Sierra Bancorp reports Q1 EPS 58c, consensus 64c

Reports Q1 net interest income was $28.1M for the first quarter of 2023, a decrease of $1.2M, or 4%, as compared to the fourth quarter of 2022 and an increase of $3.4M, or 14%, as compared to the first quarter of 2022. As compared to the fourth quarter of 2022, overall interest income increased by $1.8M, or 5%, due primarily to an $86.5M increase in average investment balances, as well as a 33 basis point increase in investment yield, however this was offset by a $3.0 million increase in interest expense due to the movement of deposits from lower cost transaction accounts to higher cost time deposits and an increase in borrowed funds. For the first quarter of 2023 as compared to the same quarter in 2022, the $3.4 million increase in net interest income came from a $186.9 million increase in average earning asset balances, which consisted of increases of $104.8 million in average investment balances and $82.1 million in average loan balances. In addition, there was a favorable rate variance on average earning assets of 121 basis points. Offsetting these favorable interest income variances, average interest-bearing deposit balances increased $128.6 million, with all of the increase in higher cost time deposits. Average borrowed funds increased $175.2 million. Deposit costs increased 118 basis points in the first quarter of 2023 as compared to the same quarter in 2022, along with a 201 basis points increase in borrowed funds.