Sierra Bancorp, Porterville, Calif., said in its 1Q13 earnings release that the balances on its mortgage warehouse loans had declined by $52 million from the end of 2012.
Last week, Horizon Bancorp, Michigan City, Ind., said during 1Q13,
The $52 million decline in warehouse loans, which Sierra also attributed to the reduction in refinance activity, equaled the decline in Sierra’s total assets. The bank said agricultural real estate loans increased by $19 million (plus agricultural production loans were up $4 billion), but commercial loans and leases declined by $13 million, non-agricultural real estate loans fell by about $9 million and consumer loans dropped by about $2 million in addition to the decline in warehouse loans.
James C. Holly, president and CEO, said, “Our agricultural lending initiative continues to show favorable results with outstanding growth in agricultural mortgage and ag production loans.
"We still have challenges and hard work ahead of us, as evidenced in part by net interest margin compression and cyclical runoff in some loan categories, but we remain focused on developing new loan relationships and expect to end the year with some positive net growth in loans.”
Sierra had net income of $2.3 million for 1Q13, up 24% over 1Q12, which the bank notes is due to lower credit-related costs, including a reduced loan-loss provision and lower other real estate owned writedowns.
