compared to a $1.1 million net favorable difference for a second sale/leaseback transaction in early 2024. This resulted in a $0.3 million increase overall year-over-year for these two combined items. This was supplemented by a $1.1 million increase in service charges and a $0.9 million increase in bank-owned life income. These two favorable improvements were partially offset by a $0.8 million decline in other noninterest income items.

The favorable year-to-date change in Bank Owned Life Insurance (BOLI) income is offset by similar increases to the Company’s deferred compensation plan.

Service charge income increases are due mostly to favorable improvements in analysis fee income, greater ATM fees, an increase in overdraft income and higher income related to money-service business customers.

Noninterest Expense

There was a favorable variance of total noninterest expense of $1.3 million, or 5%, in the fourth quarter of 2024, relative to the fourth quarter of 2023. For the full year of 2024, noninterest expense increased by $0.2 million, or 0.2%, for the year ended 2024, as compared to the same period in 2023.

Salaries and Benefits were $0.7 million, or 5%, lower in the fourth quarter of 2024, as compared to the fourth quarter of 2023, and $0.6 million, or 1%, lower for the year ended 2024, compared to the same period in 2023. The Company made strategic decisions in 2023 that created operational efficiencies and reduced noninterest expenses. Full-time equivalent employees decreased by four to 485 full-time equivalent employees at December 31, 2024, as compared to 489 at December 31, 2023.

Occupancy expenses were $0.3 million higher for the fourth quarter of 2024, and $2.2 million higher year-to-date as compared to the same periods in 2023. The reason for the increases in both comparisons was due to increased rent expense from the sale/leaseback transactions in the fourth quarter of 2023 and first quarter of 2024.

Other noninterest expense decreased $0.9 million for the fourth quarter 2024, and $1.3 million for the year ended 2024, as compared to the same periods in 2023. The positive variances for the fourth quarter of 2024, compared to the same period in 2023, were in marketing costs, due to a change in the Company marketing strategy, and in travel and legal expenses. For the year-over-year comparison, the categories of variance were the same as with the quarterly comparison, except for an unfavorable variance in directors’ deferred compensation expense and loan origination software, to better serve our customers and create operational efficiencies in the near term. This was partially offset by favorable variances in debit card processing and ATM network costs, from a branding change to VISA from Mastercard last year, and the subsequent costs in 2023 related to that change.

The Company's provision for income taxes was 17.7% of pre-tax income in the fourth quarter of 2024, relative to 23.8% in the fourth quarter of 2023, and 24.7% of pre-tax income for the year ended December 31, 2024, as compared to 25.0% for the year ended 2023. The decrease in effective tax rate in the fourth quarter was due to an increase in the net benefit from low-income housing tax credit investments.

Balance Sheet Summary

The $115.5 million, or 3%, decrease in total assets during the year ended 2024, was mostly a result of the strategic balance sheet restructuring, mostly offset by loan growth in 2024. Investment securities declined $377.8 million, primarily from the sale of bonds from the strategic securities transaction, as well as other maturities and calls of investment securities. The decreases in investment securities were partially offset by a $241.3 million increase in gross loans, and a $22.1 million increase in cash on hand.

The $241.3 million increase in gross loan balances, as compared to December 31, 2023, was a result of organic growth led by $210.4 million of growth of mortgage warehouse outstandings. The remaining growth came from a $32.2 million increase in commercial real estate loans, a $20.7 million increase in other commercial loans, and a $10.1 million increase in farmland loans, partially offset by a $30.6 million decline in residential real estate loans. Despite the uncertainty in the direction of market interest rates during 2025, the Company plans to expand its customer base in the mortgage warehouse sector to facilitate growth in 2025.

As indicated in the loan roll forward below, new credit extended (excluding mortgage warehouse) for the fourth quarter of 2024 of $79.9 million represented an $18.7 million increase compared to the prior linked quarter, and $53.2 million relative to the same period in 2023. New credit extended (excluding mortgage warehouse) increased $31.1 million in 2024 as compared to 2023. This increase in organic loan growth was attributable to new loan teams hired in recent years that are now gaining momentum.

LOAN ROLLFORWARD
(Dollars in Thousands, Unaudited)
		For the three months ended:												For the twelve months ended:
			December 31, 2024				September 30, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Gross loans beginning balance		$	2,320,629			$	2,234,528			$	2,100,810			$	2,090,075			$	2,052,940
New credit extended			79,934				61,239				26,704				216,452				185,323
Changes in line of credit utilization			(19,664	)			11,572				4,377				(43,432	)			(37,308	)
Change in mortgage warehouse			(9,376	)			61,718				8,415				210,402				50,561
Pay-downs, maturities, charge-offs and amortization			(40,182	)			(48,428	)			(50,231	)			(142,156	)			(161,441	)
Gross loans ending balance		$	2,331,341			$	2,320,629			$	2,090,075			$	2,331,341			$	2,090,075

Unused commitments, excluding mortgage warehouse and overdraft lines, were $256.9 million at December 31, 2024, compared to $203.6 million at December 31, 2023. Total line utilization, excluding mortgage warehouse and overdraft lines, was 57% at December 31, 2024, and 62% at December 31, 2023. Including mortgage warehouse utilization, overall utilization was 51% at December 31, 2024, as compared to 53% at December 31, 2023. Mortgage warehouse utilization increased to 51% at December 31, 2024, as compared to 36% at December 31, 2023. Due to new customer growth, total mortgage warehouse availability increased to $311.6 million at December 31, 2024, as compared to $204.5 million at December 31, 2023. The Bank increased the number of mortgage warehouse customers by 60% in 2024. This has facilitated an increase in outstanding balances in 2024 by $210.4 million, or 181%, to $324.6 million at December 31, 2024.

Deposit balances reflect growth of $130.4 million, or 5%, during the year ended 2024. Core non-maturity deposits increased by $12.0 million, or 1%, while customer time deposits decreased by $21.5 million, or 4%. Wholesale brokered deposits increased by $140.0 million, or 104%. As stated previously, the increase in brokered deposits was primarily to fund increases in mortgage warehouse lines. Overall noninterest-bearing deposits as a percent of total deposits at December 31, 2024, decreased to 34.8%, as compared to 37.0% at December 31, 2023. Other interest-bearing liabilities of $188.9 million on December 31, 2024, consist of $108.9 million in customer repurchase agreements and $80.0 million of term FHLB borrowings, as compared to $107.1 million in customer repurchase agreements, and $205.0 million of term FHLB borrowings on December 31, 2023.

Overall uninsured deposits are estimated to be approximately $815.5 million, or 28% of total deposit balances, excluding public agency deposits that are subject to collateralization through a letter of credit issued by the FHLB. In addition, uninsured deposits of the Bank’s customers are eligible for FDIC pass-through insurance if the customer opens an IntraFi Insured Cash Sweep (ICS) account or a reciprocal time deposit through the Certificate of Deposit Account Registry System (CDARS). IntraFi allows for up to $265 million per customer of pass-through FDIC insurance, which would more than cover each of the Bank’s deposit customers if such customer desired to have such pass-through insurance. The Bank maintains a diversified deposit base with no significant customer concentrations and does not bank any cryptocurrency companies. At December 31, 2024, the Company had approximately 119,000 accounts, and the 25 largest deposit balance customers had balances of approximately 10% of overall deposits. During the fourth quarter of 2024, except for seasonality fluctuations in the normal course of business, there has been no material change in the composition of our 25 largest deposit balance customers.

The Company continues to have substantial liquidity. At December 31, 2024, and December 31, 2023, the Company had the following sources of primary and secondary liquidity (dollars in thousands, unaudited):

Primary and Secondary Liquidity Sources			December 31, 2024			December 31, 2023
Cash and cash equivalents		$	100,664		$	78,602
Unpledged investment securities			552,098			792,965
Excess pledged securities			242,519			382,965
FHLB borrowing availability			629,134			586,726
Unsecured lines of credit			504,785			374,785
Funds available through fed discount window			298,296			392,034
Totals		$	2,327,496		$	2,608,077

Total capital of $357.3 million at December 31, 2024, reflects an increase of $19.2 million, or 6%, relative to year-end 2023. The increase in equity during the year ended December 31, 2024, was primarily due $40.6 million in net income and a $4.7 million favorable swing in accumulated other comprehensive income (loss) partially offset by $13.6 million in dividends paid, and $15.0 million in share repurchases. The remaining difference was related to stock options exercised and restricted stock activity during the year.

Asset Quality

Total nonperforming assets, comprised of nonaccrual loans, increased by $11.7 million to $19.7 million for the year ended December 31, 2024. The Company's ratio of nonperforming loans to gross loans increased to 0.84% at December 31, 2024, from 0.38% at December 31, 2023. This unfavorable change in asset quality resulted from an increase in non-accrual loan balances, primarily as a result of one agricultural loan relationship. All the Company's nonperforming assets are individually evaluated for credit loss quarterly and management believes the established allowance for credit loss on such loans was appropriate. The nonaccrual loans at December 31, 2024, are mostly due to an operating line of credit collateralized with receivables from wine grape production and other assets with a balance of $16.3 million at December 31, 2024, and a current balance of $14.1 million, due to principal paydowns made by the customer during the month of January 2025.

The Company's allowance for credit losses on loans was $24.8 million at December 31, 2024, as compared to a balance of $23.5 million at December 31, 2023. The allowance was 1.07% of total loans at December 31, 2024, and 1.12% of total loans at December 31, 2023. The Company experienced fewer net charge offs during the year, offset by a specific allowance on a single agricultural credit relationship.

Management's detailed analysis indicates that the Company's allowance for credit losses on loans should be sufficient to cover credit losses inherent in loan portfolio balances outstanding as of December 31, 2024, but no assurance can be given that the Company will not experience substantial future losses relative to the size of the credit loss allowance on loans. Based upon the Company’s preliminary analysis we have identified approximately five residential real estate secured loans in the Los Angeles wildfire area and are unaware of any property damage at the date of this release. The total allowance for credit losses on loans of $24.8 million at December 31, 2024, included $0.4 million of allowance related to $326.4 million of mortgage warehouse lines.

About Sierra Bancorp

Sierra Bancorp is the holding Company for Bank of the Sierra (www.bankofthesierra.com), which is in its 48^th year of operations and is the largest independent bank headquartered in the South San Joaquin Valley. Bank of the Sierra is a community-centric regional bank, which offers a broad range of retail and commercial banking services through full-service branches located within the counties of Tulare, Kern, Kings, Fresno, Ventura, San Luis Obispo, and Santa Barbara. The Bank also maintains an online branch and provides specialized lending services through an agricultural credit center in Templeton, California. In 2024, Bank of the Sierra was recognized as one of the strongest and top-performing community banks in the country, with a 5-star rating from Bauer Financial.

Forward-Looking Statements

The statements contained in this release that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Readers are cautioned not to unduly rely on forward looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to the health of the national and local economies, loan portfolio performance, the Company's ability to attract and retain skilled employees, customers' service expectations, the Company's ability to successfully deploy new technology, the success of acquisitions and branch expansion, changes in interest rates, and other factors detailed in the Company's SEC filings, including the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Form 10‑K and Form 10‑Q.

STATEMENT OF CONDITION
(Dollars in Thousands, Unaudited)
ASSETS			12/31/2024				9/30/2024				6/30/2024				3/31/2024				12/31/2023
Cash and due from banks		$	100,664			$	132,797			$	183,990			$	119,244			$	78,602
Investment securities
Available-for-sale, at fair value			655,967				706,310				716,787				741,789				1,019,201
Held-to-maturity, at amortized cost, net of allowance for credit losses			305,514				308,971				312,879				316,406				320,057
Total investment securities			961,481				1,015,281				1,029,666				1,058,195				1,339,258
Real estate loans
Residential real estate			381,438				388,169				396,819				406,443				412,063
Commercial real estate			1,360,374				1,338,793				1,316,754				1,327,482				1,328,224
Other construction/land			5,458				5,612				5,971				6,115				6,256
Farmland			77,388				80,589				80,807				66,133				67,276
Total real estate loans			1,824,658				1,813,163				1,800,351				1,806,173				1,813,819
Other commercial			177,013				168,236				156,650				143,448				156,272
Mortgage warehouse lines			326,400				335,777				274,059				203,561				116,000
Consumer loans			3,270				3,453				3,468				3,682				3,984
Gross loans			2,331,341				2,320,629				2,234,528				2,156,864				2,090,075
Deferred loan fees			93				396				288				214				309
Allowance for credit losses on loans			(24,830	)			(22,710	)			(21,640	)			(23,140	)			(23,500	)
Net loans			2,306,604				2,298,315				2,213,176				2,133,938				2,066,884
Bank premises & equipment			15,431				15,647				16,007				16,067				16,907
Other assets			230,091				234,114				238,363				225,628				228,148
Total assets		$	3,614,271			$	3,696,154			$	3,681,202			$	3,553,072			$	3,729,799
LIABILITIES & CAPITAL
Noninterest demand deposits		$	1,007,208			$	1,013,743			$	986,927			$	968,996			$	1,020,772
Interest-bearing transaction accounts			587,753				595,672				537,731				532,791				533,947
Savings deposits			347,387				356,725				368,169				378,057				370,806
Money market deposits			140,793				135,948				136,853				134,533				145,591
Customer time deposits			533,577				550,121				566,132				560,979				555,107
Wholesale brokered deposits			274,950				309,950				346,598				271,648				135,000
Total deposits			2,891,668				2,962,159				2,942,410				2,847,004				2,761,223
Long-term debt			49,393				49,371				49,348				49,326				49,304
Junior subordinated debentures			35,838				35,794				35,749				35,704				35,660
Other interest-bearing liabilities			188,860				205,534				228,003				201,851				467,621
Total deposits & interest-bearing liabilities			3,165,759				3,252,858				3,255,510				3,133,885				3,313,808
Allowance for credit losses on unfunded loan commitments			710				640				520				540				510
Other liabilities			90,500				83,958				75,152				73,553				77,384
Total capital			357,302				358,698				350,020				345,094				338,097
Total liabilities & capital		$	3,614,271			$	3,696,154			$	3,681,202			$	3,553,072			$	3,729,799

GOODWILL & INTANGIBLE ASSETS
(Dollars in Thousands, Unaudited)
			12/31/2024				9/30/2024				6/30/2024				3/31/2024				12/31/2023
Goodwill		$	27,357			$	27,357			$	27,357			$	27,357			$	27,357
Core deposit intangible			618				780				961				1,180				1,399
Total intangible assets		$	27,975			$	28,137			$	28,318			$	28,537			$	28,756
CREDIT QUALITY
(Dollars in Thousands, Unaudited)
			12/31/2024				9/30/2024				6/30/2024				3/31/2024				12/31/2023
Non-accruing loans		$	19,668			$	10,348			$	6,473			$	14,188			$	7,985
Foreclosed assets			-				-				-				-				-
Total nonperforming assets		$	19,668			$	10,348			$	6,473			$	14,188			$	7,985
Quarterly net charge offs		$	215			$	170			$	2,421			$	457			$	3,175
Past due & still accruing (30-89)		$	1,348			$	211			$	3,172			$	1,563			$	255
Classified loans		$	44,464			$	29,148			$	28,829			$	34,100			$	35,577
Non-performing loans to gross loans			0.84	%			0.45	%			0.29	%			0.66	%			0.38	%
NPA's to loans plus foreclosed assets			0.84	%			0.45	%			0.29	%			0.66	%			0.38	%
Allowance for credit losses on loans to gross loans			1.07	%			0.98	%			0.97	%			1.07	%			1.12	%
SELECT PERIOD-END STATISTICS
(Unaudited)
			12/31/2024				9/30/2024				6/30/2024				3/31/2024				12/31/2023
Shareholders equity / total assets			9.89	%			9.70	%			9.51	%			9.71	%			9.06	%
Gross loans / deposits			80.62	%			78.34	%			75.94	%			75.76	%			75.69	%
Noninterest-bearing deposits / total deposits			34.83	%			34.22	%			33.54	%			34.04	%			36.97	%
Core non-maturity deposits			2,083,141				2,102,088				2,029,680				2,014,377				2,071,116

CONSOLIDATED INCOME STATEMENT
(Dollars in Thousands, Unaudited)			For the three months ended:												For the year ended:
			12/31/2024				9/30/2024				12/31/2023				12/31/2024				12/31/2023
Interest income		$	43,095			$	44,798			$	42,443			$	172,348			$	163,121
Interest expense			12,742				14,008				14,573				52,319				50,716
Net interest income			30,353				30,790				27,870				120,029				112,405
Credit loss (benefit) expense - loans			2,335				1,240				3,615				4,593				4,058
Credit loss expense (benefit) - unfunded commitments			70				120				(90	)			200				(330	)
Credit loss benefit - debt securities held-to-maturity			-				(1	)			-				(1	)			(47	)
Net interest income after credit loss expense			27,948				29,431				24,345				115,237				108,724
Service charges and fees on deposit accounts			6,059				6,205				5,977				24,173				23,103
Gain (loss) on sale of investments			129				73				-				(2,681	)			396
(Loss) gain on sale of fixed assets			(16	)			-				15,255				3,783				15,270
BOLI income			372				540				379				2,650				1,767
Realized (loss) gain on available for sale securities			-				-				(14,500	)			66				(14,500	)
Other noninterest income			968				971				934				3,530				4,364
Total noninterest income			7,512				7,789				8,045				31,521				30,400
Salaries & benefits			12,749				12,363				13,410				50,338				50,977
Occupancy expense			3,201				2,995				2,909				12,374				10,160
Other noninterest expenses			6,912				7,452				7,817				30,178				31,523
Total noninterest expense			22,862				22,810				24,136				92,890				92,660
Income before taxes			12,598				14,410				8,254				53,868				46,464
Provision for income taxes			2,234				3,807				1,964				13,308				11,620
Net income		$	10,364			$	10,603			$	6,290			$	40,560			$	34,844
TAX DATA
Tax-exempt municipal income		$	1,579			$	1,584			$	2,675			$	6,743			$	10,909
Interest income - fully tax equivalent		$	43,515			$	45,219			$	43,154			$	174,140			$	166,021

PER SHARE DATA
(Unaudited)			For the three months ended:												For the year ended:
			12/31/2024				9/30/2024				12/31/2023				12/31/2024				12/31/2023
Basic earnings per share		$	0.73			$	0.75			$	0.43			$	2.84			$	2.37
Diluted earnings per share		$	0.72			$	0.74			$	0.43			$	2.82			$	2.36
Common dividends		$	0.24			$	0.24			$	0.23			$	0.94			$	0.92
Weighted average shares outstanding			14,169,467				14,188,051				14,539,701				14,284,401				14,706,141
Weighted average diluted shares			14,299,618				14,335,706				14,588,027				14,396,021				14,737,870
Book value per basic share (EOP)		$	25.12			$	24.88			$	22.85			$	25.12			$	22.85
Tangible book value per share (EOP)		$	23.15			$	22.93			$	20.91			$	23.15			$	20.91
Common shares outstanding (EOP)			14,226,512				14,414,561				14,793,832				14,226,512				14,793,832
KEY FINANCIAL RATIOS
(Unaudited)			For the three months ended:												For the year ended:
			12/31/2024				9/30/2024				12/31/2023				12/31/2024				12/31/2023
Return on average equity			11.49	%			11.95	%			8.03	%			11.62	%			11.30	%
Return on average assets			1.13	%			1.14	%			0.67	%			1.12	%			0.94	%
Net interest margin (tax-equivalent) (1)			3.65	%			3.66	%			3.31	%			3.66	%			3.37	%
Efficiency ratio (tax-equivalent) (1)(2)			59.74	%			58.38	%			67.10	%			60.76	%			63.90	%
Net charge-offs to avg loans (not annualized)			0.01	%			0.01	%			0.15	%			0.15	%			0.18	%

(1)	Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(2)	See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures."

NON-GAAP FINANCIAL MEASURES
(Unaudited)
			12/31/2024				9/30/2024				12/31/2023
Total stockholders' equity		$	357,302			$	358,698			$	338,097
Less: goodwill and other intangible assets			27,975				28,137				28,756
Tangible common equity		$	329,327			$	330,561			$	309,341
Total assets		$	3,614,271			$	3,696,154			$	3,729,799
Less: goodwill and other intangible assets			27,975				28,137				28,756
Tangible assets		$	3,586,296			$	3,668,017			$	3,701,043
Total stockholders' equity (bank only)		$	424,363			$	427,762			$	409,862
Less: goodwill and other intangible assets (bank only)			27,975				28,137				28,756
Tangible common equity (bank only)		$	396,388			$	399,625			$	381,106
Total assets (bank only)		$	3,607,133			$	3,693,553			$	3,727,280
Less: goodwill and other intangible assets (bank only)			27,975				28,137				28,756
Tangible assets (bank only)		$	3,579,158			$	3,665,416			$	3,698,524
Common shares outstanding			14,226,512				14,414,561				14,793,832
Book value per common share		$	25.12			$	24.88			$	22.85
Tangible book value per common share		$	23.15			$	22.93			$	20.91
Equity ratio - GAAP (total stockholders' equity / total assets)			9.89	%			9.70	%			9.06	%
Tangible common equity ratio (tangible common equity / tangible assets)			9.18	%			9.01	%			8.36	%
Tangible common equity ratio (bank only) (tangible common equity / tangible assets)			11.07	%			10.90	%			10.30	%

		For the three months ended:													For the year ended:
Efficiency Ratio:			12/31/2024				9/30/2024				12/31/2023				12/31/2024				12/31/2023
Noninterest expense		$	22,862			$	22,810			$	24,136			$	92,890			$	92,660
Divided by:
Net interest income			30,353				30,790				27,870				120,029				112,405
Tax-equivalent interest income adjustments			420				421				711				1,792				2,900
Net interest income, adjusted			30,773				31,211				28,581				121,821				115,305
Noninterest income			7,512				7,789				8,045				31,521				30,400
Less gain (loss) on sale of securities			129				73				-				(2,681	)			396
Less (loss) gain on sale of fixed assets			(16	)			-				15,255				3,783				15,270
Less realized (loss) gain on available-for-sale securities			-								(14,500	)			66				(14,500	)
Tax-equivalent noninterest income adjustments			99				144				101				704				470
Noninterest income, adjusted			7,498				7,860				7,391				31,057				29,704
Net interest income plus noninterest income, adjusted		$	38,271			$	39,071			$	35,972			$	152,879			$	145,009
Efficiency Ratio (tax-equivalent)			59.74	%			58.38	%			67.10	%			60.76	%			63.90	%

NONINTEREST INCOME/EXPENSE
(Dollars in Thousands, Unaudited)
			For three months ended:												For twelve months ended:
Noninterest income:			12/31/2024				9/30/2024				12/31/2023				12/31/2024			12/31/2023
Service charges on deposit accounts		$	6,059				6,205				5,977			$	24,173				23,103
Gain (loss) on sale of securities			129				73				—				(2,681	)			396
(Loss) gain on sale of fixed assets			(16	)			—				15,255				3,783				15,270
Bank-owned life insurance			372				540				379				2,650				1,767
Realized (loss) gain on available for sale securities			—				—				(14,500	)			66				(14,500	)
Other			968				971				934				3,530				4,364
Total noninterest income		$	7,512			$	7,789			$	8,045			$	31,521			$	30,400
As a % of average interest earning assets (1)			0.89	%			0.91	%			0.93	%			0.95	%			0.89	%
Noninterest expense:
Salaries and employee benefits		$	12,749			$	12,363			$	13,410			$	50,338			$	50,977
Occupancy costs			3,201				2,995				2,909				12,374				10,160
Advertising and marketing costs			361				381				569				1,422				2,215
Data processing costs			1,458				1,555				1,397				6,202				5,831
Deposit services costs			2,115				2,150				2,207				8,417				8,775
Loan services costs
Loan processing			104				184				144				529				597
Foreclosed assets			—				—				—				—				665
Other operating costs			836				959				1,118				3,816				4,362
Professional services costs
Legal & accounting			266				547				615				2,243				2,238
Director's costs			572				501				504				2,973				2,237
Other professional service			719				775				708				2,883				2,760
Stationery & supply costs			100				120				117				483				531
Sundry & tellers			381				280				438				1,210				1,312
Total noninterest expense		$	22,862			$	22,810			$	24,136			$	92,890			$	92,660
As a % of average interest earning assets (1)			2.71	%			2.68	%			2.80	%			2.79	%			2.71	%
Efficiency ratio (2)(3)			59.74	%			58.38	%			67.10	%			60.76	%			63.90	%

(1)	Annualized.
(2)	Computed on a tax equivalent basis utilizing a federal income tax rate of 21%.
(3)	See reconciliation of non-GAAP financial measures to the corresponding GAAP measurement in "Non-GAAP Financial Measures.”

AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)		For the quarter ended									For the quarter ended									For the quarter ended
		December 31, 2024									September 30, 2024									December 31, 2023
		Average Balance (1)			Income/ Expense			Yield/ Rate (2)			Average Balance (1)			Income/ Expense			Yield/ Rate (2)			Average Balance (1)			Income/ Expense			Yield/ Rate (2)
Assets
Investments:
Interest-earning due from banks		$	49,680		$	594		4.74	%		$	88,509		$	1,225		5.51	%		$	13,661		$	193		5.61	%
Taxable			791,332			10,600		5.31	%			830,054			11,991		5.75	%			994,814			14,520		5.79	%
Non-taxable			198,600			1,579		3.99	%			199,261			1,584		4.00	%			334,836			2,675		4.01	%
Total investments			1,039,612			12,773		5.03	%			1,117,824			14,800		5.42	%			1,343,311			17,388		5.35	%
Loans: (3)
Real estate			1,811,939			21,413		4.69	%			1,804,099			21,054		4.64	%			1,835,890			20,683		4.47	%
Agricultural Production			82,347			1,326		6.39	%			81,501			1,520		7.42	%			49,052			859		6.95	%
Commercial			85,779			1,244		5.75	%			76,633			1,101		5.72	%			97,962			1,533		6.21	%
Consumer			3,402			89		10.38	%			3,558			78		8.72	%			4,218			85		7.99	%
Mortgage warehouse lines			328,838			6,227		7.51	%			303,463			6,227		8.16	%			88,316			1,878		8.44	%
Other			2,595			22		3.36	%			2,438			18		2.94	%			2,331			17		2.89	%
Total loans			2,314,900			30,321		5.20	%			2,271,692			29,998		5.25	%			2,077,769			25,055		4.78	%
Total interest earning assets (4)			3,354,512			43,094		5.16	%			3,389,516			44,798		5.31	%			3,421,080			42,443		5.00	%
Other earning assets			44,910									17,062									25,738
Non-earning assets			258,710									288,975									267,451
Total assets		$	3,658,132								$	3,695,553								$	3,714,269
Liabilities and shareholders' equity
Interest bearing deposits:
Demand deposits		$	202,940		$	1,348		2.64	%		$	169,602		$	1,170		2.74	%		$	137,827		$	698		2.01	%
NOW			382,649			118		0.12	%			393,328			161		0.16	%			406,970			74		0.07	%
Savings accounts			353,807			90		0.10	%			359,921			93		0.10	%			386,275			73		0.07	%
Money market			144,812			643		1.76	%			132,804			542		1.62	%			144,296			419		1.15	%
Time Deposits			538,441			4,979		3.68	%			562,251			6,010		4.25	%			551,287			6,172		4.44	%
Wholesale Brokered Deposits			289,678			3,520		4.82	%			327,141			4,004		4.87	%			150,326			1,407		3.71	%
Total interest bearing deposits			1,912,327			10,698		2.22	%			1,945,047			11,980		2.45	%			1,776,981			8,843		1.97	%
Borrowed funds:
Federal funds purchased			165			2		4.81	%			168			2		4.74	%			133,339			1,840		5.47	%
Repurchase agreements			118,327			45		0.15	%			133,280			60		0.18	%			95,005			46		0.19	%
Short term borrowings			7,238			72		3.95	%			1			0		0.00	%			133,098			1,861		5.55	%
Long term FHLB Advances			80,000			786		3.90	%			80,000			786		3.91	%			80,000			788		3.91	%
Long term debt			49,380			430		3.45	%			49,357			429		3.46	%			49,290			429		3.45	%
Subordinated debentures			35,812			708		7.84	%			35,767			751		8.35	%			35,632			766		8.53	%
Total borrowed funds			290,922			2,043		2.79	%			298,573			2,028		2.70	%			526,364			5,730		4.32	%
Total interest bearing liabilities			2,203,249			12,741		2.29	%			2,243,620			14,008		2.48	%			2,303,345			14,573		2.51	%
Demand deposits - Noninterest bearing			993,827									995,326									1,041,989
Other liabilities			102,296									103,571									58,255
Shareholders' equity			358,760									353,036									310,680
Total liabilities and shareholders' equity		$	3,658,132								$	3,695,553								$	3,714,269
Interest income/interest earning assets								5.16	%								5.31	%								5.00	%
Interest expense/interest earning assets								1.51	%								1.65	%								1.69	%
Net interest income and margin (5)					$	30,353		3.65	%					$	30,790		3.66	%					$	27,870		3.31	%

(1)	Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.
(2)	Yields and net interest margin have been computed on a tax equivalent basis utilizing a 21% effective tax rate.
(3)	Loans are gross of the allowance for possible credit losses. Loan fees have been included in the calculation of interest income. Net loan fees and loan acquisition FMV amortization were $(0.4) million and $(0.3) million for the quarters ended December 31, 2024 and 2023, respectively, and $(0.4) million for the quarter ended September 30, 2024.
(4)	Non-accrual loans have been included in total loans for purposes of computing total earning assets.
(5)	Net interest margin represents net interest income as a percentage of average interest-earning assets.

AVERAGE BALANCES AND RATES
(Dollars in Thousands, Unaudited)
		For the twelve months ended										For the twelve months ended
		December 31, 2024										December 31, 2023
		Average Balance (1)			Income/ Expense			Yield/ Rate (2)			Average Balance (1)			Income/ Expense			Yield/ Rate (2)
Assets
Investments:
Interest-earning due from banks		$	49,754		$	2,659		5.33	%		$	19,527		$	1,054		5.40	%
Taxable			845,018			48,682		5.75	%			992,187			54,367		5.48	%
Non-taxable			210,636			6,743		4.05	%			348,551			10,909		3.96	%
Total investments			1,105,408			58,084		5.40	%			1,360,265			66,330		5.09	%
Loans:(3)
Real estate		$	1,806,114		$	83,120		4.60	%		$	1,854,300		$	82,174		4.43	%
Agricultural			75,309			5,390		7.16	%			35,724			2,438		6.82	%
Commercial			79,719			4,702		5.90	%			85,572			5,096		5.96	%
Consumer			3,654			326		8.92	%			4,249			348		8.19	%
Mortgage warehouse lines			258,191			20,658		8.00	%			81,675			6,658		8.15	%
Other			2,415			68		2.82	%			2,415			77		3.19	%
Total loans			2,225,402			114,264		5.13	%			2,063,935			96,791		4.69	%
Total interest earning assets (4)			3,330,810			172,348		5.23	%			3,424,200			163,121		4.85	%
Other earning assets			17,131									16,850
Non-earning assets			283,111									272,930
Total assets		$	3,631,052								$	3,713,980
Liabilities and shareholders' equity
Interest bearing deposits:
Demand deposits		$	160,644		$	3,950		2.46	%		$	143,428		$	1,429		1.00	%
NOW			393,126			512		0.13	%			442,819			289		0.07	%
Savings accounts			365,459			336		0.09	%			419,834			269		0.06	%
Money market			138,703			2,071		1.49	%			132,748			710		0.53	%
Time deposits			556,506			23,229		4.17	%			527,965			23,214		4.40	%
Brokered deposits			282,618			13,257		4.69	%			163,382			5,643		3.45	%
Total interest bearing deposits			1,897,056			43,355		2.29	%			1,830,176			31,554		1.72	%
Borrowed funds:
Federal funds purchased			3,840			211		6.56	%			94,815			4,975		5.25	%
Repurchase agreements			123,878			685		0.17	%			90,294			245		0.27	%
Short term borrowings			12,535			3,126		5.46	%			130,622			7,059		5.40	%
Long term FHLB Advances			80,000			1,721		3.91	%			58,411			2,282		3.91	%
Long term debt			49,346			2,969		3.49	%			49,257			1,715		3.48	%
Subordinated debentures			35,745			8,964		8.31	%			35,567			2,886		8.11	%
Total borrowed funds			305,344			17,676		2.94	%			458,966			19,162		4.18	%
Total interest bearing liabilities			2,202,400			61,031		2.38	%			2,289,142			50,716		2.22	%
Demand deposits - noninterest bearing			989,561									1,057,041
Other liabilities			90,142									59,317
Shareholders' equity			348,949									308,480
Total liabilities and shareholders' equity		$	3,631,052								$	3,713,980
Interest income/interest earning assets								5.23	%								4.85	%
Interest expense/interest earning assets								1.57	%								1.48	%
Net interest income and margin(5)					$	120,029		3.66	%					$	112,405		3.37	%

(1)	Average balances are obtained from the best available daily or monthly data and are net of deferred fees and related direct costs.
(2)	Yields and net interest margin have been computed on a tax equivalent basis.
(3)	Loans are gross of the allowance for possible credit losses. Net loan fees have been included in the calculation of interest income. Net loan fees and loan acquisition FMV amortization were $(1.4) million and $(1.0) million for the years ended December 31, 2024 and 2022, respectively.
(4)	Non-accrual loans are slotted by loan type and have been included in total loans for purposes of total interest earning assets.
(5)	Net interest margin represents net interest income as a percentage of average interest-earning assets (tax-equivalent).

Category: Financial
Source: Sierra Bancorp

View source version on businesswire.com: https://www.businesswire.com/news/home/20250127852022/en/

Kevin McPhaill, President/CEO

(559) 782‑4900 or (888) 454‑BANK

www.sierrabancorp.com

Source: Sierra Bancorp