Sierra Bancorp(BSRR) - 2024 Q3 - Quarterly Results

Financial Performance - Consolidated net income for Q3 2024 was $10.6 million, or $0.74 per diluted share, a 3% increase from Q2 2024 [2]. - Year-to-date net income for the first nine months of 2024 reached $30.2 million, up 6% from $28.6 million in the same period of 2023 [7]. - Net income for the three months ended September 30, 2024, was $10,603,000, an increase from $10,263,000 for the previous quarter and $9,885,000 for the same period last year [42]. - Basic earnings per share for the three months ended September 30, 2024, was $0.75, up from $0.72 in the previous quarter and $0.68 a year ago [43]. Income and Revenue - Net interest income for Q3 2024 increased by $2.7 million, or 10%, compared to Q3 2023, totaling $30.8 million [16]. - Noninterest income increased by $1.7 million, or 7%, driven by higher service charges on deposit accounts [11]. - Total noninterest income for the nine months ended September 30, 2024, was $24,009,000, compared to $22,355,000 for the same period last year, reflecting a growth of approximately 7.4% [42]. - Total noninterest income increased by $1.7 million, or 7%, for the year-to-date period ended September 30, 2024, compared to the same period in 2023 [23]. Loans and Deposits - Total loans grew by $86.1 million, or 15% annualized, during Q3 2024, reaching $2.3 billion [4]. - Total deposits increased by $19.7 million, or 3% annualized, during Q3 2024, totaling $3.0 billion [4]. - Deposit balances grew by $200.9 million, or 7%, during the first nine months of 2024, with wholesale brokered deposits increasing by $175.0 million, or 130% [31]. - Gross loans to deposits ratio increased to 78.34% as of September 30, 2024, from 75.94% in the previous quarter, indicating a stronger loan growth relative to deposits [41]. Asset Management - Total assets decreased by $33.6 million, or 1%, during the first nine months of 2024, primarily due to a $323.9 million decrease in investment securities [29]. - Total assets amounted to $3,696,154 as of September 30, 2024, a slight increase from $3,681,202 at June 30, 2024 [39]. - Total assets for Sierra Bancorp as of September 30, 2024, were $3,621,959,000, a decrease from $3,713,882,000 in the previous year [48]. Credit Quality - Nonperforming loans to total gross loans ratio was 0.45%, with total classified loans down $6.4 million year-to-date [3]. - The provision for credit losses was $2.4 million, an increase of $2.2 million primarily due to higher net charge-offs [11]. - Nonperforming loans increased to $10,348,000 as of September 30, 2024, compared to $6,473,000 in the previous quarter and $781,000 a year ago, indicating a significant rise in credit quality concerns [40]. - The allowance for credit losses on loans and leases was $22.7 million at September 30, 2024, down from $23.5 million at December 31, 2023, reflecting a reduction in specific reserves [35]. Capital and Liquidity - Total capital increased by $20.6 million, or 6%, to $358.7 million as of September 30, 2024, driven by $30.2 million in net income and a $7.4 million favorable swing in accumulated other comprehensive income [34]. - The company maintains a strong liquidity position with cash and cash equivalents of $132,797 as of September 30, 2024, up from $78,602 at December 31, 2023 [39]. - The Community Bank Leverage Ratio increased to 11.70% as of September 30, 2024 [5]. - The effective tax rate was 26.4% of pre-tax income in Q3 2024, up from 25.8% in Q3 2023 [28]. Efficiency and Ratios - The efficiency ratio (tax-equivalent) improved to 58.38% for the three months ended September 30, 2024, compared to 59.15% in the previous quarter [44]. - Shareholders' equity to total assets ratio improved to 9.70% as of September 30, 2024, compared to 9.51% in the previous quarter [41]. - The equity ratio (GAAP) improved to 9.70% as of September 30, 2024, compared to 9.51% in June 2024 and 8.26% in September 2023 [45]. Future Outlook - The company anticipates continued growth in interest-earning assets and a stable net interest margin moving forward [49]. - The company continues to face risks related to economic conditions, regulatory changes, and operational challenges as outlined in its forward-looking statements [38]. - The company was recognized as one of the strongest community banks in the country, receiving a 5-star rating from Bauer Financial in 2024 [37].