On July 22, 2024, Sierra Bancorp (BSRR, Financial) released its 8-K filing reporting its unaudited financial results for the second quarter and first six months of 2024. Sierra Bancorp, a California-based bank holding company, offers a range of retail and commercial banking services, including various deposit products and lending activities.
Performance Overview
Sierra Bancorp reported consolidated net income of $10.3 million, or $0.71 per diluted share, for Q2 2024, surpassing the analyst estimate of $0.60 per share. This represents an increase from $9.9 million, or $0.67 per diluted share, in Q2 2023. The company also reported a 10% increase in net income on a linked-quarter basis.
Key Financial Achievements
For the first six months of 2024, Sierra Bancorp recognized net income of $19.6 million, or $1.35 per diluted share, compared to $18.7 million, or $1.26 per diluted share, for the same period in 2023. The return on average assets improved to 1.10%, and the net interest margin increased to 3.66%, compared to 1.02% and 3.43%, respectively, for the same period in 2023.
Income Statement Highlights
Net interest income for Q2 2024 was $30.2 million, a 7% increase over Q2 2023. This was primarily due to a $4.2 million increase in interest income on loans, partially offset by a $1.6 million decline in interest income on investments. Interest expense increased by $0.8 million to $13.3 million for Q2 2024, driven by higher interest rates on certain deposits.
Balance Sheet Summary
Total assets decreased by $48.6 million, or 1%, during the first half of 2024, primarily due to a $326.4 million decrease in investment securities, offset by a $144.5 million increase in gross loans and a $105.4 million increase in cash on hand. Total deposits grew by $181.2 million, or 7%, during the same period.
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Income ($000s) | 10,263 | 9,330 | 9,919 |
| Diluted EPS ($) | 0.71 | 0.64 | 0.67 |
| Return on Average Assets (%) | 1.14 | 1.06 | 1.07 |
| Net Interest Margin (%) | 3.69 | 3.62 | 3.39 |
Provision for Credit Losses
The provision for credit losses on loans was $0.9 million for Q2 2024, compared to $0.1 million in Q2 2023. The increase was primarily due to $2.9 million in net charge-offs in the first six months of 2024, compared to $0.4 million in the same period in 2023.
Noninterest Income and Expense
Total noninterest income decreased by $0.4 million, or 5%, for Q2 2024 compared to Q2 2023, but increased by $1.6 million, or 11%, for the first half of 2024. Noninterest expense decreased by $0.3 million, or 1%, in Q2 2024 compared to Q2 2023, but increased by $1.3 million, or 3%, for the first half of 2024.
Analysis and Commentary
“We are excited to share our strong second quarter results! The solid improvements achieved in the past two quarters demonstrate our balanced commitment to both our communities and shareholders as we complement growth with a focus on balance sheet strategy in a challenging interest rate environment,” stated Kevin McPhaill, CEO and President.
Sierra Bancorp's performance in Q2 2024 reflects its strategic focus on improving net interest income and managing credit losses effectively. The company's ability to exceed analyst estimates and improve key financial metrics underscores its resilience and adaptability in a challenging economic environment.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Sierra Bancorp for further details.
