SIERRA BANCORP (NASDAQ:BSRR) Files An 8-K Other EventsItem 8.01other events
On August 9, 2018, Sierra Bancorp determined that a certain loan participation purchased in the amount of approximately $10 million will be placed on non-accrual status, and a loss allowance of approximately $2 million will be established for the credit.The loan is secured by a non-owner occupied retail property located in the Sacramento area.A portion of the loan balance will likely be charged off against the allowance prior to the end of the third quarter of 2018, although the precise loss amount cannot be confirmed until the Company receives its own independent appraisal of the project.
Up to this point loan payments have been current and the loan has maintained a reasonable debt service coverage ratio.However, the decision to downgrade the loan and establish a specific loan loss allowance was made to very recent notification to the Company from the syndicate’s lead bank, 1) that the borrower has notified them of the borrower’s intent to discontinue servicing payments on the loan, and 2) that the property’s appraised value has declined significantly as a result of a drop in retail activity, deferred maintenance and occupancy issues.It appears possible that the lead bank will accept a deed in lieu of foreclosure in the near future, in which case the nonperforming loan balance would transition to “other real estate owned.”
About SIERRA BANCORP (NASDAQ:BSRR)
Sierra Bancorp is a bank holding company for Bank of the Sierra (the Bank). The Bank is a state-chartered bank, which offers a range of retail and commercial banking services. The Bank’s products and services are related to the business of lending money and accepting deposits. The Bank operates approximately 30 branch offices, an online branch, a real estate industries group, an agricultural credit division, a Small Business Administration (SBA) lending unit and a loan production office. Its Internet branch provides the ability to open deposit accounts online; an online banking option with bill-pay and mobile banking capabilities, including mobile check deposit; a customer service center that is accessible by toll-free telephone during business hours, and an automated telephone banking system. It offers a range of other banking products and services, including remote deposit capture and automated payroll services for business customers.