Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent
company of Banner Bank, today reported net income of $55.6 million,
or $1.61 per diluted share, for the first quarter of 2023, a 2%
increase compared to $54.4 million, or $1.58 per diluted share, for
the preceding quarter and a 26% increase compared to $44.0 million,
or $1.27 per diluted share, for the first quarter of 2022. Banner’s
first quarter 2023 results include $524,000 in recapture of
provision for credit losses, compared to $6.7 million of provision
for credit losses in the preceding quarter and $7.0 million in
recapture of provision for credit losses in the first quarter of
2022.
Banner announced that its Board of Directors
declared a regular quarterly cash dividend of $0.48 per share. The
dividend will be payable May 12, 2023, to common shareholders of
record on May 2, 2023.
“While the pace of change continues to
accelerate in markets we serve, and throughout the global economy,
our business model, which emphasizes moderate risk and strong
relationship banking continues to generate strong financial
results,” said Mark Grescovich, President and CEO. “Banner’s first
quarter 2023 operating results reflect the continued successful
execution of our super community bank strategy. Our performance for
the first quarter of 2023 benefited from higher yields on
interest-earning assets and an improved mix of earnings assets that
led to net interest margin expansion. Further, the continued focus
on growing client relationships is serving us well, with core
deposits representing 93% of total deposits at quarter end.
Banner’s overarching goals continue to be to do the right thing for
our clients, communities, colleagues and shareholders; and to
provide a consistent and reliable source of commerce and capital
through all economic cycles.”
At March 31, 2023, Banner Corporation had
$15.53 billion in assets, $10.02 billion in net loans and $13.15
billion in deposits. Banner operates 137 full service branch
offices, including branches located in eight of the top 20 largest
western Metropolitan Statistical Areas by population.
First Quarter
2023 Highlights
- Revenues decreased 6% to $162.6
million, compared to $172.1 million in the preceding quarter, and
increased 18% compared to $138.1 million in the first quarter a
year ago.
- Net interest income decreased 4% to
$153.3 million in the first quarter of 2023, compared to $159.1
million in the preceding quarter and increased 29% compared to
$118.7 million in the first quarter a year ago.
- Net interest margin, on a tax
equivalent basis, was 4.30%, compared to 4.23% in the preceding
quarter and 3.18% in the first quarter a year ago.
- Mortgage banking revenues increased
16% to $2.7 million, compared to $2.3 million in the preceding
quarter, and decreased 39% compared to $4.4 million in the first
quarter a year ago.
- Return on average assets was 1.44%,
compared to 1.34% in the preceding quarter and 1.06% in the first
quarter a year ago.
- Net loans receivable increased to
$10.02 billion at March 31, 2023, compared to $10.01 billion
at December 31, 2022, and increased 11% compared to $9.02 billion
at March 31, 2022.
- Non-performing assets increased to
$27.1 million, or 0.17% of total assets, at March 31, 2023,
compared to $23.4 million, or 0.15% of total assets at December 31,
2022, and $19.1 million, or 0.11% of total assets, at
March 31, 2022.
- The allowance for credit losses -
loans was $141.5 million, or 1.39% of total loans receivable, as of
March 31, 2023, compared to $141.5 million, or 1.39% of total
loans receivable as of December 31, 2022 and $125.5 million, or
1.37% of total loans receivable as of March 31, 2022.
- Core deposits (non-interest-bearing
and interest-bearing transaction and savings accounts) decreased to
$12.20 billion at March 31, 2023, compared to $12.90 billion
at December 31, 2022, and to $13.72 billion a year ago. Core
deposits represented 93% of total deposits at March 31,
2023.
- Banner Bank’s uninsured deposits
were 33% of total deposits at March 31, 2023, compared to 35%
at December 31, 2022.
- Banner Bank’s uninsured deposits
excluding collateralized public deposits and affiliate deposits
were 31% at March 31, 2023, compared to 33% at December 31,
2022.
- Available borrowing capacity was
$4.25 billion at March 31, 2023, compared to $4.31 billion at
December 31, 2022.
- On balance sheet liquidity was
$3.40 billion at March 31, 2023, compared to $3.77 billion at
December 31, 2022.
- Dividends paid to shareholders were
$0.48 per share in the quarter ended March 31, 2023, up from
$0.44 per share in the quarter ended December 31, 2022.
- Common shareholders’ equity per
share increased 5% to $44.64 at March 31, 2023, compared to
$42.59 at the preceding quarter end, and decreased 2% from $45.49 a
year ago.
- Tangible common shareholders’
equity per share* increased 7% to $33.52 at March 31, 2023,
compared to $31.41 at the preceding quarter end, and decreased 2%
from $34.25 a year ago.
*Non-GAAP (Generally Accepted Accounting
Principles) measure; See, “Additional Financial Information -
Non-GAAP Financial Measures” on the final two pages of this press
release for a discussion and reconciliation of non-GAAP financial
measures.
Income Statement Review
Net interest income was $153.3 million in the
first quarter of 2023, compared to $159.1 million in the preceding
quarter and $118.7 million in the first quarter a year ago.
Banner’s net interest margin on a tax equivalent basis was 4.30%
for the first quarter of 2023, a seven basis-point increase
compared to 4.23% in the preceding quarter and a 112 basis-point
increase compared to 3.18% in the first quarter a year ago. “Rising
market interest rates during the quarter resulted in yields on
loans and investment securities increasing at a faster pace than
our funding costs which improved our net interest margin,” said
Grescovich.
Average yields on interest-earning assets
increased 28 basis points to 4.68% for the first quarter of 2023,
compared to 4.40% for the preceding quarter and increased 139 basis
points compared to 3.29% in the first quarter a year ago. Since
March 2022, in response to inflation, the Federal Open Market
Committee (“FOMC”) of the Federal Reserve System has increased the
target range for the federal funds rate by 475 basis points,
including 50 basis points during the first quarter of 2023, to a
range of 4.75% to 5.00%. The increase in average yields on
interest-earning assets during the current quarter reflects the
benefit of variable rate interest-earning assets repricing higher,
as well as new loans being originated at higher interest rates.
Average loan yields increased 24 basis points to 5.38% compared to
5.14% in the preceding quarter and increased 88 basis points
compared to 4.50% in the first quarter a year ago. The increase in
average loan yields during the current quarter compared to the
preceding and prior year quarters was primarily the result of
rising interest rates. The year-over-year increase in average loan
yields was partially offset by a decline in the recognition of
deferred loan fee income due to loan repayments from U.S. Small
Business Administration (“SBA”) Paycheck Protection Program (“PPP”)
loan forgiveness compared to the prior year quarter. Total deposit
costs were 0.28% in the first quarter of 2023, which was an 18
basis-point increase compared to the preceding quarter and a 22
basis-point increase compared to the first quarter a year ago. The
increase in the costs of deposits was due to elevated competition
for deposits, an increase in the mix of higher cost CDs and the lag
effect of prior market rate increases on current period deposit
costs. The total cost of funding liabilities was 0.40% during the
first quarter of 2023, a 22 basis-point increase compared to 0.18%
in the preceding quarter and a 28 basis-point increase compared to
0.12% first quarter a year ago.
Banner recorded a $524,000 recapture of
provision for credit losses in the current quarter (comprised of a
$774,000 provision for credit losses - loans, a $1.3 million
recapture of provision for credit losses - unfunded loan
commitments and a $20,000 recapture of provision for credit losses
- held-to-maturity debt securities). This compares to a $6.7
million provision for credit losses in the prior quarter (comprised
of a $6.0 million provision for credit losses - loans, a $680,000
provision for credit losses - unfunded loan commitments and a
$19,000 recapture of provision for credit losses - held-to-maturity
debt securities) and a $7.0 million recapture of provision for
credit losses in the first quarter a year ago (comprised of a $7.4
million recapture of provision for credit losses - loans, a
$428,000 provision for credit losses - unfunded loan commitments
and a $13,000 recapture of provision for credit losses -
held-to-maturity debt securities). The recapture of provision for
credit losses for the current quarter primarily reflects a decrease
in unfunded construction loan commitments, which was partially
offset by higher net loan charge-offs during the current quarter.
The provision for credit losses for the preceding quarter primarily
reflects loan growth and, to a lesser extent, a deterioration in
forecasted economic indicators utilized to estimate credit
losses.
Total non-interest income was $9.3 million in
the first quarter of 2023, compared to $13.1 million in the
preceding quarter and $19.4 million in the first quarter a year
ago. The decrease in non-interest income during the current
quarter, compared to the prior quarter was primarily due to a $7.3
million net loss on the sale of securities recorded during the
current quarter, compared to a $3.7 million net loss on the sale of
securities in the preceding quarter. The decrease in non-interest
income during the current quarter, compared to the prior year
quarter was primarily due to a $1.7 million decrease in mortgage
banking revenues and the previously mentioned net loss recognized
on the sale of securities during the current quarter. Deposit fees
and other service charges were $10.6 million in the first quarter
of 2023, compared to $10.8 million in the preceding quarter and
$11.2 million in the first quarter a year ago.
Mortgage banking revenues, including gains on
one- to four-family and multifamily loan sales and loan servicing
fees, were $2.7 million in the first quarter of 2023, compared to
$2.3 million in the preceding quarter and $4.4 million in the first
quarter a year ago. The increase from the preceding quarter
primarily reflects an increase in the volume of one-to four family
loans sold. The decrease from the first quarter of 2022 primarily
reflects a reduction in the volume and a decrease in the gain on
sale margin for one- to four-family loans sold. The reduction in
the volume of one- to four-family loans sold compared to the prior
year quarter primarily reflects reduced refinancing activity, as
well as decreased purchase activity as interest rates increased.
Home purchase activity accounted for 88% of one- to four-family
mortgage loan originations in the first quarter of 2023, compared
to 90% in the preceding quarter and was 54% in the first quarter of
2022. Mortgage banking revenue included a $295,000 lower of cost or
market upward adjustment on multifamily held for sale loans for the
current quarter due to decreases in market interest rates during
the first quarter as well as $87,000 of gain recognized on the sale
of multifamily loans. This compares to a $723,000 lower of cost or
market upward adjustment recorded during the preceding quarter due
to the transfer of multifamily held for sale loans to held for
investment portfolio loans, partially offset by a negative fair
value adjustment on multifamily held for sale loans. There were no
multifamily loans sold during the preceding quarter. During the
first quarter of 2022, a $603,000 lower of cost or market downward
adjustment was recorded due to increases in market rates, partially
offset by $340,000 of gain recognized on the sale of multifamily
loans.
First quarter 2023 non-interest income also
included a $552,000 net loss for fair value adjustments as a result
of changes in the valuation of financial instruments carried at
fair value, principally comprised of certain investment securities
held for trading and limited partnership investments, and a $7.3
million net loss on the sale of securities. In the preceding
quarter, results included a $157,000 net gain for fair value
adjustments and a $3.7 million net loss on the sale of securities.
In the first quarter a year ago, results included a $49,000 net
gain for fair value adjustments and a $435,000 net gain on the sale
of securities.
Total revenue decreased 6% to $162.6 million for
the first quarter of 2023, compared to $172.1 million in the
preceding quarter, and increased 18% compared to $138.1 million in
the first quarter of 2022. Adjusted revenue* (the total of net
interest income and total non-interest income excluding the net
gain or loss on the sale of securities and the net change in
valuation of financial instruments) was $170.4 million in the first
quarter of 2023, compared to $175.7 million in the preceding
quarter and $137.6 million in the first quarter a year ago.
Total non-interest expense was $94.6 million in
the first quarter of 2023, compared to $99.0 million in the
preceding quarter and $91.2 million in the first quarter of 2022.
The decrease in non-interest expense for the current quarter
compared to the prior quarter primarily reflects a $1.5 million
decrease in occupancy and equipment expenses, primarily reflecting
increased building rent expense due to lease buyouts as well as
weather related increases in building maintenance expense during
the prior quarter and a $4.2 million decrease in professional and
legal expenses, primarily due to a $3.5 million accrual
recorded during the prior quarter in relation to a potential
settlement of a pending litigation matter, partially offset by a
$1.4 million decrease in capitalized loan origination costs,
primarily due to decreased loan production and a $1.1 million
increase in salary and employee benefits expense. The increase in
non-interest expense for the current quarter compared to the same
quarter a year ago primarily reflects an increase in salary and
employee benefits expense and a decrease in capitalized loan
origination costs, partially offset by a decrease in occupancy and
equipment expenses and a $793,000 loss on extinguishment of debt as
a result of the redemption of $50.5 million of junior
subordinated debentures during the first quarter of 2022. Banner’s
efficiency ratio was 58.20% for the first quarter, compared to
57.52% in the preceding quarter and 66.04% in the same quarter a
year ago. Banner’s adjusted efficiency ratio* was 54.23% for the
first quarter, compared to 54.43% in the preceding quarter and
62.09% in the year ago quarter.
*Non-GAAP financial measures. See, “Additional
Financial Information - Non-GAAP Financial Measures” on the final
two pages of this press release for a discussion and reconciliation
of non-GAAP financial measures.
Federal and state income tax expense totaled
$12.9 million for the first quarter of 2023 resulting in an
effective tax rate of 18.9%, reflecting the benefits from tax
exempt income. Banner’s statutory income tax rate is 23.5%,
representing a blend of the statutory federal income tax rate of
21.0% and apportioned effects of the state income tax rates.
Balance Sheet Review
Total assets decreased 2% to $15.53 billion at
March 31, 2023, compared to $15.83 billion at December 31,
2022, and decreased 7% from $16.78 billion at March 31, 2022.
The total of securities and interest-bearing deposits held at other
banks totaled $3.99 billion at March 31, 2023, compared to
$4.28 billion at December 31, 2022 and $6.06 billion at
March 31, 2022. The decrease compared to the prior quarter was
primarily due to the sale of $150.1 million of securities as
well as $150.0 million of reverse repurchase agreements
maturing during the current quarter, while the decrease compared to
the prior year quarter was primarily due to a decrease in
interest-bearing deposits held at other banks. The average
effective duration of the securities portfolio was approximately
6.6 years at March 31, 2023, compared to 6.2 years at
March 31, 2022.
Total loans receivable increased to $10.16
billion at March 31, 2023, compared to $10.15 billion at
December 31, 2022, and $9.15 billion at March 31, 2022. One-
to four-family residential loans increased 7% to $1.25 billion at
March 31, 2023, compared to $1.17 billion at December 31,
2022, and increased 74% compared to $718.4 million a year ago. The
increase in one- to four-family residential loans was primarily the
result of one- to four-family construction loans converting to one-
to four-family portfolio loans upon the completion of the
construction phase and new production. Multifamily real estate
loans increased 8% to $696.9 million at March 31, 2023,
compared to $645.1 million at December 31, 2022, and increased 16%
compared to $598.6 million a year ago. The increase in multifamily
loans was primarily due to transferring $54.0 million of
multifamily held for sale loans to the held for investment loan
portfolio during the fourth quarter of 2022 as well as multifamily
construction loans converting to multifamily portfolio loans as
construction was completed. Commercial business loans totaled $2.23
billion at both March 31, 2023 and December 31, 2022, and
increased 14% compared to $1.96 billion a year ago, primarily due
to new loan production during 2022. Total construction, land and
land development loans decreased to $1.47 billion at March 31,
2023, compared to $1.49 billion at December 31, 2022, as a result
of a decrease in one- to four-family construction loans.
Loans held for sale were $49.0 million at
March 31, 2023, compared to $56.9 million at December 31,
2022, and $64.2 million at March 31, 2022. One- to four-
family residential mortgage loans sold totaled $40.5 million
in the current quarter, compared to $39.3 million in the
preceding quarter and $210.4 million in the first quarter a
year ago, while multifamily loans sold totaled $7.6 million
during the first quarter of 2023, compared to none sold in the
preceding quarter and $15.8 million sold in the first quarter
a year ago.
Total deposits decreased to $13.15 billion at
March 31, 2023, compared to $13.62 billion at December 31,
2022, and $14.52 billion a year ago. The decline in deposits was
primarily due to interest rate sensitive clients moving a portion
of their non-operating deposit balances to higher yielding
investments. Non-interest-bearing account balances decreased 7% to
$5.76 billion at March 31, 2023, compared to $6.18 billion at
December 31, 2022, and 11% compared to $6.49 billion a year ago.
Core deposits were 93% of total deposits at March 31, 2023,
95% of total deposits at December 31, 2022 and 94% of total
deposits at March 31, 2022. Certificates of deposit increased
31% to $949.9 million at March 31, 2023, compared to $723.5
million at December 31, 2022, and increased 19% compared to $800.4
million a year earlier. The increase in certificates of deposits
during the current quarter was principally due to clients seeking
higher yields moving funds from core deposit accounts to higher
yielding certificates of deposits.
Banner Bank’s uninsured deposits were $4.42
billion or 33% of total deposits at March 31, 2023, compared
to $4.84 billion or 35% of total deposits at December 31, 2022. The
uninsured deposit calculation includes $277.7 million and $304.2
million of collateralized public deposits at March 31, 2023
and December 31, 2022, respectively. Uninsured deposits also
include cash held by the holding company of $88.0 million and $77.2
million at March 31, 2023 and December 31, 2022, respectively.
Banner Bank’s uninsured deposits, excluding collateralized public
deposits and cash held at the holding company, were 31% of deposits
at March 31, 2023, compared to 33% of total deposits at
December 31, 2022.
Banner had $170.0 million of FHLB borrowings at
March 31, 2023, compared to $50.0 million at December 31,
2022 and none a year ago. At March 31, 2023, Banner’s
off-balance sheet liquidity included additional borrowing capacity
of $2.84 billion at the FHLB and $1.29 billion at the Federal
Reserve as well as federal funds line of credit agreements with
other financial institutions of $125.0 million.
At March 31, 2023, total common
shareholders’ equity was $1.53 billion, or 9.86% of assets,
compared to $1.46 billion or 9.20% of assets at December 31, 2022,
and $1.56 billion or 9.32% of assets a year ago. The increase in
total common shareholders’ equity at March 31, 2023 compared
to December 31, 2022 was primarily due to a $38.9 million increase
in retained earnings as a result of $55.6 million in net income,
partially offset by the payment of cash dividends during the
quarter and a $37.1 million decrease in accumulated other
comprehensive loss due to an increase in the fair value of the
security portfolio. The decrease in total common shareholders’
equity from March 31, 2022 reflects a $171.5 million increase
in accumulated other comprehensive loss, primarily due to a
decrease in the fair value of the security portfolio as a result of
an increase in interest rates during 2022, the repurchase of
200,000 shares of common stock in the second quarter of 2022 at an
average cost of $54.80 per share, and the payment of cash
dividends, partially offset by a $38.9 million increase in retained
earnings. At March 31, 2023, tangible common shareholders’
equity*, which excludes goodwill and other intangible assets, net,
was $1.15 billion, or 7.59% of tangible assets*, compared to $1.07
billion, or 6.95% of tangible assets, at December 31, 2022, and
$1.18 billion, or 7.18% of tangible assets, a year ago.
Banner and Banner Bank continue to maintain
capital levels in excess of the requirements to be categorized as
“well-capitalized.” At March 31, 2023, Banner's estimated
common equity Tier 1 capital ratio was 11.80%, its estimated Tier 1
leverage capital to average assets ratio was 9.96%, and its
estimated total capital to risk-weighted assets ratio was 14.45%.
These regulatory capital ratios are estimates, pending completion
and filing of Banner’s regulatory reports.
*Non-GAAP financial measures. See, “Additional
Financial Information - Non-GAAP Financial Measures” on the final
two pages of this press release for a discussion and reconciliation
of non-GAAP financial measures.
Credit Quality
The allowance for credit losses - loans was
$141.5 million, or 1.39% of total loans receivable and 528% of
non-performing loans, at March 31, 2023, compared to $141.5
million, or 1.39% of total loans receivable and 615% of
non-performing loans, at December 31, 2022, and $125.5 million, or
1.37% of total loans receivable and 674% of non-performing loans,
at March 31, 2022. In addition to the allowance for credit
losses - loans, Banner maintains an allowance for credit losses -
unfunded loan commitments, which was $13.4 million at
March 31, 2023, compared to $14.7 million at December 31, 2022
and $12.9 million at March 31, 2022. Net loan charge-offs
totaled $782,000 in the first quarter of 2023, compared to net loan
charge-offs of $496,000 in the preceding quarter and net loan
recoveries of $748,000 in the first quarter a year ago.
Non-performing loans were $26.8 million at March 31, 2023,
compared to $23.0 million at December 31, 2022, and $18.6 million a
year ago.
Substandard loans were $148.0 million at
March 31, 2023, compared to $137.2 million at December 31,
2022, and $178.4 million a year ago. The increase from the prior
quarter related primarily to commercial real estate loan downgrades
in the quarter. The decrease from a year ago primarily reflects the
payoff of substandard loans as well as risk rating upgrades during
2022.
Total non-performing assets were $27.1 million,
or 0.17% of total assets, at March 31, 2023, compared to $23.4
million, or 0.15% of total assets, at December 31, 2022, and $19.1
million, or 0.11% of total assets, a year ago.
Conference Call
Banner will host a conference call on Thursday
April 20, 2023, at 8:00 a.m. PDT, to discuss its first quarter
results. Interested investors may listen to the call live at
www.bannerbank.com. Investment professionals are invited to dial
(833) 470-1428 using access code 703224 to participate in the call.
A replay will be available for one week at (866) 813-9403 using
access code 657206 or at www.bannerbank.com.
About the Company
Banner Corporation is a $15.53 billion bank
holding company operating one commercial bank in four Western
states through a network of branches offering a full range of
deposit services and business, commercial real estate,
construction, residential, agricultural and consumer loans. Visit
Banner Bank on the Web at www.bannerbank.com.
Forward-Looking Statements
When used in this press release and in other
documents filed with or furnished to the Securities and Exchange
Commission (the “SEC”), in press releases or other public
stockholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases
“may,” “believe,” “will,” “will likely result,” “are expected to,”
“will continue,” “is anticipated,” “estimate,” “project,” “plans,”
“potential,” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. You are cautioned not to
place undue reliance on any forward-looking statements, which speak
only as of the date such statements are made and based only on
information then actually known to Banner. Banner does not
undertake and specifically disclaims any obligation to revise any
forward-looking statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such
statements. These statements may relate to future financial
performance, strategic plans or objectives, revenues or earnings
projections, or other financial information. By their nature, these
statements are subject to numerous uncertainties that could cause
actual results to differ materially from those anticipated in the
statements and could negatively affect Banner’s operating and stock
price performance.
Factors that could cause Banner’s actual results
to differ materially from those described in the forward-looking
statements, include but are not limited to, the following: (1)
potential adverse impacts to economic conditions in our local
market areas, other markets where the Company has lending
relationships, or other aspects of the Company’s business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation, a potential recession or slowed economic growth caused
by increasing political instability from acts of war including
Russia’s invasion of Ukraine, as well as increasing oil prices and
supply chain disruptions, and any governmental or societal
responses to the COVID-19 pandemic, including the possibility of
new COVID-19 variants; (2) the uncertain impacts of quantitative
tightening and current and future monetary policies of the Federal
Reserve; (3) the credit risks of lending activities, including
changes in the level and direction of loan delinquencies and
write-offs and changes in estimates of the adequacy of the
allowance for credit losses, which could necessitate additional
provisions for credit losses, resulting both from loans originated
and loans acquired from other financial institutions; (4) results
of examinations by regulatory authorities, including the
possibility that any such regulatory authority may, among other
things, require increases in the allowance for credit losses or
writing down of assets or impose restrictions or penalties with
respect to Banner’s activities; (5) competitive pressures among
depository institutions; (6) the effect of inflation on interest
rate movements and their impact on client behavior and net interest
margin; (7) the transition away from the London Interbank Offered
Rate (LIBOR) toward new interest rate benchmarks; (8) the impact of
repricing and competitors’ pricing initiatives on loan and deposit
products; (9) fluctuations in real estate values; (10) the ability
to adapt successfully to technological changes to meet clients’
needs and developments in the market place; (11) the ability to
access cost-effective funding; (12) disruptions, security breaches
or other adverse events, failures or interruptions in, or attacks
on, information technology systems or on the third-party vendors
who perform critical processing functions; (13) changes in
financial markets; (14) changes in economic conditions in general
and in Washington, Idaho, Oregon and California in particular,
including the risk of inflation; (15) the costs, effects and
outcomes of litigation; (16) legislation or regulatory changes,
including but not limited to changes in regulatory policies and
principles, or the interpretation of regulatory capital or other
rules, other governmental initiatives affecting the financial
services industry and changes in federal and/or state tax laws or
interpretations thereof by taxing authorities; (17) changes in
accounting principles, policies or guidelines; (18) future
acquisitions by Banner of other depository institutions or lines of
business; (19) future goodwill impairment due to changes in
Banner’s business or changes in market conditions; (20) the costs
associated with Banner Forward; (21) other economic, competitive,
governmental, regulatory, and technological factors affecting our
operations, pricing, products and services; and (22) other risks
detailed from time to time in Banner’s filings with the Securities
and Exchange Commission including Banner’s Quarterly Reports on
Form 10-Q and Annual Reports on Form 10-K.
RESULTS OF
OPERATIONS |
|
Quarters Ended |
(in thousands except shares
and per share data) |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
INTEREST
INCOME: |
|
|
|
|
|
|
Loans receivable |
|
$ |
133,257 |
|
|
$ |
129,450 |
|
|
$ |
100,350 |
|
Mortgage-backed securities |
|
|
18,978 |
|
|
|
19,099 |
|
|
|
14,109 |
|
Securities and cash equivalents |
|
|
14,726 |
|
|
|
17,009 |
|
|
|
8,432 |
|
Total interest income |
|
|
166,961 |
|
|
|
165,558 |
|
|
|
122,891 |
|
INTEREST
EXPENSE: |
|
|
|
|
|
|
Deposits |
|
|
9,244 |
|
|
|
3,623 |
|
|
|
2,086 |
|
Federal Home Loan Bank (FHLB) advances |
|
|
1,264 |
|
|
|
198 |
|
|
|
291 |
|
Other borrowings |
|
|
381 |
|
|
|
132 |
|
|
|
84 |
|
Subordinated debt |
|
|
2,760 |
|
|
|
2,534 |
|
|
|
1,776 |
|
Total interest expense |
|
|
13,649 |
|
|
|
6,487 |
|
|
|
4,237 |
|
Net interest income |
|
|
153,312 |
|
|
|
159,071 |
|
|
|
118,654 |
|
(RECAPTURE) PROVISION
FOR CREDIT LOSSES |
|
|
(524 |
) |
|
|
6,704 |
|
|
|
(6,961 |
) |
Net interest income after (recapture) provision for credit
losses |
|
|
153,836 |
|
|
|
152,367 |
|
|
|
125,615 |
|
NON-INTEREST
INCOME: |
|
|
|
|
|
|
Deposit fees and other service charges |
|
|
10,562 |
|
|
|
10,821 |
|
|
|
11,189 |
|
Mortgage banking operations |
|
|
2,691 |
|
|
|
2,311 |
|
|
|
4,440 |
|
Bank-owned life insurance |
|
|
2,188 |
|
|
|
2,120 |
|
|
|
1,631 |
|
Miscellaneous |
|
|
1,640 |
|
|
|
1,382 |
|
|
|
1,683 |
|
|
|
|
17,081 |
|
|
|
16,634 |
|
|
|
18,943 |
|
Net (loss) gain on sale of securities |
|
|
(7,252 |
) |
|
|
(3,721 |
) |
|
|
435 |
|
Net change in valuation of financial instruments carried at fair
value |
|
|
(552 |
) |
|
|
157 |
|
|
|
49 |
|
Total non-interest income |
|
|
9,277 |
|
|
|
13,070 |
|
|
|
19,427 |
|
NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
Salary and employee benefits |
|
|
61,389 |
|
|
|
60,309 |
|
|
|
59,486 |
|
Less capitalized loan origination costs |
|
|
(3,431 |
) |
|
|
(4,877 |
) |
|
|
(6,230 |
) |
Occupancy and equipment |
|
|
11,970 |
|
|
|
13,506 |
|
|
|
13,220 |
|
Information and computer data services |
|
|
7,147 |
|
|
|
6,535 |
|
|
|
6,651 |
|
Payment and card processing services |
|
|
4,618 |
|
|
|
5,109 |
|
|
|
4,896 |
|
Professional and legal expenses |
|
|
2,121 |
|
|
|
6,328 |
|
|
|
2,180 |
|
Advertising and marketing |
|
|
806 |
|
|
|
1,350 |
|
|
|
461 |
|
Deposit insurance |
|
|
1,890 |
|
|
|
1,739 |
|
|
|
1,524 |
|
State and municipal business and use taxes |
|
|
1,300 |
|
|
|
1,304 |
|
|
|
1,162 |
|
Real estate operations, net |
|
|
(277 |
) |
|
|
28 |
|
|
|
(79 |
) |
Amortization of core deposit intangibles |
|
|
1,050 |
|
|
|
1,215 |
|
|
|
1,424 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
793 |
|
Miscellaneous |
|
|
6,038 |
|
|
|
6,467 |
|
|
|
5,707 |
|
Total non-interest expense |
|
|
94,621 |
|
|
|
99,013 |
|
|
|
91,195 |
|
Income before provision for income taxes |
|
|
68,492 |
|
|
|
66,424 |
|
|
|
53,847 |
|
PROVISION
FOR INCOME TAXES |
|
|
12,937 |
|
|
|
12,044 |
|
|
|
9,884 |
|
NET
INCOME |
|
$ |
55,555 |
|
|
$ |
54,380 |
|
|
$ |
43,963 |
|
Earnings per common
share: |
|
|
|
|
|
|
Basic |
|
$ |
1.62 |
|
|
$ |
1.59 |
|
|
$ |
1.28 |
|
Diluted |
|
$ |
1.61 |
|
|
$ |
1.58 |
|
|
$ |
1.27 |
|
Cumulative dividends declared
per common share |
|
$ |
0.48 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
Basic |
|
|
34,239,533 |
|
|
|
34,226,162 |
|
|
|
34,300,742 |
|
Diluted |
|
|
34,457,869 |
|
|
|
34,437,151 |
|
|
|
34,598,436 |
|
Increase in common shares
outstanding |
|
|
114,522 |
|
|
|
2,259 |
|
|
|
120,152 |
|
FINANCIAL CONDITION |
|
|
|
|
|
|
|
Percentage Change |
(in thousands except shares
and per share data) |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
194,629 |
|
|
$ |
198,154 |
|
|
$ |
414,780 |
|
|
(1.8 |
)% |
|
(53.1 |
)% |
Interest-bearing deposits |
|
|
48,363 |
|
|
|
44,908 |
|
|
|
1,573,608 |
|
|
7.7 |
% |
|
(96.9 |
)% |
Total cash and cash equivalents |
|
|
242,992 |
|
|
|
243,062 |
|
|
|
1,988,388 |
|
|
— |
% |
|
(87.8 |
)% |
Securities - trading |
|
|
28,591 |
|
|
|
28,694 |
|
|
|
27,354 |
|
|
(0.4 |
)% |
|
4.5 |
% |
Securities - available for
sale, amortized cost $3,040,211, $3,218,777 and $3,315,213,
respectively |
|
|
2,653,860 |
|
|
|
2,789,031 |
|
|
|
3,147,547 |
|
|
(4.8 |
)% |
|
(15.7 |
)% |
Securities - held to maturity,
fair value $957,062, $942,180 and $968,540, respectively |
|
|
1,109,595 |
|
|
|
1,117,588 |
|
|
|
1,015,522 |
|
|
(0.7 |
)% |
|
9.3 |
% |
Total securities |
|
|
3,792,046 |
|
|
|
3,935,313 |
|
|
|
4,190,423 |
|
|
(3.6 |
)% |
|
(9.5 |
)% |
FHLB stock |
|
|
16,800 |
|
|
|
12,000 |
|
|
|
10,000 |
|
|
40.0 |
% |
|
68.0 |
% |
Securities purchased under
agreements to resell |
|
|
150,000 |
|
|
|
300,000 |
|
|
|
300,000 |
|
|
(50.0 |
)% |
|
(50.0 |
)% |
Loans held for sale |
|
|
49,016 |
|
|
|
56,857 |
|
|
|
64,218 |
|
|
(13.8 |
)% |
|
(23.7 |
)% |
Loans receivable |
|
|
10,160,684 |
|
|
|
10,146,724 |
|
|
|
9,146,629 |
|
|
0.1 |
% |
|
11.1 |
% |
Allowance for credit losses –
loans |
|
|
(141,457 |
) |
|
|
(141,465 |
) |
|
|
(125,471 |
) |
|
— |
% |
|
12.7 |
% |
Net loans receivable |
|
|
10,019,227 |
|
|
|
10,005,259 |
|
|
|
9,021,158 |
|
|
0.1 |
% |
|
11.1 |
% |
Accrued interest
receivable |
|
|
52,094 |
|
|
|
57,284 |
|
|
|
41,827 |
|
|
(9.1 |
)% |
|
24.5 |
% |
Property and equipment,
net |
|
|
136,362 |
|
|
|
138,754 |
|
|
|
142,594 |
|
|
(1.7 |
)% |
|
(4.4 |
)% |
Goodwill |
|
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
— |
% |
|
— |
% |
Other intangibles, net |
|
|
8,390 |
|
|
|
9,440 |
|
|
|
13,431 |
|
|
(11.1 |
)% |
|
(37.5 |
)% |
Bank-owned life insurance |
|
|
299,754 |
|
|
|
297,565 |
|
|
|
294,556 |
|
|
0.7 |
% |
|
1.8 |
% |
Operating lease right-of-use
assets |
|
|
47,106 |
|
|
|
49,283 |
|
|
|
52,792 |
|
|
(4.4 |
)% |
|
(10.8 |
)% |
Other assets |
|
|
346,695 |
|
|
|
355,493 |
|
|
|
283,663 |
|
|
(2.5 |
)% |
|
22.2 |
% |
Total assets |
|
$ |
15,533,603 |
|
|
$ |
15,833,431 |
|
|
$ |
16,776,171 |
|
|
(1.9 |
)% |
|
(7.4 |
)% |
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
5,764,009 |
|
|
$ |
6,176,998 |
|
|
$ |
6,494,852 |
|
|
(6.7 |
)% |
|
(11.3 |
)% |
Interest-bearing transaction and savings accounts |
|
|
6,440,261 |
|
|
|
6,719,531 |
|
|
|
7,228,558 |
|
|
(4.2 |
)% |
|
(10.9 |
)% |
Interest-bearing certificates |
|
|
949,932 |
|
|
|
723,530 |
|
|
|
800,364 |
|
|
31.3 |
% |
|
18.7 |
% |
Total deposits |
|
|
13,154,202 |
|
|
|
13,620,059 |
|
|
|
14,523,774 |
|
|
(3.4 |
)% |
|
(9.4 |
)% |
Advances from FHLB |
|
|
170,000 |
|
|
|
50,000 |
|
|
|
— |
|
|
240.0 |
% |
|
nm |
|
Other borrowings |
|
|
214,564 |
|
|
|
232,799 |
|
|
|
266,778 |
|
|
(7.8 |
)% |
|
(19.6 |
)% |
Subordinated notes, net |
|
|
99,046 |
|
|
|
98,947 |
|
|
|
98,658 |
|
|
0.1 |
% |
|
0.4 |
% |
Junior subordinated debentures
at fair value |
|
|
74,703 |
|
|
|
74,857 |
|
|
|
70,510 |
|
|
(0.2 |
)% |
|
5.9 |
% |
Operating lease
liabilities |
|
|
52,772 |
|
|
|
55,205 |
|
|
|
57,343 |
|
|
(4.4 |
)% |
|
(8.0 |
)% |
Accrued expenses and other
liabilities |
|
|
191,326 |
|
|
|
200,839 |
|
|
|
148,689 |
|
|
(4.7 |
)% |
|
28.7 |
% |
Deferred compensation |
|
|
45,295 |
|
|
|
44,293 |
|
|
|
46,639 |
|
|
2.3 |
% |
|
(2.9 |
)% |
Total liabilities |
|
|
14,001,908 |
|
|
|
14,376,999 |
|
|
|
15,212,391 |
|
|
(2.6 |
)% |
|
(8.0 |
)% |
SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
1,293,225 |
|
|
|
1,293,959 |
|
|
|
1,298,212 |
|
|
(0.1 |
)% |
|
(0.4 |
)% |
Retained earnings |
|
|
564,106 |
|
|
|
525,242 |
|
|
|
419,659 |
|
|
7.4 |
% |
|
34.4 |
% |
Accumulated other
comprehensive loss |
|
|
(325,636 |
) |
|
|
(362,769 |
) |
|
|
(154,091 |
) |
|
(10.2 |
)% |
|
111.3 |
% |
Total shareholders’ equity |
|
|
1,531,695 |
|
|
|
1,456,432 |
|
|
|
1,563,780 |
|
|
5.2 |
% |
|
(2.1 |
)% |
Total liabilities and shareholders’ equity |
|
$ |
15,533,603 |
|
|
$ |
15,833,431 |
|
|
$ |
16,776,171 |
|
|
(1.9 |
)% |
|
(7.4 |
)% |
Common Shares
Issued: |
|
|
|
|
|
|
|
|
|
|
Shares outstanding at end of
period |
|
|
34,308,540 |
|
|
|
34,194,018 |
|
|
|
34,372,784 |
|
|
|
|
|
Common shareholders’ equity
per share (1) |
|
$ |
44.64 |
|
|
$ |
42.59 |
|
|
$ |
45.49 |
|
|
|
|
|
Common shareholders’ tangible
equity per share (1) (2) |
|
$ |
33.52 |
|
|
$ |
31.41 |
|
|
$ |
34.25 |
|
|
|
|
|
Common shareholders’ tangible
equity to tangible assets (2) |
|
|
7.59 |
% |
|
|
6.95 |
% |
|
|
7.18 |
% |
|
|
|
|
Consolidated Tier 1 leverage
capital ratio |
|
|
9.96 |
% |
|
|
9.45 |
% |
|
|
8.58 |
% |
|
|
|
|
(1) |
|
Calculation is based on number of common shares outstanding at the
end of the period rather than weighted average
shares outstanding. |
(2) |
|
Common shareholders’ tangible equity and tangible assets exclude
goodwill and other intangible assets. These ratios represent
non-GAAP financial measures. See, “Additional Financial Information
- Non-GAAP Financial Measures” on the final two pages of this press
release for a discussion and reconciliation of non-GAAP financial
measures. |
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change |
LOANS |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
(CRE): |
|
|
|
|
|
|
|
|
|
|
Owner-occupied |
|
$ |
865,705 |
|
|
$ |
845,320 |
|
|
$ |
872,801 |
|
|
2.4 |
% |
|
(0.8 |
)% |
Investment properties |
|
|
1,520,261 |
|
|
|
1,589,975 |
|
|
|
1,670,896 |
|
|
(4.4 |
)% |
|
(9.0 |
)% |
Small balance CRE |
|
|
1,179,749 |
|
|
|
1,200,251 |
|
|
|
1,162,164 |
|
|
(1.7 |
)% |
|
1.5 |
% |
Multifamily real estate |
|
|
696,864 |
|
|
|
645,071 |
|
|
|
598,588 |
|
|
8.0 |
% |
|
16.4 |
% |
Construction, land and land
development: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial construction |
|
|
191,051 |
|
|
|
184,876 |
|
|
|
179,796 |
|
|
3.3 |
% |
|
6.3 |
% |
Multifamily construction |
|
|
362,425 |
|
|
|
325,816 |
|
|
|
274,015 |
|
|
11.2 |
% |
|
32.3 |
% |
One- to four-family construction |
|
|
584,655 |
|
|
|
647,329 |
|
|
|
582,800 |
|
|
(9.7 |
)% |
|
0.3 |
% |
Land and land development |
|
|
329,438 |
|
|
|
328,475 |
|
|
|
317,560 |
|
|
0.3 |
% |
|
3.7 |
% |
Commercial business: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
|
1,260,478 |
|
|
|
1,275,813 |
|
|
|
1,081,847 |
|
|
(1.2 |
)% |
|
16.5 |
% |
SBA PPP |
|
|
5,569 |
|
|
|
7,594 |
|
|
|
57,854 |
|
|
(26.7 |
)% |
|
(90.4 |
)% |
Small business scored |
|
|
960,650 |
|
|
|
947,092 |
|
|
|
817,065 |
|
|
1.4 |
% |
|
17.6 |
% |
Agricultural business,
including secured by farmland: |
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural business, including secured by farmland |
|
|
272,377 |
|
|
|
294,743 |
|
|
|
244,580 |
|
|
(7.6 |
)% |
|
11.4 |
% |
SBA PPP |
|
|
330 |
|
|
|
334 |
|
|
|
708 |
|
|
(1.2 |
)% |
|
(53.4 |
)% |
One- to four-family
residential |
|
|
1,252,104 |
|
|
|
1,173,112 |
|
|
|
718,403 |
|
|
6.7 |
% |
|
74.3 |
% |
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
Consumer—home equity revolving lines of credit |
|
|
564,334 |
|
|
|
566,291 |
|
|
|
470,485 |
|
|
(0.3 |
)% |
|
19.9 |
% |
Consumer—other |
|
|
114,694 |
|
|
|
114,632 |
|
|
|
97,067 |
|
|
0.1 |
% |
|
18.2 |
% |
Total loans receivable |
|
$ |
10,160,684 |
|
|
$ |
10,146,724 |
|
|
$ |
9,146,629 |
|
|
0.1 |
% |
|
11.1 |
% |
Loans 30 - 89 days past due
and on accrual |
|
$ |
14,037 |
|
|
$ |
17,186 |
|
|
$ |
9,611 |
|
|
|
|
|
|
|
Total delinquent loans
(including loans on non-accrual), net |
|
$ |
37,251 |
|
|
$ |
32,371 |
|
|
$ |
19,231 |
|
|
|
|
|
|
|
Total delinquent
loans / Total loans receivable |
|
|
0.37 |
% |
|
|
0.32 |
% |
|
|
0.21 |
% |
|
|
|
|
|
|
LOANS BY
GEOGRAPHIC
LOCATION |
|
Percentage Change |
|
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
|
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington |
|
$ |
4,808,821 |
|
|
47.3 |
% |
|
$ |
4,777,546 |
|
|
$ |
4,254,748 |
|
|
0.7 |
% |
|
13.0 |
% |
California |
|
|
2,490,666 |
|
|
24.5 |
% |
|
|
2,484,980 |
|
|
|
2,195,904 |
|
|
0.2 |
% |
|
13.4 |
% |
Oregon |
|
|
1,823,057 |
|
|
17.9 |
% |
|
|
1,826,743 |
|
|
|
1,629,281 |
|
|
(0.2 |
)% |
|
11.9 |
% |
Idaho |
|
|
565,335 |
|
|
5.6 |
% |
|
|
565,586 |
|
|
|
541,706 |
|
|
— |
% |
|
4.4 |
% |
Utah |
|
|
67,085 |
|
|
0.7 |
% |
|
|
75,967 |
|
|
|
84,720 |
|
|
(11.7 |
)% |
|
(20.8 |
)% |
Other |
|
|
405,720 |
|
|
4.0 |
% |
|
|
415,902 |
|
|
|
440,270 |
|
|
(2.4 |
)% |
|
(7.8 |
)% |
Total loans receivable |
|
$ |
10,160,684 |
|
|
100.0 |
% |
|
$ |
10,146,724 |
|
|
$ |
9,146,629 |
|
|
0.1 |
% |
|
11.1 |
% |
ADDITIONAL FINANCIAL INFORMATION |
(dollars in
thousands) |
|
LOAN
ORIGINATIONS |
Quarters Ended |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Commercial real estate |
$ |
75,768 |
|
|
$ |
117,787 |
|
|
$ |
87,421 |
|
Multifamily real estate |
|
35,520 |
|
|
|
8,881 |
|
|
|
21,169 |
|
Construction and land |
|
247,842 |
|
|
|
301,804 |
|
|
|
545,475 |
|
Commercial business |
|
131,826 |
|
|
|
298,396 |
|
|
|
272,513 |
|
Agricultural business |
|
23,181 |
|
|
|
24,314 |
|
|
|
28,676 |
|
One-to four-family
residential |
|
34,265 |
|
|
|
83,491 |
|
|
|
55,821 |
|
Consumer |
|
60,888 |
|
|
|
102,502 |
|
|
|
121,959 |
|
Total loan originations
(excluding loans held for sale) |
$ |
609,290 |
|
|
$ |
937,175 |
|
|
$ |
1,133,034 |
|
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
Quarters Ended |
CHANGE IN
THE |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
ALLOWANCE FOR CREDIT
LOSSES – LOANS |
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
141,465 |
|
|
$ |
135,918 |
|
|
$ |
132,099 |
|
Provision (recapture) for
credit losses – loans |
|
|
774 |
|
|
|
6,043 |
|
|
|
(7,376 |
) |
Recoveries of loans previously
charged off: |
|
|
|
|
|
|
Commercial real estate |
|
|
184 |
|
|
|
88 |
|
|
|
87 |
|
Construction and land |
|
|
— |
|
|
|
— |
|
|
|
384 |
|
One- to four-family real estate |
|
|
117 |
|
|
|
18 |
|
|
|
40 |
|
Commercial business |
|
|
119 |
|
|
|
616 |
|
|
|
149 |
|
Agricultural business, including secured by farmland |
|
|
109 |
|
|
|
91 |
|
|
|
118 |
|
Consumer |
|
|
169 |
|
|
|
153 |
|
|
|
216 |
|
|
|
|
698 |
|
|
|
966 |
|
|
|
994 |
|
Loans charged off: |
|
|
|
|
|
|
Commercial real estate |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Construction and land |
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
One- to four-family real estate |
|
|
(30 |
) |
|
|
— |
|
|
|
— |
|
Commercial business |
|
|
(1,158 |
) |
|
|
(1,231 |
) |
|
|
(82 |
) |
Consumer |
|
|
(292 |
) |
|
|
(231 |
) |
|
|
(157 |
) |
|
|
|
(1,480 |
) |
|
|
(1,462 |
) |
|
|
(246 |
) |
Net (charge-offs) recoveries |
|
|
(782 |
) |
|
|
(496 |
) |
|
|
748 |
|
Balance, end of period |
|
$ |
141,457 |
|
|
$ |
141,465 |
|
|
$ |
125,471 |
|
Net (charge-offs) recoveries /
Average loans receivable |
|
|
(0.008 |
)% |
|
|
(0.005 |
)% |
|
|
0.008 |
% |
|
|
|
|
|
|
|
ALLOCATION
OF |
|
|
|
|
|
|
ALLOWANCE FOR CREDIT
LOSSES – LOANS |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Specific or allocated credit
loss allowance: |
|
|
|
|
|
|
Commercial real estate |
|
$ |
42,975 |
|
|
$ |
44,086 |
|
|
$ |
47,264 |
|
Multifamily real estate |
|
|
8,475 |
|
|
|
7,734 |
|
|
|
7,183 |
|
Construction and land |
|
|
28,433 |
|
|
|
29,171 |
|
|
|
26,679 |
|
One- to four-family real estate |
|
|
15,736 |
|
|
|
14,729 |
|
|
|
8,109 |
|
Commercial business |
|
|
33,735 |
|
|
|
33,299 |
|
|
|
26,655 |
|
Agricultural business, including secured by farmland |
|
|
3,094 |
|
|
|
3,475 |
|
|
|
2,586 |
|
Consumer |
|
|
9,009 |
|
|
|
8,971 |
|
|
|
6,995 |
|
Total allowance for credit losses – loans |
|
$ |
141,457 |
|
|
$ |
141,465 |
|
|
$ |
125,471 |
|
Allowance for credit losses -
loans / Total loans receivable |
|
|
1.39 |
% |
|
|
1.39 |
% |
|
|
1.37 |
% |
Allowance for credit losses -
loans / Non-performing loans |
|
|
528 |
% |
|
|
615 |
% |
|
|
674 |
% |
|
|
Quarters Ended |
CHANGE IN
THE |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
ALLOWANCE FOR CREDIT
LOSSES - UNFUNDED LOAN COMMITMENTS |
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
14,721 |
|
|
$ |
14,041 |
|
|
$ |
12,432 |
|
(Recapture) provision for
credit losses - unfunded loan commitments |
|
|
(1,278 |
) |
|
|
680 |
|
|
|
428 |
|
Balance, end of period |
|
$ |
13,443 |
|
|
$ |
14,721 |
|
|
$ |
12,860 |
|
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
NON-PERFORMING
ASSETS |
|
|
|
|
|
Loans on non-accrual
status: |
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
Commercial |
$ |
2,815 |
|
|
$ |
3,683 |
|
|
$ |
10,618 |
|
Construction and land |
|
172 |
|
|
|
181 |
|
|
|
119 |
|
One- to four-family |
|
6,789 |
|
|
|
5,236 |
|
|
|
2,199 |
|
Commercial business |
|
9,365 |
|
|
|
9,886 |
|
|
|
1,845 |
|
Agricultural business, including secured by farmland |
|
4,074 |
|
|
|
594 |
|
|
|
1,021 |
|
Consumer |
|
2,247 |
|
|
|
2,126 |
|
|
|
2,123 |
|
|
|
25,462 |
|
|
|
21,706 |
|
|
|
17,925 |
|
Loans more than 90 days
delinquent, still on accrual: |
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
One- to four-family |
|
445 |
|
|
|
1,023 |
|
|
|
210 |
|
Commercial business |
|
— |
|
|
|
— |
|
|
|
351 |
|
Consumer |
|
865 |
|
|
|
264 |
|
|
|
121 |
|
|
|
1,310 |
|
|
|
1,287 |
|
|
|
682 |
|
Total non-performing
loans |
|
26,772 |
|
|
|
22,993 |
|
|
|
18,607 |
|
REO |
|
340 |
|
|
|
340 |
|
|
|
429 |
|
Other repossessed assets |
|
17 |
|
|
|
17 |
|
|
|
17 |
|
Total non-performing assets |
$ |
27,129 |
|
|
$ |
23,350 |
|
|
$ |
19,053 |
|
Total non-performing
assets to total assets |
|
0.17 |
% |
|
|
0.15 |
% |
|
|
0.11 |
% |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
LOANS BY CREDIT RISK
RATING |
|
|
|
|
|
|
|
|
|
|
|
Pass |
$ |
10,008,385 |
|
|
$ |
10,000,493 |
|
|
$ |
8,961,358 |
|
Special Mention |
|
4,251 |
|
|
|
9,081 |
|
|
|
6,908 |
|
Substandard |
|
148,048 |
|
|
|
137,150 |
|
|
|
178,363 |
|
Total |
$ |
10,160,684 |
|
|
$ |
10,146,724 |
|
|
$ |
9,146,629 |
|
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
COMPOSITION |
|
|
|
|
|
|
|
Percentage Change |
|
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
5,764,009 |
|
|
$ |
6,176,998 |
|
|
$ |
6,494,852 |
|
|
(6.7 |
)% |
|
(11.3 |
)% |
Interest-bearing checking |
|
|
1,794,477 |
|
|
|
1,811,153 |
|
|
|
1,971,936 |
|
|
(0.9 |
)% |
|
(9.0 |
)% |
Regular savings accounts |
|
|
2,502,084 |
|
|
|
2,710,090 |
|
|
|
2,853,891 |
|
|
(7.7 |
)% |
|
(12.3 |
)% |
Money market accounts |
|
|
2,143,700 |
|
|
|
2,198,288 |
|
|
|
2,402,731 |
|
|
(2.5 |
)% |
|
(10.8 |
)% |
Total interest-bearing transaction and savings accounts |
|
|
6,440,261 |
|
|
|
6,719,531 |
|
|
|
7,228,558 |
|
|
(4.2 |
)% |
|
(10.9 |
)% |
Total core deposits |
|
|
12,204,270 |
|
|
|
12,896,529 |
|
|
|
13,723,410 |
|
|
(5.4 |
)% |
|
(11.1 |
)% |
Interest-bearing
certificates |
|
|
949,932 |
|
|
|
723,530 |
|
|
|
800,364 |
|
|
31.3 |
% |
|
18.7 |
% |
Total deposits |
|
$ |
13,154,202 |
|
|
$ |
13,620,059 |
|
|
$ |
14,523,774 |
|
|
(3.4 |
)% |
|
(9.4 |
)% |
GEOGRAPHIC CONCENTRATION OF DEPOSITS |
|
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
|
Percentage Change |
|
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Prior Qtr |
|
Prior Yr Qtr |
Washington |
|
$ |
7,237,499 |
|
|
55.0 |
% |
|
$ |
7,563,056 |
|
|
$ |
8,067,253 |
|
|
(4.3)% |
|
(10.3)% |
Oregon |
|
|
2,911,788 |
|
|
22.1 |
% |
|
|
2,998,572 |
|
|
|
3,140,393 |
|
|
(2.9)% |
|
(7.3)% |
California |
|
|
2,309,174 |
|
|
17.6 |
% |
|
|
2,331,524 |
|
|
|
2,520,655 |
|
|
(1.0)% |
|
(8.4)% |
Idaho |
|
|
695,741 |
|
|
5.3 |
% |
|
|
726,907 |
|
|
|
795,473 |
|
|
(4.3)% |
|
(12.5)% |
Total deposits |
|
$ |
13,154,202 |
|
|
100.0 |
% |
|
$ |
13,620,059 |
|
|
$ |
14,523,774 |
|
|
(3.4)% |
|
(9.4)% |
INCLUDED IN TOTAL
DEPOSITS |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Public non-interest-bearing accounts |
|
$ |
177,913 |
|
|
$ |
212,533 |
|
|
$ |
189,907 |
|
Public interest-bearing
transaction & savings accounts |
|
|
183,924 |
|
|
|
180,326 |
|
|
|
165,692 |
|
Public interest-bearing
certificates |
|
|
26,857 |
|
|
|
26,810 |
|
|
|
37,689 |
|
Total public deposits |
|
$ |
388,694 |
|
|
$ |
419,669 |
|
|
$ |
393,288 |
|
Collateralized public
deposits |
|
$ |
277,725 |
|
|
$ |
304,244 |
|
|
$ |
285,015 |
|
|
|
|
|
|
|
|
AVERAGE ACCOUNT
BALANCE PER DEPOSIT ACCOUNT |
|
|
|
|
|
|
Number of deposit
accounts |
|
|
462,880 |
|
|
$ |
471,140 |
|
|
$ |
502,624 |
|
Average account balance per
account |
|
$ |
28 |
|
|
$ |
29 |
|
|
$ |
29 |
|
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
ESTIMATED REGULATORY
CAPITAL RATIOS AS OF MARCH 31, 2023 |
|
Actual |
|
Minimum to be categorized as "Adequately
Capitalized" |
|
Minimum to becategorized
as"Well Capitalized" |
|
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
Banner
Corporation-consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
$ |
1,805,467 |
|
|
14.45 |
% |
|
$ |
999,704 |
|
|
8.00 |
% |
|
$ |
1,249,630 |
|
|
10.00 |
% |
Tier 1 capital to risk-weighted assets |
|
|
1,560,998 |
|
|
12.49 |
% |
|
|
749,778 |
|
|
6.00 |
% |
|
|
749,778 |
|
|
6.00 |
% |
Tier 1 leverage capital to average assets |
|
|
1,560,998 |
|
|
9.96 |
% |
|
|
626,769 |
|
|
4.00 |
% |
|
n/a |
|
n/a |
Common equity tier 1 capital to risk-weighted assets |
|
|
1,474,498 |
|
|
11.80 |
% |
|
|
562,334 |
|
|
4.50 |
% |
|
n/a |
|
n/a |
Banner Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
|
1,712,629 |
|
|
13.71 |
% |
|
|
999,052 |
|
|
8.00 |
% |
|
|
1,248,815 |
|
|
10.00 |
% |
Tier 1 capital to risk-weighted assets |
|
|
1,568,160 |
|
|
12.56 |
% |
|
|
749,289 |
|
|
6.00 |
% |
|
|
999,052 |
|
|
8.00 |
% |
Tier 1 leverage capital to average assets |
|
|
1,568,160 |
|
|
10.01 |
% |
|
|
626,336 |
|
|
4.00 |
% |
|
|
782,921 |
|
|
5.00 |
% |
Common equity tier 1 capital to risk-weighted assets |
|
|
1,568,160 |
|
|
12.56 |
% |
|
|
561,967 |
|
|
4.50 |
% |
|
|
811,730 |
|
|
6.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These regulatory
capital ratios are estimates, pending completion and filing of
Banner's regulatory reports. |
ADDITIONAL FINANCIAL INFORMATION |
(dollars in
thousands) |
(rates / ratios
annualized) |
ANALYSIS OF NET
INTEREST SPREAD |
Quarters Ended |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
|
Average Balance |
|
Interest and Dividends |
|
Yield / Cost(3) |
|
Average Balance |
|
Interest and Dividends |
|
Yield / Cost(3) |
|
Average Balance |
|
Interest and Dividends |
|
Yield / Cost(3) |
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for sale loans |
$ |
52,657 |
|
$ |
671 |
|
|
5.17 |
% |
|
$ |
45,654 |
|
$ |
527 |
|
|
4.58 |
% |
|
$ |
130,221 |
|
$ |
1,115 |
|
|
3.47 |
% |
Mortgage loans |
|
8,267,386 |
|
|
106,900 |
|
|
5.24 |
% |
|
|
8,175,281 |
|
|
103,478 |
|
|
5.02 |
% |
|
|
7,347,662 |
|
|
81,032 |
|
|
4.47 |
% |
Commercial/agricultural loans |
|
1,702,553 |
|
|
25,176 |
|
|
6.00 |
% |
|
|
1,742,517 |
|
|
24,727 |
|
|
5.63 |
% |
|
|
1,479,216 |
|
|
15,011 |
|
|
4.12 |
% |
SBA PPP loans |
|
6,792 |
|
|
50 |
|
|
2.99 |
% |
|
|
9,347 |
|
|
224 |
|
|
9.51 |
% |
|
|
88,720 |
|
|
2,784 |
|
|
12.73 |
% |
Consumer and other loans |
|
137,096 |
|
|
2,115 |
|
|
6.26 |
% |
|
|
140,801 |
|
|
2,125 |
|
|
5.99 |
% |
|
|
115,881 |
|
|
1,700 |
|
|
5.95 |
% |
Total loans(1) |
|
10,166,484 |
|
|
134,912 |
|
|
5.38 |
% |
|
|
10,113,600 |
|
|
131,081 |
|
|
5.14 |
% |
|
|
9,161,700 |
|
|
101,642 |
|
|
4.50 |
% |
Mortgage-backed securities |
|
3,093,860 |
|
|
19,123 |
|
|
2.51 |
% |
|
|
3,187,557 |
|
|
19,244 |
|
|
2.40 |
% |
|
|
2,975,263 |
|
|
14,235 |
|
|
1.94 |
% |
Other securities |
|
1,404,355 |
|
|
15,095 |
|
|
4.36 |
% |
|
|
1,628,553 |
|
|
15,945 |
|
|
3.88 |
% |
|
|
1,573,834 |
|
|
8,429 |
|
|
2.17 |
% |
Interest-bearing deposits with banks |
|
53,584 |
|
|
608 |
|
|
4.60 |
% |
|
|
245,538 |
|
|
2,126 |
|
|
3.44 |
% |
|
|
1,697,545 |
|
|
820 |
|
|
0.20 |
% |
FHLB stock |
|
14,236 |
|
|
90 |
|
|
2.56 |
% |
|
|
10,773 |
|
|
76 |
|
|
2.80 |
% |
|
|
11,756 |
|
|
106 |
|
|
3.66 |
% |
Total investment securities |
|
4,566,035 |
|
|
34,916 |
|
|
3.10 |
% |
|
|
5,072,421 |
|
|
37,391 |
|
|
2.92 |
% |
|
|
6,258,398 |
|
|
23,590 |
|
|
1.53 |
% |
Total interest-earning assets |
|
14,732,519 |
|
|
169,828 |
|
|
4.68 |
% |
|
|
15,186,021 |
|
|
168,472 |
|
|
4.40 |
% |
|
|
15,420,098 |
|
|
125,232 |
|
|
3.29 |
% |
Non-interest-earning
assets |
|
921,217 |
|
|
|
|
|
|
927,585 |
|
|
|
|
|
|
1,372,182 |
|
|
|
|
Total assets |
$ |
15,653,736 |
|
|
|
|
|
$ |
16,113,606 |
|
|
|
|
|
$ |
16,792,280 |
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
1,779,664 |
|
|
906 |
|
|
0.21 |
% |
|
$ |
1,818,907 |
|
|
566 |
|
|
0.12 |
% |
|
$ |
1,958,824 |
|
|
273 |
|
|
0.06 |
% |
Savings accounts |
|
2,615,173 |
|
|
1,884 |
|
|
0.29 |
% |
|
|
2,761,323 |
|
|
866 |
|
|
0.12 |
% |
|
|
2,816,774 |
|
|
354 |
|
|
0.05 |
% |
Money market accounts |
|
2,167,138 |
|
|
3,799 |
|
|
0.71 |
% |
|
|
2,256,867 |
|
|
1,337 |
|
|
0.24 |
% |
|
|
2,390,621 |
|
|
506 |
|
|
0.09 |
% |
Certificates of deposit |
|
810,821 |
|
|
2,655 |
|
|
1.33 |
% |
|
|
709,974 |
|
|
854 |
|
|
0.48 |
% |
|
|
825,028 |
|
|
953 |
|
|
0.47 |
% |
Total interest-bearing deposits |
|
7,372,796 |
|
|
9,244 |
|
|
0.51 |
% |
|
|
7,547,071 |
|
|
3,623 |
|
|
0.19 |
% |
|
|
7,991,247 |
|
|
2,086 |
|
|
0.11 |
% |
Non-interest-bearing deposits |
|
5,960,791 |
|
|
— |
|
|
— |
% |
|
|
6,402,297 |
|
|
— |
|
|
— |
% |
|
|
6,421,143 |
|
|
— |
|
|
— |
% |
Total deposits |
|
13,333,587 |
|
|
9,244 |
|
|
0.28 |
% |
|
|
13,949,368 |
|
|
3,623 |
|
|
0.10 |
% |
|
|
14,412,390 |
|
|
2,086 |
|
|
0.06 |
% |
Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
105,984 |
|
|
1,264 |
|
|
4.84 |
% |
|
|
19,337 |
|
|
198 |
|
|
4.06 |
% |
|
|
42,222 |
|
|
291 |
|
|
2.80 |
% |
Other borrowings |
|
229,459 |
|
|
381 |
|
|
0.67 |
% |
|
|
238,217 |
|
|
132 |
|
|
0.22 |
% |
|
|
266,148 |
|
|
84 |
|
|
0.13 |
% |
Junior subordinated debentures and subordinated notes |
|
189,178 |
|
|
2,760 |
|
|
5.92 |
% |
|
|
189,178 |
|
|
2,534 |
|
|
5.31 |
% |
|
|
191,985 |
|
|
1,776 |
|
|
3.75 |
% |
Total borrowings |
|
524,621 |
|
|
4,405 |
|
|
3.41 |
% |
|
|
446,732 |
|
|
2,864 |
|
|
2.54 |
% |
|
|
500,355 |
|
|
2,151 |
|
|
1.74 |
% |
Total funding liabilities |
|
13,858,208 |
|
|
13,649 |
|
|
0.40 |
% |
|
|
14,396,100 |
|
|
6,487 |
|
|
0.18 |
% |
|
|
14,912,745 |
|
|
4,237 |
|
|
0.12 |
% |
Other non-interest-bearing
liabilities(2) |
|
293,205 |
|
|
|
|
|
|
292,480 |
|
|
|
|
|
|
225,953 |
|
|
|
|
Total liabilities |
|
14,151,413 |
|
|
|
|
|
|
14,688,580 |
|
|
|
|
|
|
15,138,698 |
|
|
|
|
Shareholders’ equity |
|
1,502,323 |
|
|
|
|
|
|
1,425,026 |
|
|
|
|
|
|
1,653,582 |
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
15,653,736 |
|
|
|
|
|
$ |
16,113,606 |
|
|
|
|
|
$ |
16,792,280 |
|
|
|
|
Net interest income/rate
spread (tax equivalent) |
|
|
$ |
156,179 |
|
|
4.28 |
% |
|
|
|
$ |
161,985 |
|
|
4.22 |
% |
|
|
|
$ |
120,995 |
|
|
3.17 |
% |
Net interest margin (tax
equivalent) |
|
|
|
|
4.30 |
% |
|
|
|
|
|
4.23 |
% |
|
|
|
|
|
3.18 |
% |
Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for taxable
equivalent basis |
|
|
|
(2,867 |
) |
|
|
|
|
|
|
(2,914 |
) |
|
|
|
|
|
|
(2,341 |
) |
|
|
Net interest income and
margin, as reported |
|
|
$ |
153,312 |
|
|
4.22 |
% |
|
|
|
$ |
159,071 |
|
|
4.16 |
% |
|
|
|
$ |
118,654 |
|
|
3.12 |
% |
Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
|
|
1.44 |
% |
|
|
|
|
|
1.34 |
% |
|
|
|
|
|
1.06 |
% |
Return on average equity |
|
|
|
|
15.00 |
% |
|
|
|
|
|
15.14 |
% |
|
|
|
|
|
10.78 |
% |
Average equity/average
assets |
|
|
|
|
9.60 |
% |
|
|
|
|
|
8.84 |
% |
|
|
|
|
|
9.85 |
% |
Average interest-earning
assets/average interest-bearing liabilities |
|
|
|
|
186.55 |
% |
|
|
|
|
|
189.97 |
% |
|
|
|
|
|
181.59 |
% |
Average interest-earning
assets/average funding liabilities |
|
|
|
|
106.31 |
% |
|
|
|
|
|
105.49 |
% |
|
|
|
|
|
103.40 |
% |
Non-interest income/average
assets |
|
|
|
|
0.24 |
% |
|
|
|
|
|
0.32 |
% |
|
|
|
|
|
0.47 |
% |
Non-interest expense/average
assets |
|
|
|
|
2.45 |
% |
|
|
|
|
|
2.44 |
% |
|
|
|
|
|
2.20 |
% |
Efficiency ratio(4) |
|
|
|
|
58.20 |
% |
|
|
|
|
|
57.52 |
% |
|
|
|
|
|
66.04 |
% |
Adjusted efficiency
ratio(5) |
|
|
|
|
54.23 |
% |
|
|
|
|
|
54.43 |
% |
|
|
|
|
|
62.09 |
% |
(1) |
|
Average balances include loans accounted for on a nonaccrual basis
and accruing loans 90 days or more past due. Amortization of net
deferred loan fees/costs is included with interest on loans. |
(2) |
|
Average other
non-interest-bearing liabilities include fair value adjustments
related to junior subordinated debentures. |
(3) |
|
Tax-exempt income is calculated
on a tax equivalent basis. The tax equivalent yield adjustment to
interest earned on loans was $1.7 million, $1.6 million and $1.3
million for the quarters ended March 31, 2023, December 31,
2022 and March 31, 2022, respectively. The tax equivalent
yield adjustment to interest earned on tax exempt securities was
$1.2 million, $1.3 million and $1.0 million for the quarters ended
March 31, 2023, December 31, 2022 and March 31, 2022,
respectively. |
(4) |
|
Non-interest expense divided by
the total of net interest income and non-interest income. |
(5) |
|
Adjusted non-interest expense
divided by adjusted revenue. Represent non-GAAP financial measures.
See, “Additional Financial Information - Non-GAAP Financial
Measures” on the final two pages of this press release for a
discussion and reconciliation of non-GAAP financial measures. |
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP Financial
Measures |
|
|
|
|
|
In addition to results presented in accordance with generally
accepted accounting principles in the United States of America
(GAAP), this press release contains certain non-GAAP financial
measures. Tangible common shareholders’ equity per share and the
ratio of tangible common equity to tangible assets (both of which
exclude goodwill and other intangible assets, net), and references
to adjusted revenue (which excludes fair value adjustments and net
gain (loss) on the sale of securities from the total of net
interest income and total non-interest income) and the adjusted
efficiency ratio (which excludes Banner Forward expenses,
amortization of core deposit intangibles, real estate owned
operations, loss on extinguishment of debt and state/municipal
taxes from non-interest expense divided by adjusted revenue)
represent non-GAAP financial measures. Management has presented
these non-GAAP financial measures in this earnings release because
it believes that they provide useful and comparative information to
assess trends in Banner’s core operations reflected in the current
quarter’s results and facilitate the comparison of our performance
with the performance of our peers. However, these non-GAAP
financial measures are supplemental and are not a substitute for
any analysis based on GAAP. Where applicable, comparable earnings
information using GAAP financial measures is also presented.
Because not all companies use the same calculations, our
presentation may not be comparable to other similarly titled
measures as calculated by other companies. For a reconciliation of
these non-GAAP financial measures, see the tables below: |
|
|
|
|
|
|
ADJUSTED
REVENUE |
Quarters Ended |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Net interest income (GAAP) |
$ |
153,312 |
|
|
$ |
159,071 |
|
|
$ |
118,654 |
|
Non-interest income
(GAAP) |
|
9,277 |
|
|
|
13,070 |
|
|
|
19,427 |
|
Total revenue (GAAP) |
|
162,589 |
|
|
|
172,141 |
|
|
|
138,081 |
|
Exclude net loss (gain) on sale of securities |
|
7,252 |
|
|
|
3,721 |
|
|
|
(435 |
) |
Exclude net change in valuation of financial instruments carried at
fair value |
|
552 |
|
|
|
(157 |
) |
|
|
(49 |
) |
Adjusted revenue
(non-GAAP) |
$ |
170,393 |
|
|
$ |
175,705 |
|
|
$ |
137,597 |
|
ADJUSTED
EARNINGS |
Quarters Ended |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Net income (GAAP) |
$ |
55,555 |
|
|
$ |
54,380 |
|
|
$ |
43,963 |
|
Exclude net loss (gain) on sale of securities |
|
7,252 |
|
|
|
3,721 |
|
|
|
(435 |
) |
Exclude net change in valuation of financial instruments carried at
fair value |
|
552 |
|
|
|
(157 |
) |
|
|
(49 |
) |
Exclude Banner Forward expenses |
|
143 |
|
|
|
838 |
|
|
|
2,465 |
|
Exclude loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
793 |
|
Exclude related net tax (benefit) expense |
|
(1,907 |
) |
|
|
(1,057 |
) |
|
|
(666 |
) |
Total adjusted earnings
(non-GAAP) |
$ |
61,595 |
|
|
$ |
57,725 |
|
|
$ |
46,071 |
|
|
|
|
|
|
|
Diluted earnings per share
(GAAP) |
$ |
1.61 |
|
|
$ |
1.58 |
|
|
$ |
1.27 |
|
Diluted adjusted earnings per
share (non-GAAP) |
$ |
1.79 |
|
|
$ |
1.68 |
|
|
$ |
1.33 |
|
ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
ADJUSTED EFFICIENCY
RATIO |
|
Quarters Ended |
|
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Non-interest expense (GAAP) |
|
$ |
94,621 |
|
|
$ |
99,013 |
|
|
$ |
91,195 |
|
Exclude Banner Forward expenses |
|
|
(143 |
) |
|
|
(838 |
) |
|
|
(2,465 |
) |
Exclude CDI amortization |
|
|
(1,050 |
) |
|
|
(1,215 |
) |
|
|
(1,424 |
) |
Exclude state/municipal tax expense |
|
|
(1,300 |
) |
|
|
(1,304 |
) |
|
|
(1,162 |
) |
Exclude REO operations |
|
|
277 |
|
|
|
(28 |
) |
|
|
79 |
|
Exclude loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(793 |
) |
Adjusted non-interest expense
(non-GAAP) |
|
$ |
92,405 |
|
|
$ |
95,628 |
|
|
$ |
85,430 |
|
|
|
|
|
|
|
|
Net interest income
(GAAP) |
|
$ |
153,312 |
|
|
$ |
159,071 |
|
|
$ |
118,654 |
|
Non-interest income
(GAAP) |
|
|
9,277 |
|
|
|
13,070 |
|
|
|
19,427 |
|
Total revenue (GAAP) |
|
|
162,589 |
|
|
|
172,141 |
|
|
|
138,081 |
|
Exclude net loss (gain) on sale of securities |
|
|
7,252 |
|
|
|
3,721 |
|
|
|
(435 |
) |
Exclude net change in valuation of financial instruments carried at
fair value |
|
|
552 |
|
|
|
(157 |
) |
|
|
(49 |
) |
Adjusted revenue
(non-GAAP) |
|
$ |
170,393 |
|
|
$ |
175,705 |
|
|
$ |
137,597 |
|
|
|
|
|
|
|
|
Efficiency ratio (GAAP) |
|
|
58.20 |
% |
|
|
57.52 |
% |
|
|
66.04 |
% |
Adjusted efficiency ratio
(non-GAAP) |
|
|
54.23 |
% |
|
|
54.43 |
% |
|
|
62.09 |
% |
TANGIBLE COMMON
SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Shareholders’ equity (GAAP) |
|
$ |
1,531,695 |
|
|
$ |
1,456,432 |
|
|
$ |
1,563,780 |
|
Exclude goodwill and other intangible assets, net |
|
|
381,511 |
|
|
|
382,561 |
|
|
|
386,552 |
|
Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,150,184 |
|
|
$ |
1,073,871 |
|
|
$ |
1,177,228 |
|
|
|
|
|
|
|
|
Total assets (GAAP) |
|
$ |
15,533,603 |
|
|
$ |
15,833,431 |
|
|
$ |
16,776,171 |
|
Exclude goodwill and other intangible assets, net |
|
|
381,511 |
|
|
|
382,561 |
|
|
|
386,552 |
|
Total tangible assets
(non-GAAP) |
|
$ |
15,152,092 |
|
|
$ |
15,450,870 |
|
|
$ |
16,389,619 |
|
Common shareholders’ equity to
total assets (GAAP) |
|
|
9.86 |
% |
|
|
9.20 |
% |
|
|
9.32 |
% |
Tangible common shareholders’
equity to tangible assets (non-GAAP) |
|
|
7.59 |
% |
|
|
6.95 |
% |
|
|
7.18 |
% |
|
|
|
|
|
|
|
TANGIBLE COMMON
SHAREHOLDERS’ EQUITY PER SHARE |
|
|
|
|
|
|
Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,150,184 |
|
|
$ |
1,073,871 |
|
|
$ |
1,177,228 |
|
Common shares outstanding at
end of period |
|
|
34,308,540 |
|
|
|
34,194,018 |
|
|
|
34,372,784 |
|
Common shareholders’ equity
(book value) per share (GAAP) |
|
$ |
44.64 |
|
|
$ |
42.59 |
|
|
$ |
45.49 |
|
Tangible common shareholders’
equity (tangible book value) per share (non-GAAP) |
|
$ |
33.52 |
|
|
$ |
31.41 |
|
|
$ |
34.25 |
|
CONTACT: |
|
MARK J. GRESCOVICH, |
|
|
PRESIDENT & CEO |
|
|
PETER J. CONNER, CFO |
|
|
(509) 527-3636 |
Grafico Azioni Banner (NASDAQ:BANR)
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Da Apr 2024 a Mag 2024
Grafico Azioni Banner (NASDAQ:BANR)
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Da Mag 2023 a Mag 2024