Sierra Bancorp announced unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2012. For the fourth quarter, the company had net income of $2.098 million, an annualized return on average equity of 4.78%, and a return on average assets of 0.59%. Significant income statement changes for the fourth quarter of 2012 relative to the fourth quarter of 2011 include an increase in net gains on investments, a drop in non-interest expense, lower net interest income and a higher loan loss provision. Fourth quarter financial results incorporate the results of the company's recently-concluded regulatory exam. Net interest income fell by $521,000, or 4%, for the comparative quarters. The decline in the fourth quarter is the result of a 40 basis point drop in the company's net interest margin, partially offset by a $69 million increase in average interest-earning assets. Income before taxes was $1,700,000 against $1,331,000 a year ago. Diluted earnings per share were $0.15 against $0.11 a year ago. Tangible book value per share was $11.93 against $11.56 a year ago. Return on average equity was 4.78% against 3.67% a year ago. Return on average assets was 0.59 % against 0.46% a year ago.


The company recognized net income of $8.185 million for the year in 2012, an improvement of $405,000, or 5%, relative to net income in 2011. The increase over the prior year is primarily the result of gains on the sale of investment securities, an increase in other non-interest income, lower non-interest expense, and an income tax benefit in 2012 relative to an income tax expense accrual in 2011. These favorable variances were partially offset by lower net interest income resulting from net interest margin compression and interest reversals on loans placed on non-accrual status, and a higher provision for loan losses. The company's return on average assets was 0.59% in 2012, unchanged from 2011. The company's return on average equity increased slightly, to 4.74% in 2012 from 4.73% in 2011, and diluted earnings per share also increased to $0.58 in 2012 from $0.55 in 2011. Net interest income dropped by $2.376 million, or 5%, for the year. Income before taxes was $7,841,000 against $8,344,000 a year ago. Diluted earnings per share were $0.58 against $0.55 a year ago. Tangible book value per share was $11.93 against $11.56 a year ago. Return on average equity was 4.74% against 4.73% a year ago. Return on average assets was 0.59 % against 0.59% a year ago.

For the fourth quarter, the company announced net charge-offs of $2,532,000 against $5,609,000 a year ago.