Sierra Bancorp Reports Financial Results for Q3 and First Nine Months of 2025
Sierra Bancorp, the parent company of Bank of the Sierra, has released its unaudited financial results for the third quarter and the first nine months of 2025. The company reported a consolidated net income of $9.7 million for the third quarter, a decrease of 9% compared to the second quarter of 2025. For the first nine months of 2025, the net income was $29.4 million, a slight decrease of 3% compared to the same period in 2024. Despite these declines, the company saw an increase in diluted earnings per share to $2.15, up from $2.09 in the previous year, primarily due to continued stock repurchases.
Financial Highlights
For the third quarter of 2025, Sierra Bancorp reported a net interest margin of 3.78%, an improvement from 3.68% in the prior quarter. Net interest income grew by $1.3 million, or 4%, compared to the previous quarter. The loan yield improved to 5.36%, and the cost of funds decreased to 1.45%. The efficiency ratio also improved to 58.0% from 59.4% in the prior quarter.
Asset quality remained solid, with the ratio of total nonperforming loans to total gross loans improving to 0.56%. Loans past due 30-89 days fell significantly, and total classified loans declined by $3.6 million. The company also saw balance sheet growth, with gross loans increasing by $57.2 million and customer deposits rising by $13.3 million. However, total deposits declined by $41.7 million due to a proactive reduction in higher-cost brokered deposits.
Business and Operational Highlights
During the third quarter, Sierra Bancorp maintained strong capital and liquidity positions. The tangible book value per share increased by 3% to $24.66. The company repurchased 190,342 shares of common stock at an average price of $30.55 and declared a dividend of $0.25 per share, payable on November 14, 2025. The regulatory leverage ratio for the subsidiary bank was 11.73%, and the consolidated tangible common equity ratio increased to 9.03%.
Strategic Initiatives and Corporate Developments
Sierra Bancorp continued its strategic initiatives, including stock repurchases and dividend payments. The company repurchased 802,753 shares during the past nine months, contributing to the increase in diluted earnings per share. Additionally, the company declared its 107th consecutive quarterly dividend, reflecting its commitment to returning value to shareholders.
Management's Perspective
Kevin McPhaill, President and CEO, expressed pride in the company's performance despite challenges such as a difficult interest rate environment, episodic credit issues, and inflation concerns. He highlighted the growth in the loan portfolio and customer base, as well as improvements in margin and efficiency. McPhaill emphasized the team's commitment to consistent and strong earnings and expressed optimism for the remainder of 2025 and beyond.
Future Outlook
Looking ahead, Sierra Bancorp remains focused on leveraging its strong balance sheet and team to navigate the challenges and opportunities in the financial landscape. The company aims to continue its growth trajectory while maintaining solid asset quality and capital positions.
Original SEC Filing: SIERRA BANCORP [ BSRR ] - 8-K - Oct. 27, 2025