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Basswood Capital Management Reduces Its Holding In Sierra Bancorp (BSRR)

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In a 13D filing with the SEC on Sierra Bancorp (NASDAQ:BSRR), Matthew Lindenbaum’s Basswood Capital Management disclosed an ownership stake of 1.07 million shares in the parent of Bank of the Sierra, which represents 7.85% of its outstanding common stock. This is down 13.20% from the 1.23 million shares reported in the fund’s most recent 13F filing with the Securities and Exchange Commission.

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Basswood Capital Management LLC is a long/short equity hedge fund co-established by Matthew and Bennett Lindenbaum in 1998. The investment management firm employs value-oriented, event-driven strategies and currently has approximately $2.61 billion in assets under management. Matthew Amiel Lindenbaum, a Principal and Portfolio Manager at Basswood Capital Management, started his finance career with the Mortgage Finance Group at Merrill Lynch Capital Markets, where he structured derivative mortgage securities and advised banks on financial strategies. Later on in his career, he joined SNL Securities LLC, where he eventually embarked on the position of General Partner. Therefore, the extensive expertise of Matthew Lindenbaum in the banking sector, as well as his exceptional track record throughout his financial career, played a crucial role in the success of Basswood Capital Management. According to its most recent 13F filing with the SEC, Lindenbaum’s hedge fund manages a public equity portfolio with a market value of $2.10 billion, while the finance sector accounts for 84% of its entire portfolio.

Matthew Lindenbaum
Matthew Lindenbaum
Basswood Capital

We track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about 6 basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and these stocks beat the market by 66 percentage points (123% return vs. the S&P 500’s 57% gain) over the last 34 months (see the details here).

Sierra Bancorp (NASDAQ:BSRR) is the holding company for Bank of the Sierra, which is the largest independent bank headquartered in the South San Joaquin Valley, with over $1.7 billion in total assets. Bank of the Sierra is a state-chartered bank that offers a wide portfolio of retail and commercial banking services to communities in the central and southern sections of the San Joaquin Valley. The bank maintains a diversified loan portfolio and also provides a range of deposit products for retail and business banking markets, including checking accounts, interest-bearing transactions accounts, and retirement accounts, to name just a few. The shares of Sierra Bancorp have decreased by slightly over 6% since the beginning of the current year, partly owing to the slump in its share price after the company revealed its financial results for the second quarter of 2015.

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