Sierra Bancorp in Porterville, Calif., has lined up a $21.3 million capital infusion.
The $1.3 billion-asset company said late Thursday that it would sell 1.9 million shares of its common stock in a private placement with institutional investors. The deal was expected to close Friday.
Sierra priced the shares at $11 each, an 18% discount from Thursday's closing price.
The company ended the second quarter with a total risk-based capital ratio of 13.98%, and its Bank of Sierra had a total risk-based capital ratio of 13.16% — well in excess of the 10% required to be considered well capitalized.
However, the company's credit problems grew during the second quarter. Nonperforming assets rose 306% from the year earlier, to $58 million, or 4.46% of total assets.
Jim Holly, Sierra's chief executive officer, said in a press release that the stock sale would strengthen its already strong capital levels and enable it to grow.