Sierra Bancorp(BSRR) - 2025 Q1 - Quarterly Report

Part I - Financial Information Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements and accompanying notes for the period ended March 31, 2025 Consolidated Balance Sheets Total assets slightly decreased to $3.61 billion, driven by lower net loans and investments Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total cash & cash equivalents | $159,711 | $100,664 | +$59,047 | | Net loans | $2,279,613 | $2,306,604 | -$26,991 | | Total investment securities | $922,411 | $961,481 | -$39,070 | | Total assets | $3,606,183 | $3,614,271 | -$8,088 | | Total deposits | $2,849,884 | $2,891,668 | -$41,784 | | Total liabilities | $3,254,427 | $3,256,969 | -$2,542 | | Total shareholders' equity | $351,756 | $357,302 | -$5,546 | Consolidated Statements of Income Net income slightly decreased to $9.1 million due to a higher credit loss provision and lower noninterest income Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net interest income | $30,112 | $28,717 | +$1,395 | | Credit loss expense - loans | $1,961 | $97 | +$1,864 | | Total noninterest income | $6,642 | $8,589 | -$1,947 | | Total noninterest expense | $22,417 | $24,526 | -$2,109 | | Net income | $9,101 | $9,330 | -$229 | | Earnings per share diluted | $0.65 | $0.64 | +$0.01 | | Cash dividends per share | $0.25 | $0.23 | +$0.02 | Consolidated Statements of Cash Flows Cash and cash equivalents increased by $59.0 million, driven by strong operating and investing cash flows Cash Flow Summary for Three Months Ended March 31 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $40,625 | $6,981 | | Net cash provided by investing activities | $67,635 | $220,496 | | Net cash used in financing activities | ($49,213) | ($186,835) | | Increase in cash and cash equivalents | $59,047 | $40,642 | Notes to Consolidated Financial Statements (Unaudited) The notes detail accounting policies, portfolio compositions, and a subsequent loan repayment event - The company operates as a single community banking segment with total assets of $3.6 billion and total deposits of $2.8 billion at March 31, 2025[21] - Off-balance-sheet commitments to extend credit increased to $749.2 million from $636.4 million at year-end 2024, mainly from unused mortgage warehouse lines[43] - Subsequent to quarter-end, the company received a full payment of $6.5 million on a nonaccrual commercial real estate loan with a carrying amount of $5.9 million[132] Management's Discussion & Analysis of Financial Condition & Results of Operations Management analyzes Q1 2025 performance, balance sheet changes, liquidity, market risk, and capital resources - Q1 2025 net income was $9.1 million, a 2% decrease from Q1 2024, driven by higher net interest income offset by a higher provision for credit losses[143] - Total assets decreased by $8.1 million (0.2%) from year-end 2024, due to decreases in gross loans and deposits[146][150] Earnings Performance Performance was marked by higher net interest income and lower expenses, offset by credit provisions and noninterest income decline Balance Sheet Analysis The balance sheet saw a slight contraction with decreases in investment securities, loans, and deposits Liquidity and Market Risk Management The company maintains a strong liquidity position and an asset-sensitive balance sheet Primary and Secondary Liquidity Sources (in thousands) | Source | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $159,711 | $100,664 | | Unpledged investment securities | $522,332 | $552,098 | | FHLB borrowing availability | $633,368 | $629,134 | | Unsecured & Secured lines of credit | $504,785 | $504,785 | | Funds available through fed discount window | $258,130 | $298,296 | | Total | $2,259,374 | $2,327,496 | Net Interest Income Sensitivity (1-Year Horizon) | Immediate Rate Change (bps) | % Change in NII (Mar 31, 2025) | | :--- | :--- | | +400 | 8.7% | | +200 | 4.5% | | +100 | 2.4% | | -100 | (5.3)% | | -200 | (10.8)% | Capital Resources Shareholders' equity decreased due to share repurchases, though the company remains well-capitalized - The company repurchased 476,770 shares for $14.2 million during Q1 2025[146][257] Regulatory Capital Ratios | Ratio | March 31, 2025 | Minimum to be Well Capitalized | | :--- | :--- | :--- | | Bank of the Sierra | | | | Tier 1 Leverage Ratio | 12.11% | 9.00% | | Sierra Bancorp | | | | Tier 1 Leverage Ratio | 10.84% | N/A | Quantitative & Qualitative Disclosures about Market Risk This section cross-references market risk disclosures found within the Management's Discussion and Analysis - Information regarding market risk is located in Part I, Item 2, under the 'Liquidity and Market Risk Management' section[264] Controls and Procedures Management confirmed the effectiveness of disclosure controls and procedures with no significant changes in internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures were adequate and effective as of the report date[265] - No significant changes occurred in the Company's internal controls over financial reporting during the first quarter of 2025[267] Part II - Other Information Legal Proceedings Current legal proceedings are not expected to have a material adverse effect on the company's financial condition - Management does not believe that current legal actions will have a material adverse effect on the Company's financial statements[269] Risk Factors No material changes to risk factors were reported since the last annual report - No material changes from the risk factors disclosed in the Company's Form 10-K for the fiscal year ended December 31, 2024, were reported[271] Unregistered Sales of Equity Securities and Use of Proceeds The company details its Q1 2025 share repurchase activities under its publicly announced plan Stock Repurchases - Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | 157,740 | $29.26 | 154,461 | | Feb 2025 | 183,169 | $30.79 | 183,169 | | Mar 2025 | 145,466 | $28.95 | 139,140 | | Total | 486,375 | | 476,770 | - As of March 31, 2025, 325,983 shares remained available for repurchase under the 2024 Share Repurchase Plan, which expires on October 31, 2025[258][273] Exhibits This section lists all exhibits filed with the report, including required CEO and CFO certifications - Key exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32) and various employment and compensation plan documents[275]