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SB

SIERRA BANCORP (BSRR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered solid profitability: net income $10.4M and $0.72 diluted EPS with ROA 1.13% and NIM 3.65%, roughly flat QoQ but markedly improved YoY as efficiency ratio improved to 59.7% .
  • Mix shift and funding cost tailwinds persisted: deposit cost fell to 1.46% from 1.62% QoQ, while NIM held 3.65% vs 3.66% in Q3; net interest income was $30.4M vs $30.8M in Q3 .
  • Capital return accelerated: dividend raised 4% to $0.25 (paid Feb-14-2025) and 229,850 shares were repurchased in Q4 (avg $29.38); new 1.0M-share buyback program authorized through Oct-31-2025 .
  • Watch credit: NPL ratio rose to 0.84% (from 0.45% in Q3) driven primarily by one agricultural relationship; ACL/loans increased to 1.07% .
  • Liquidity/capital remain strong with $2.33B of primary/secondary liquidity and TCE ratio of 9.18%; uninsured deposits ~28% ($816M) with pass-through insurance options available .

What Went Well and What Went Wrong

  • What Went Well

    • Margin/efficiency: Net interest margin remained elevated at 3.65% and the tax‑equivalent efficiency ratio improved YoY to 59.7% (vs 67.1% in Q4’23) as operating initiatives took hold .
    • Funding costs: Cost of average total deposits declined QoQ to 1.46% (from 1.62% in Q3) as CDs repriced lower, aiding spread stability despite lower floating-rate investment yields .
    • Capital return and book value: Tangible book value per share rose to $23.15; the Board raised the quarterly dividend to $0.25 and buybacks continued in Q4 .

  • What Went Wrong

    • Credit quality: NPLs increased to 0.84% of loans (from 0.45% in Q3), largely from a single agricultural line-of-credit; the balance fell from $16.3M at 12/31 to $14.1M in Jan-2025 via paydowns, but the step-up weighed on asset quality .
    • Noninterest income: Fell $0.5M YoY due to absence of 4Q23 sale/leaseback gain and a securities restructuring impact; service charges partially offset .
    • Sequential NII softness: Net interest income dipped modestly to $30.4M (from $30.8M in Q3) as floating-rate investment yields declined, though deposit costs improved .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Net Income ($M)$10.263 $10.603 $10.364
Diluted EPS ($)$0.71 $0.74 $0.72
Net Interest Income ($M)$30.170 $30.790 $30.353
Total Noninterest Income ($M)$7.630 $7.789 $7.512
Net Interest Margin (tax‑equiv, %)3.69% 3.66% 3.65%
Efficiency Ratio (tax‑equiv, %)59.15% 58.38% 59.74%
Cost of Avg Total Deposits (%)1.53% 1.62% 1.46%
ROA (%)1.14% 1.14% 1.13%
ROE (%)11.95% 11.95% 11.49%

KPIs (Period-End)

MetricQ2 2024Q3 2024Q4 2024
Total Assets ($B)$3.681 $3.696 $3.614
Gross Loans ($B)$2.235 $2.321 $2.331
Mortgage Warehouse Lines ($M)$274 $336 $326
Total Deposits ($B)$2.942 $2.962 $2.892
Noninterest‑Bearing Deposits / Total Deposits (%)33.5% 34.22% 34.8%
Uninsured Deposits ($M, %)$805 (27%) $816 (28%) $816 (28%)
Net Charge‑offs / Avg Loans (qtr, %)0.11% 0.01% 0.01%

Credit Quality

MetricQ2 2024Q3 2024Q4 2024
Non‑performing Loans / Gross Loans (%)0.29% 0.45% 0.84%
ACL on Loans / Gross Loans (%)0.97% 0.98% 1.07%

Notes:

  • Mortgage warehouse growth remains a major 2024 driver; customers up 60% in 2024 with outstanding balances $324.6M at 12/31/24; availability $311.6M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareQ1 2025 payment (declared Jan-24-2025)$0.24 (declared for Q3 2024) $0.25 Raised
Share Repurchase AuthorizationThrough Oct 31, 2025Prior program (expired Oct 31, 2024) New authorization up to 1,000,000 shares New/renewed
Formal Financial Guidance (Revenue/Margins/OpEx)2025—No specific numeric guidance provided in filings reviewedMaintained (none)

Earnings Call Themes & Trends

Note: No earnings call transcript was available in the documents reviewed for Q4 2024.

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Net Interest Margin3.69% in Q2; margin expansion YoY on lower borrowings and higher loan yields 3.65% in Q4; flat QoQ with lower floating‑rate investment yields offset by lower deposit costs Stable-high
Deposit Costs/MixCost of deposits 1.53% in Q2; brokered deposits up to fund warehouse growth Cost of deposits fell to 1.46% in Q4; noninterest-bearing ~35% Improving QoQ
Mortgage WarehouseStrong growth Q2–Q3; balances $274M → $336M $326M at Q4; 60% customer growth in 2024; plan to expand customer base in 2025 Structural driver
Credit/Asset QualityNPLs 0.29% (Q2) rising to 0.45% (Q3), specific office loan impact NPLs up to 0.84% (single ag relationship), ACL 1.07% Deteriorated in Q4
Liquidity/Uninsured DepositsLiquidity ~$2.52B (Q2); uninsured ~27% Liquidity $2.33B; uninsured ~28% with ICS/CDARS availability Strong/liquid
Capital ReturnsBuybacks in Q2; TBV up; dividend $0.24 Buybacks continued; dividend hiked to $0.25 Increasing returns

Management Commentary

  • “We are proud to announce strong net income growth of over 16% in 2024, accompanied by solid improvements in net interest margin, efficiency ratio, return on average assets, and tangible book value per share!... We are very excited about 2025 and will continue to find opportunities to improve our bank and provide consistently strong results.” — Kevin McPhaill, CEO & President .
  • Strategic drivers cited: margin uplift from bond portfolio restructuring and reduced higher‑cost borrowings; deposit cost benefits QoQ as CDs repriced lower .
  • 2025 focus includes expanding the mortgage warehouse customer base to facilitate additional growth .

Q&A Highlights

  • Not available; no Q4 2024 earnings call transcript was found in the documents reviewed.

Estimates Context

  • S&P Global/Capital IQ consensus estimates for Q4 2024 EPS and revenue were unavailable at the time of analysis due to access limits; therefore beat/miss versus Street could not be assessed (consensus not retrieved via S&P Global).

Key Takeaways for Investors

  • Core earnings quality remains sound: Q4 EPS $0.72, ROA 1.13%, ROE 11.49%, and NIM 3.65% with efficiency ratio at 59.7% .
  • Deposit costs are easing and supporting margins (1.46% in Q4 vs 1.62% in Q3), partially offsetting lower floating‑rate investment yields .
  • Mortgage warehouse is an increasingly material profit driver; customer count up 60% in 2024 with $324.6M outstanding and plans to expand further in 2025 .
  • Asset quality bears monitoring: NPL ratio rose to 0.84% on a single ag exposure; management indicates ongoing paydowns and adequate ACL coverage (1.07%) .
  • Capital return is an incremental positive: dividend increased to $0.25 and buybacks active, with a new authorization up to 1.0M shares through Oct‑2025 .
  • Liquidity and capital buffers are sizable (liquidity $2.33B; TCE 9.18%), and uninsured deposits (~28%) are mitigated by access to ICS/CDARS pass‑through insurance .
  • Near‑term focus: sustaining NIM ≥3.6% amid rate path uncertainty, continued deposit cost normalization, prudent warehouse growth, and resolution of the ag NPL should drive narrative into 2025 .

Supporting documents:

  • Q4 2024 earnings press release and 8‑K furnished on Jan 27, 2025 .
  • Q3 2024 earnings press release and 8‑K (Oct 21, 2024) .
  • Q2 2024 earnings press release and 8‑K (Jul 22, 2024) .
  • Dividend increase press release (Jan 24, 2025) .
  • Share repurchase authorization press release (Oct 18, 2024) .