Swamped by a surge in problem loans, Sierra Bancorp in Porterville, Calif., swung to a loss in the fourth quarter.
The $1.3 billion-asset company said Monday that it lost $1.9 million after earning nearly $5 million a year earlier. For the full year, its earnings fell 36%, to $13.4 million.
Sierra attributed the fourth-quarter loss to a loan-loss provision that grew more than 13-fold, to $13.6 million. Net chargeoffs grew more than tenfold, to $9.8 million, and nonaccruing loans increased 229%, to $27 million.
As with many other California banking companies, most of Sierra's problem loans are in its residential construction portfolio. The percentage of nonperforming loans more than tripled in the last year, to 3.15% as of Dec. 31.
Sierra said that, despite the weakening asset quality, its total risk-based capital ratio at Dec. 31 was 13.6%. A bank holding company is considered well capitalized if its risk-based capital ratio is above 10%.
The company also said its deposits increased 25% last year. It said it added $60 million of brokered deposits and gained another $104 million through Promontory Interfinancial Network LLC's Certificate of Deposit Account Registry Service.