SYS-CON MEDIA Authors: Ian Khan, Liz McMillan, AppDynamics Blog, Harry Trott, Blue Box Blog

News Feed Item

Sierra Bancorp Reports Earnings

PORTERVILLE, Calif., April 25, 2014 /PRNewswire/ -- Sierra Bancorp (Nasdaq: BSRR), parent of Bank of the Sierra, today announced its unaudited financial results for the quarter ended March 31, 2014.  Sierra Bancorp recognized net income of $3.799 million for the first quarter of 2014, an improvement of $1.465 million, or 63%, relative to net income in the first quarter of 2013.  The increase is largely the result of a lower loan loss provision and recoveries on the sale of foreclosed assets.  Net interest income also improved.  These favorable variances were partially offset by a drop in non-interest income.  The Company's return on average assets was 1.09% in the first quarter of 2014, up from 0.68% in the first quarter of 2013.  Return on average equity also increased to 8.36% in the first quarter of 2014 from 5.42% in the first quarter of 2013, and diluted earnings per share increased to $0.26 from $0.16 for the same comparative periods.

Total assets were up $48 million, or 3%, in the first three months of 2014, due to net growth of $35 million in gross loan balances and a $20 million increase in investment securities.  Loan volume was favorably impacted by the purchase of $33 million in residential mortgage loans.  Total nonperforming assets, including nonperforming loans and foreclosed assets, were reduced by over $2 million, or 5%, during the quarter.  Total deposits increased $46 million, or 4%, in the first quarter, as a result of relatively strong growth in core non-maturity deposits.

"Asset quality and credit costs continue to trend in the right direction, and we're pleased with the impetus provided by Company's financial performance in the recently-concluded period.  A key focus in 2014 is asset growth, and the loan volume we generated in the first quarter further enhances our prospects for the year," commented James C. Holly, Chief Executive Officer.  "Additional strategic initiatives launched in the first quarter include the phase-in of the Bank's senior management succession plan, the replacement of our core banking solution, the enhancement of customer-facing technology, and our corporate rebranding," he noted further.  "The technology upgrade was not without a few hitches that inconvenienced some of our valued customers, and we're sincerely grateful for their patience as we worked diligently to resolve any unintended effects associated with the changeover," Holly explained.  "Our logo change has also inspired varied reactions.  We respect the attachment shown by some long-time customers to our 'retired' logo, and hope that they will come to appreciate the new stylized mountain logo which is symbolic of a new era of advancement and progress at the Bank," he concluded.

Financial Highlights

Net income increased by $1.465 million, or 63%, for the first quarter of 2014 relative to the first quarter of 2013.  The single largest factor impacting the increase in net income was the Company's loan loss provision, which was reduced by $1.450 million, or 91%, in the first quarter of 2014 relative to the first quarter of 2013.  The reduction was enabled by a lower level of net loan charge-offs and continued improvement in asset quality.

Net interest income increased by $368,000, or 3%, for the comparative quarters, as a result of a slightly higher net interest margin and an increase in average interest-earning assets.  Average interest-earning assets were up $34 million, although all of the growth was in lower-yielding investments and interest-earning balances in our Federal Reserve Bank account; average loan balances were down $25 million.  Our net interest margin increased by 3 basis points in the first quarter of 2014.  Intense competition for quality loans continues to  push loan yields down, but lower loan yields were mitigated by a higher yield on our investment portfolio, a slight drop in deposit rates, and a shift in average deposit balances from higher cost time deposits into lower-cost non-maturity deposits. 

Total non-interest income fell by $403,000, or 10%, for the quarterly comparison.  The largest component of non-interest income, service charges on deposit accounts, declined by $186,000, or 9%, due in part to the non-recurring impact of certain charges that were waived in the course of our core software conversion.  Bank-owned life insurance (BOLI) income fell $221,000, or 44%, due primarily to a drop in income on BOLI associated with deferred compensation plans.  Gains on the sale of investment securities increased, as we realized $104,000 in gains on the sale of a few municipal bonds in the first quarter of 2014 relative to investment gains of only $6,000 in the first quarter of 2013.  Other non-interest income was down $94,000, or 6%, due to a $100,000 non-recurring signing incentive received in conjunction with our conversion of merchant processing to a new vendor in the first quarter of 2013.

Total non-interest expense fell by $1.090 million, or 9%, for the comparative quarters.  The largest component of non-interest expense, salaries and benefits, increased by $65,000, or 1%.  Regular annual salary increases and a non-recurring increase in overtime costs related to our core conversion were largely offset by a higher level of deferred salaries directly related to successful loan originations, and a $114,000 decline in deferred compensation plan expense accruals related to the aforementioned drop in BOLI income.  Occupancy expense experienced a modest decline in the first quarter of 2014, due mainly to lower depreciation expense on furniture and equipment.  Occupancy expense is expected to increase in future quarters, however, as depreciation and amortization related to our network upgrade and rebranding project become fully reflected in the Company's results of operations.  Other non-interest expenses were reduced by $1.109 million, or 26%, for the first quarter comparison.  The reduction was driven by a drop of $1.272 million in net costs associated with foreclosed assets, due primarily to a non-recurring net gain of $723,000 on the sale foreclosed assets in the first quarter of 2014 relative to a net loss of $487,000 on the sale of foreclosed assets in the first quarter of 2013.

The Company's provision for income taxes was 25% of pre-tax income in the first quarter of 2014, relative to 8% in the first quarter of 2013.  The higher tax provisioning rate in 2014 is primarily the result of an increase in taxable income relative to the Company's available tax credits.  Taxable income excludes income associated with bank-owned life insurance and municipal investments.  Tax credits arise from our investments in low-income housing tax credit funds, as well as certain hiring tax credits.

Balance sheet changes during the quarter ended March 31, 2014 include an increase in total assets of $48 million, or 3%, due to growth in loans and investments.  Gross loans increased by $35 million, or 4%, due in large part to the purchase of $33 million in residential mortgage loans.  Reclassifications made in the course of our core conversion contributed to the increase in real estate loans and the drop in commercial loans.  We experienced an additional reduction of $5 million, or 7%, in balances outstanding on mortgage warehouse lines.  Investment balances were up $20 million, or 5%, due to the purchase of mortgage-backed securities as we deployed excess liquidity.

Total nonperforming assets, including non-accrual loans and foreclosed assets, reflect a reduction of $2 million, or 5%, during the first quarter of 2014.  The Company's ratio of nonperforming assets to loans plus foreclosed assets was 5.14% at March 31, 2014, compared to 5.62% at December 31, 2013.  All of the Company's impaired assets are periodically reviewed, and are either well-reserved based on current loss expectations or are carried at the fair value of the underlying collateral, net of expected disposition costs.  In addition to nonperforming assets, the Company had $15 million in loans classified as restructured troubled debt (TDRs) that were included with performing loans as of March 31, 2014, virtually unchanged relative to TDRs at December 31, 2013.

The Company's allowance for loan and lease losses was $11.5 million as of March 31, 2014, down slightly from the balance at December 31, 2013.  Net loans charged off against the allowance totaled only $336,000 in the first quarter of 2014 compared to $2.274 million in the first quarter of 2013.  The overall allowance declined slightly as a percentage of total loans, to 1.37% at March 31, 2014 from 1.45% at December 31, 2013.  Management's detailed analysis indicates that the Company's allowance for loan and lease losses should be sufficient to cover credit losses inherent in loan and lease balances outstanding as of March 31, 2014, but no assurance can be given that the Company will not experience substantial future losses relative to the size of the allowance.

Deposits reflect growth of $46 million, or 4%, during the three months ended March 31, 2014.  Core non-maturity deposits were up $56 million, or 7%, although much of the increase appears to be seasonal.  There were also significant changes in the composition of deposits, due in part to the transition of approximately $40 million in non-interest bearing demand deposits into interest-bearing transaction accounts during the course of our core conversion.  Growth in non-maturity deposits was partially offset by the maturity of a $5 million brokered time deposit and the runoff of $5 million in customer time deposits.

Total capital increased by $2.5 million, or 1%, to $184 million at March 31, 2014.  The increase resulted primarily from an increase in retained earnings, net of the impact of the Company's repurchase of 78,640 shares in the first quarter 2014.  At March 31, 2014, we had 621,360 shares remaining for repurchase out of the 700,000 shares authorized under the current program.  Risk-based capital ratios, while still robust, dropped slightly during the first quarter due to an increase in risk-adjusted assets.

About Sierra Bancorp

Sierra Bancorp is the holding company for Bank of the Sierra (www.bankofthesierra.com), which is in its 37th year of operations and is the largest independent bank headquartered in the South San Joaquin Valley.  The Company has over 400 employees and conducts business through 25 branch offices, an online branch, a real estate industries center, an agricultural credit center, and an SBA center.

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 California economies, 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 branch expansion, changes in interest rates, loan portfolio performance, the Company's ability to secure buyers for foreclosed properties, 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.

CONSOLIDATED INCOME STATEMENT

3-Month Period Ended:

(in $000's, unaudited)

3/31/2014

3/31/2013

% Change

Interest Income

$       12,952

$       12,721

1.8%

Interest Expense

737

874

-15.7%

     Net Interest Income

12,215

11,847

3.1%





Provision for Loan & Lease Losses

150

1,600

-90.6%

    Net Int after Provision

12,065

10,247

17.7%





Service Charges

1,886

2,072

-9.0%

BOLI Income

286

507

-43.6%

Gain (Loss) on Investments

104

6

1633.3%

Other Non-Interest Income

1,431

1,525

-6.2%

    Total Non-Interest Income

3,707

4,110

-9.8%





Salaries & Benefits

5,985

5,920

1.1%

Occupancy Expense

1,505

1,551

-3.0%

Other Non-Interest Expenses

3,239

4,348

-25.5%

    Total Non-Interest Expense

10,729

11,819

-9.2%





    Income Before Taxes

5,043

2,538

98.7%

Provision for Income Taxes

1,244

204

509.8%

     Net Income

$         3,799

$         2,334

62.8%





TAX DATA




Tax-Exempt Muni Income

$            741

$            619

19.7%

Interest Income - Fully Tax Equiv

$       13,334

$       13,040

2.3%





NET CHARGE-OFFS

$            336

$         2,274

-85.2%





PER SHARE DATA

3-Month Period Ended:

(unaudited)

3/31/2014

3/31/2013

% Change

Basic Earnings per Share

$0.27

$0.17

58.8%

Diluted Earnings per Share

$0.26

$0.16

62.5%

Common Dividends

$0.08

$0.06

33.3%





Wtd. Avg. Shares Outstanding

14,228,040

14,113,502


Wtd. Avg. Diluted Shares

14,373,196

14,194,223






Book Value per Basic Share (EOP)

$12.99

$12.43

4.5%

Tangible Book Value per Share (EOP)

$12.60

$12.04

4.7%





Common Shares Outstndg. (EOP)

14,179,439

14,119,679






 KEY FINANCIAL RATIOS

3-Month Period Ended:

(unaudited)

3/31/2014

3/31/2013


Return on Average Equity

8.36%

5.42%


Return on Average Assets

1.09%

0.68%


Net Interest Margin (Tax-Equiv.)

4.00%

3.97%


Efficiency Ratio (Tax-Equiv.)

70.06%

68.62%


Net C/O's to Avg Loans (not annualized)

0.04%

0.28%






AVERAGE BALANCES

3-Month Period Ended:

(in $000's, unaudited)

3/31/2014

3/31/2013

% Change

Average Assets

$ 1,416,380

$ 1,392,608

1.7%

Average Interest-Earning Assets

$ 1,277,499

$ 1,243,408

2.7%

Avg Loans & Leases (net of def fees)

$    783,854

$    808,631

-3.1%

Average Deposits

$ 1,176,057

$ 1,160,495

1.3%

Average Equity

$    184,388

$    174,673

5.6%

 

 

STATEMENT OF CONDITION

End of Period:


(in $000's, unaudited)

3/31/2014

12/31/2013

3/31/2013

Annual Chg

ASSETS





Cash and Due from Banks

$       72,164

$       78,006

$       47,949

50.5%

Securities and Fed Funds Sold

444,797

425,044

398,755

11.5%

Loans Held for Sale

-

105

789

-100.0%






Real Estate Loans

625,215

577,839

554,206

12.8%

Agricultural Production Loans

26,026

25,180

25,843

0.7%

Comm'l & Industrial Loans & Leases

96,128

103,262

101,705

-5.5%

Mortgage Warehouse Lines

68,412

73,425

118,554

-42.3%

Consumer Loans

21,980

23,536

26,993

-18.6%

    Gross Loans & Leases

837,761

803,242

827,301

1.3%

Deferred Loan & Lease Fees

1,254

1,522

1,127

11.3%

    Loans & Leases Net of Deferred Fees

839,015

804,764

828,428

1.3%

Allowance for Loan & Lease Losses

(11,491)

(11,677)

(13,199)

-12.9%

    Net Loans & Leases

827,524

793,087

815,229

1.5%






Bank Premises & Equipment

21,153

20,393

21,346

-0.9%

Other Assets

92,683

93,614

102,294

-9.4%

     Total Assets

$ 1,458,321

$ 1,410,249

$ 1,386,362

5.2%






LIABILITIES & CAPITAL





Non-Interest Demand Deposits

$     354,455

$     365,997

$     342,048

3.6%

Int-Bearing Transaction Accounts

344,627

282,721

277,570

24.2%

Savings Deposits

150,315

144,162

129,602

16.0%

Money Market Deposits

73,005

73,132

73,743

-1.0%

Customer Time Deposits

292,776

298,167

322,971

-9.3%

Wholesale Brokered Deposits

5,000

10,000

10,000

-50.0%

    Total Deposits

1,220,178

1,174,179

1,155,934

5.6%






Junior Subordinated Debentures

30,928

30,928

30,928

0.0%

Other Interest-Bearing Liabilities

5,527

5,974

9,273

-40.4%

    Total Deposits & Int.-Bearing Liab.

1,256,633

1,211,081

1,196,135

5.1%






Other Liabilities

17,519

17,494

14,685

19.3%

Total Capital

184,169

181,674

175,542

4.9%

    Total Liabilities & Capital

$ 1,458,321

$ 1,410,249

$ 1,386,362

5.2%






CREDIT QUALITY DATA

End of Period:


(in $000's, unaudited)

3/31/2014

12/31/2013

3/31/2013

Annual Chg

Non-Accruing Loans

$       36,199

$       37,414

$       50,566

-28.4%

Foreclosed Assets

7,237

8,185

15,747

-54.0%

    Total Nonperforming Assets

$       43,436

$       45,599

$       66,313

-34.5%






Performing TDR's (not incl. in NPA's)

$       15,230

$       15,239

$       19,759

-22.9%






Non-Perf Loans to Gross Loans

4.32%

4.66%

6.11%


NPA's to Loans plus Foreclosed Assets

5.14%

5.62%

7.87%


Allowance for Ln Losses to Loans

1.37%

1.45%

1.60%







OTHER PERIOD-END STATISTICS

End of Period:


(unaudited)

3/31/2014

12/31/2013

3/31/2013


Shareholders Equity / Total Assets

12.6%

12.9%

12.7%


Loans / Deposits

68.7%

68.4%

71.6%


Non-Int. Bearing Dep. / Total Dep.

29.0%

31.2%

29.6%


SOURCE Sierra Bancorp

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
“We help people build clusters, in the classical sense of the cluster. We help people put a full stack on top of every single one of those machines. We do the full bare metal install," explained Greg Bruno, Vice President of Engineering and co-founder of StackIQ, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
“We are a managed services company. We have taken the key aspects of the cloud and the purposed data center and merged the two together and launched the Purposed Cloud about 18–24 months ago," explained Chetan Patwardhan, CEO of Stratogent, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Blue Box has been around for 10-11 years, and last year we launched Blue Box Cloud. We like the term 'Private Cloud as a Service' because we think that embodies what we are launching as a product - it's a managed hosted private cloud," explained Giles Frith, Vice President of Customer Operations at Blue Box, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Puppet Labs on Wednesday released the DevOps Salary Report, based on salary data gathered from Puppet Labs' industry-recognized State of DevOps Report. The data confirms that market demand for DevOps skills is growing, and that DevOps engineers are among the highest paid IT practitioners today. That's because IT organizations today are grappling with how to be more agile and responsive to the business, while maintaining the stability of their infrastructure. DevOps practices, such as continuous ...
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...
In a world of ever-accelerating business cycles and fast-changing client expectations, the cloud increasingly serves as a growth engine and a path to new business models. Dynamic clouds enable businesses to continuously reinvent themselves, adapting their business processes, their service and software delivery and their operations to achieve speed-to-market and quick response to customer feedback. As the cloud evolves, the industry has multiple competing cloud technologies, offering on-premises ...
DevOps Summit, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developmen...
While Docker continues to be the darling of startups, enterprises and IT innovators around the world, networking continues to be a real mess. Indeed, managing the interaction between Docker containers and networks has always been fraught with complications. Without automation in networking, the vision of running Docker at scale and letting IT run the same apps unchanged on the laptop and in the data center or for any cloud cannot be realized.
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
Application metrics, logs, and business KPIs are a goldmine. It’s easy to get started with the ELK stack (Elasticsearch, Logstash and Kibana) – you can see lots of people coming up with impressive dashboards, in less than a day, with no previous experience. Going from proof-of-concept to production tends to be a bit more difficult, unfortunately, and it tends to gobble up our attention, time, and money. In his session at DevOps Summit, Otis Gospodnetić, co-author of Lucene in Action and founder...
“The year of the cloud – we have no idea when it's really happening but we think it's happening now. For those technology providers like Zentera that are helping enterprises move to the cloud - it's been fun to watch," noted Mike Loftus, VP Product Management and Marketing at Zentera Systems, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that CenturyLink, Inc., a leader in the network services market, has been named “Platinum Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. CenturyLink is the third largest telecommunications company in the United States and is recognized as a leader in the network services market by technology industry analyst firms. The company is a global leader in cloud infrastructure and ...
Database apps on mobile devices shouldn't stop working when there's limited or no network connectivity. In his session at 16th Cloud Expo, Bradley Holt, a Developer Advocate for IBM Cloudant, will discuss how to bring data stored in a cloud database to the edge of the network (and back again), whenever an Internet connection is available. He will demonstrate techniques for replicating cloud databases with mobile devices in order to build offline-enabled mobile apps that can provide a better,...
In his session at 16th Cloud Expo, Simone Brunozzi, VP and Chief Technologist of Cloud Services at VMware, will review the changes that the cloud computing industry has gone through over the last five years and share insights into what the next five will bring. He will chronicle the challenges enterprise companies are facing as they move to the public cloud. He will delve into the “Hybrid Cloud” space and explain why every CIO should consider ‘hybrid cloud’ as part of their future strategy to a...