Written by The Business Journal Staff
Sierra Bancorp, parent company of Bank of the Sierra, reported a net income of $10.4 million for the third quarter, an increase of $2.1 million when compared to the second quarter. The net income of the third quarter of 2020 is 16% higher than the same quarter in 2019.
For the first nine months of this year, Sierra Bancorp had a net income of $26.5 million. During the same period in 2019, the company that number was $26.7 million, according to a press release from the bank.
The increase was driven largely by income from interest on higher loan balances and higher noninterest income, the release stated.
“As we continue to navigate these challenging times, we are very proud to serve our communities as demonstrated by our continued strong loan growth,” said Kevin McPhaill, president and CEO in the release. “This robust loan growth coupled with a continued focus on efficiency resulted in record high earnings. During these unique times, our foundation as a community bank drives our bankers to find new ways to continue to meet our customers’ needs. The coming months will bring further challenges, but we are determined to use them as opportunities to help our communities, customers, and employees succeed.”
Sierra Bancorp’s total assets increased by $605.8 million, totaling $3.2 billion. Balance sheet changes during the first nine months of 2020 include an increase in total assets of $605.8 million due mostly to a $617.7 million increase in the loan portfolio.
Loans increased 35% year-over-year to $611.8 million. Non-agricultural real estate lending increased $437.8 million and mortgages for warehouse lines increased $98.4 million. The bank also issued 1,334 Paycheck Protection Program loans totaling $123.6 million. Those loans have yielded $5 million in fees from the SBA.
At the same time five interest rate cuts from the Federal Open Market Committee negatively impacted loan yields, it also increased demand for loans. Average balances on mortgage warehouse lines increased 55%, or $92.8 million. The average yield decreased to 3.16% from 3.85% from comparative quarters.
Deposits also increased for the year by $423 million, or 20%. Those deposits were primarily in noninterest bearing or low-cost transaction and savings accounts. Higher-cost time deposits decreased.