Sierra Bancorp(BSRR) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated net income for Q3 2025 was $9.7 million, a decrease of $0.9 million, or 9%, compared to Q2 2025[2] - For the first nine months of 2025, consolidated net income was $29.4 million, down $0.8 million, or 3%, from the same period in 2024[2] - Diluted earnings per share for the first nine months of 2025 increased to $2.15, up 3% from $2.09 in the same period in 2024[2] - Net income for the nine months ended September 30, 2025, was $29,433,000, compared to $30,196,000 for the same period last year[60] - Net income for the three months ended September 30, 2025, is $9,699,000, a decrease from $10,633,000 for the previous quarter and $10,603,000 for the same quarter last year[65] Loan and Deposit Activity - Total gross loans increased by $57.2 million, or 9% annualized, to $2.5 billion during the quarter[5] - Customer deposits rose by $13.3 million, or 2% annualized, to $2.7 billion, despite a $41.7 million decline in total deposits due to a reduction in higher-cost brokered deposits[5] - Gross loans ending balance was $2,491.8 million as of September 30, 2025, reflecting an increase from $2,434.6 million at June 30, 2025[37] - Deposit balances grew by $41.1 million, or 1%, during the first nine months of 2025, with core non-maturity deposits increasing by $138.4 million, or 7%[39] - Total deposits decreased to $2,932,760 thousand as of September 30, 2025, from $2,974,469 thousand at June 30, 2025[56] Interest Income and Margin - Net interest income increased by $1.3 million, or 4%, in Q3 2025 compared to the prior linked quarter, driven by a net interest margin increase to 3.78%[5] - For Q3 2025, net interest income increased by $3.1 million, or 3%, primarily due to a decrease of 25 basis points in the cost of funds and an increase in average interest-earning assets by $43.5 million[20] - The company's net interest margin was 3.78% for Q3 2025, up from 3.66% in Q3 2024[23] - Total interest-earning assets for the quarter ended September 30, 2025, were $3,396,714 thousand, with a net interest income of $31,968 thousand, resulting in a net interest margin of 3.78%[70] - The net interest margin for the nine months ended September 30, 2025, was 3.73%, with a net interest income of $92,734 thousand[70] Credit Quality - Nonperforming loans to total gross loans ratio improved to 0.56%, down from 0.62% in the prior linked quarter[5] - The provision for credit losses was $7.0 million, an increase of $4.6 million compared to the prior year-to-date period[7] - The provision for credit losses on loans was $3.7 million for Q3 2025, compared to $1.2 million in Q3 2024, with a year-to-date provision of $6.9 million in 2025 versus $2.3 million in 2024[24] - Total nonperforming assets decreased by $3.8 million to $15.8 million for the first nine months of 2025, with a nonperforming loans to gross loans ratio of 0.56% as of September 30, 2025, down from 0.84% at December 31, 2024[44] - Nonperforming loans decreased to $14,006,000 from $14,981,000 in the previous quarter, indicating improved credit quality[58] Capital and Equity - Total capital increased by $2.8 million, or 1%, to $360.1 million at September 30, 2025, due to $29.4 million in net income[41] - Total stockholders' equity as of September 30, 2025, is $360,083,000, an increase from $355,707,000 as of June 30, 2025, and $358,698,000 as of September 30, 2024[64] - Tangible common equity increased to $332,594,000 as of September 30, 2025, compared to $328,056,000 as of June 30, 2025, and $330,561,000 as of September 30, 2024[64] Efficiency and Expenses - The efficiency ratio (tax-equivalent) improved to 58.05% for the three months ended September 30, 2025, compared to 59.43% in the previous quarter[62] - Total noninterest expense for the three months ended September 30, 2025, is $23,635,000, a slight decrease from $23,767,000 in the previous quarter and an increase from $22,810,000 in the same quarter last year[65] Other Financial Metrics - The effective tax rate decreased to 23.6% of pre-tax income in Q3 2025, down from 26.4% in Q3 2024[33] - The allowance for credit losses on loans and leases increased to $25.2 million at September 30, 2025, compared to $21.7 million at June 30, 2025, primarily due to a $3.5 million increase in specific reserves for an impaired agricultural production loan[46] - The allowance for credit losses as a percentage of gross loans, excluding mortgage warehouse lines, was 1.21% at September 30, 2025, compared to 1.04% at June 30, 2025[49] - Book value per common share increased to $26.70 as of September 30, 2025, from $26.00 as of June 30, 2025, and $24.88 as of September 30, 2024[64]