The Bank Slate


Sierra Bancorp in Calif. inks sale-leaseback agreement

Sierra Bancorp in Porterville, Calif., said it could use proceeds from recent sale-leaseback agreements to offset potential securities losses.

The $3.7 billion-asset company disclosed in a regulatory filing that its bank will transfer ownership of 13 California branches in two transactions to affiliates of Blue Owl Real Estate Capital for net proceeds of $14.3 million. The first tranche closed on Dec. 21 and the second tranche should close early next year.

The bank will lease the branches for an initial 18-year term with renewal options. The first full year of rent expense will be about $1.7 million pretax and will be partially offset by the elimination of $300,000 of annual pretax depreciation expenses.

Rent will be adjusted by 2.25% annually.

Sierra also said it is evaluating the potential sale of a portion of its underwater securities portfolio, which would offset some or all of the gains from the sale-leaseback transactions.

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