Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent
company of Banner Bank, today reported net income of $54.4 million,
or $1.56 per diluted share, for the second quarter of 2021, a 16%
increase compared to $46.9 million, or $1.33 per diluted share, for
the preceding quarter and a 131% increase compared to $23.5
million, or $0.67 per diluted share, for the second quarter of
2020. Banner’s second quarter 2021 results include $10.3 million in
recapture of provision for credit losses, compared to $28.6 million
in provision for credit losses in the second quarter of 2020. The
second quarter 2020 provision for credit losses was primarily the
result of the impact of the COVID-19 pandemic. In the first six
months of 2021, net income was $101.2 million, or $2.88 per diluted
share, compared to net income of $40.4 million, or $1.14 per
diluted share for the same period a year earlier. Banner’s first
six months of 2021 results include $19.5 million in recapture of
provision for credit losses, compared to $52.1 million in provision
for credit losses in the first six months of 2020.
Banner announced that its Board of Directors
declared a regular quarterly cash dividend of $0.41 per share. The
dividend will be payable August 13, 2021, to common shareholders of
record on August 3, 2021.
“Banner’s second quarter 2021 performance
continues to demonstrate the success of our super community bank
model, even with the challenges of the COVID-19 pandemic,” said
Mark Grescovich, President and CEO. “We benefited from continued
core deposit growth and an acceleration of PPP loan fee income as a
result of SBA PPP loan forgiveness. The unprecedented level of
market liquidity along with proceeds from new PPP loan
originations, and our continued focus on building client
relationships contributed to our core deposits increasing 16%
compared to June 30, 2020.”
“Due to the ongoing improvement in forecasted
economic conditions in our markets, coupled with continued
reductions in our adversely classified loans, we recorded a $10.3
million recapture to our provision for credit losses during the
current quarter. This compares to a $9.3 million recapture to our
provision for credit losses during the preceding quarter and a
$28.6 million provision for credit losses in the second quarter a
year ago. Our allowance for credit losses - loans remains strong at
1.53% of total loans and 481% of non-performing loans at
June 30, 2021, compared to 1.57% of total loans and 426% of
non-performing loans at March 31, 2021,” said Grescovich. “Banner
has provided PPP loans totaling nearly $1.61 billion to 13,922
businesses as of June 30, 2021, and as of quarter end, we had
received SBA forgiveness for 6,707 PPP loans totaling
$822.3 million. Our essential onsite employees, such as those
working in our branches, continue to serve clients in person. In
addition, as a result of the accelerated distribution of the
COVID-19 vaccine over the past several months and the progress made
toward fully reopening businesses in the states we serve, we began
to normalize our operations by returning additional groups of
employees back to Bank worksites in July 2021.”
At June 30, 2021, Banner Corporation had
$16.18 billion in assets, $9.51 billion in net loans and $13.64
billion in deposits. Banner operates 155 branch offices, including
branches located in eight of the top 20 largest western
Metropolitan Statistical Areas by population.
Second Quarter 2021
Highlights
- Revenues increased 6% to $149.9
million, compared to $141.9 million in the preceding quarter, and
increased 2% when compared to $147.3 million in the second quarter
a year ago.
- Net interest income, before the
recapture of provision for credit losses, increased to $127.6
million in the second quarter of 2021, compared to $117.7 million
in the preceding quarter and $119.6 million in the second quarter a
year ago.
- Net interest margin on a tax
equivalent basis was 3.52%, compared to 3.44% in the preceding
quarter and 3.87% in the second quarter a year ago.
- Mortgage banking revenues decreased
35% to $7.5 million, compared to $11.4 million in the preceding
quarter, and decreased 47% compared to $14.1 million in the second
quarter a year ago.
- Return on average assets was 1.36%,
compared to 1.24% in the preceding quarter and 0.68% in the second
quarter a year ago.
- Net loans receivable decreased to
$9.51 billion at June 30, 2021, compared to $9.79 billion at
March 31, 2021, and decreased 6% when compared to $10.13 billion at
June 30, 2020.
- Non-performing assets decreased to
$31.5 million, or 0.19% of total assets, at June 30, 2021,
compared to $37.0 million, or 0.23% of total assets in the
preceding quarter, and decreased from $39.9 million, or 0.28% of
total assets, at June 30, 2020.
- The allowance for credit losses -
loans was $148.0 million, or 1.53% of total loans receivable, as of
June 30, 2021, compared to $156.1 million, or 1.57% of total
loans receivable as of March 31, 2021 and $156.4 million or 1.52%
of total loans receivable as of June 30, 2020.
- Core deposits (non-interest-bearing
and interest-bearing transaction and savings accounts) increased 1%
to $12.76 billion at June 30, 2021, compared to $12.64 billion
at March 31, 2021, and increased 16% compared to $10.97 billion a
year ago. Core deposits represented 94% of total deposits at
June 30, 2021.
- Dividends to shareholders were
$0.41 per share in the quarter ended June 30, 2021.
- Common shareholders’ equity per
share increased 4% to $48.31 at June 30, 2021, compared to
$46.60 at the preceding quarter end, and increased 5% from $46.22 a
year ago.
- Tangible common shareholders’
equity per share* increased 5% to $36.99 at June 30, 2021,
compared to $35.29 at the preceding quarter end, and increased 6%
from $34.89 a year ago.
- Banner repurchased 250,000 shares
of its common stock during the quarter at an average cost of $58.22
per share.
*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 non-interest income) and the
adjusted efficiency ratio (which excludes merger and
acquisition-related expenses, COVID-19 expenses, amortization of
core deposit intangibles, real estate owned operations and
state/municipal taxes from non-interest expense divided by adjusted
revenue) represent non-GAAP (Generally Accepted Accounting
Principles) 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. Where applicable, comparable
earnings information using GAAP financial measures is also
presented. See also Non-GAAP Financial Measures reconciliation
tables on the last two pages of this press release.
Income Statement Review
Net interest income, before the recapture of
provision for credit losses, was $127.6 million in the second
quarter of 2021, compared to $117.7 million in the preceding
quarter and $119.6 million in the second quarter a year ago.
Banner’s net interest margin on a tax equivalent
basis was 3.52% for the second quarter of 2021, an eight
basis-point increase compared to 3.44% in the preceding quarter and
a 35 basis-point decrease compared to 3.87% in the second quarter a
year ago.
“Interest income was higher, primarily as a
result of the decline in low yielding PPP loans and a corresponding
acceleration of deferred loan fee income due to loan repayments
from SBA loan forgiveness, which positively affected our net
interest margin during the quarter. Net interest margin was also
impacted by the growth in core deposit balances, resulting in our
deploying excess liquidity into low yielding short term
investments,” said Grescovich. “Additionally, the on-going low
interest rate environment continues to put downward pressure on
loan yields.” Acquisition accounting adjustments added three basis
points to the net interest margin in the current quarter, five
basis points in the preceding quarter and seven basis points in the
second quarter a year ago. The total purchase discount for acquired
loans was $12.5 million at June 30, 2021, compared to $13.9
million at March 31, 2021, and $20.2 million at June 30, 2020.
In the first six months of 2021, Banner’s net interest margin on a
tax equivalent basis was 3.48% compared to 4.05% in the first six
months of 2020.
Average interest-earning asset yields increased
four basis points to 3.68% in the second quarter compared to 3.64%
for the preceding quarter and decreased 48 basis points compared to
4.16% in the second quarter a year ago. Average loan yields
increased 27 basis points to 4.70% compared to 4.43% in the
preceding quarter and increased 13 basis points compared to 4.57%
in the second quarter a year ago. The increase in average loan
yields during the current quarter compared to the preceding quarter
was primarily the result of the decline in low yielding SBA PPP
loans due to loan repayments from SBA loan forgiveness during the
quarter, partially offset by lower rates on new originations and
adjustable-rate loans resetting to lower current market rates. Loan
discount accretion added five basis points to average loan yields
in the second quarter of 2021, seven basis points in the preceding
quarter and eight basis points in the second quarter a year ago.
Deposit costs were 0.09% in the second quarter of 2021, a two
basis-point decrease compared to the preceding quarter and a 14
basis-point decrease compared to the second quarter a year ago. The
year-over-year decrease in quarterly deposit costs was primarily
the result of decreases in market interest rates during 2020. The
total cost of funds was 0.17% during the second quarter of 2021, a
four basis-point decrease compared to the preceding quarter and a
14 basis-point decrease compared to the second quarter a year
ago.
Banner recorded a $10.3 million recapture of
provision for credit losses in the current quarter (comprised of an
$8.1 million recapture credit losses - loans and a $2.2 million
recapture unfunded loan commitments). This recapture compares to a
$9.3 million recapture of provision for credit losses in the prior
quarter (comprised of an $8.0 million recapture credit losses -
loans and $1.2 million recapture unfunded loan commitments) and a
$28.6 million provision for credit losses in the second quarter a
year ago (comprised of a $29.5 million provision for credit losses
- loans and a $905,000 recapture unfunded loan commitments). The
recapture of provision for credit losses for the current quarter
primarily reflects improvement in forecasted economic indicators
and a decrease in adversely classified loans since the preceding
quarter end, while the recapture of the provision for credit losses
recorded in the preceding quarter primarily reflected a decrease in
loan balances, excluding PPP loans, as well as improvement in the
forecasted economic indicators. The provision for credit losses
recorded in the second quarter a year ago primarily reflected
expected lifetime credit losses based upon the economic conditions
and the potential effects from forecasted deterioration of economic
metrics due to the COVID-19 pandemic based on the outlook as of
June 30, 2020.
Total non-interest income was $22.3 million in
the second quarter of 2021, compared to $24.3 million in the
preceding quarter and $27.7 million in the second quarter a year
ago. Deposit fees and other service charges were $9.8 million in
the second quarter of 2021, compared to $8.9 million in the
preceding quarter and $7.5 million in the second quarter a year
ago. The increase in deposit fees and other service charges from
the second quarter a year ago is primarily a result of increased
transaction deposit account activity. Mortgage banking revenues,
including gains on one- to four-family and multifamily loan sales
and loan servicing fees, decreased to $7.5 million in the second
quarter, compared to $11.4 million in the preceding quarter and
$14.1 million in the second quarter of 2020. The lower mortgage
banking revenue quarter-over-quarter primarily reflects a decrease
in the gain on sale margin on one- to four-family held-for-sale
loans and a reduction in the volume of one- to four-family loans
sold reflecting a decrease in refinance activity. The decrease
compared to the second quarter of 2020 was primarily due to a
decrease in the gain on sale margin on one- to four-family
held-for-sale loans, partially offset by higher gains on the sale
of multifamily held-for-sale loans. Home purchase activity
accounted for 66% of one- to four-family mortgage loan originations
in the second quarter of 2021, compared to 54% in the prior quarter
and 42% in the second quarter of 2020. In the first six months of
2021, total non-interest income decreased 1% to $46.6 million,
compared to $46.9 million in the first six months of 2020.
Banner’s second quarter 2021 results included a
$58,000 net gain 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 a $77,000 net gain on the sale of securities. In the
preceding quarter, results included a $59,000 net gain for fair
value adjustments and a $485,000 net gain on the sale of
securities. In the second quarter a year ago, results included a
$2.2 million net gain for fair value adjustments and a $93,000 net
gain on the sale of securities.
Total revenue increased 6% to $149.9 million for
the second quarter of 2021, compared to $141.9 million in the
preceding quarter, and increased 2% compared to $147.3 million in
the second quarter a year ago. Year-to-date, total revenues
increased 2% to $291.8 million compared to $285.7 million for the
same period one year earlier. 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 $149.8 million in the
second quarter of 2021, compared to $141.4 million in the preceding
quarter and $145.0 million in the second quarter of 2020. In the
first six months of the year, adjusted revenue* was $291.1 million,
compared to $287.9 million in the first six months of 2020.
Total non-interest expense was $92.6 million in
the second quarter of 2021, compared to $93.5 million in the
preceding quarter and $90.5 million in the second quarter of 2020.
The decrease in non-interest expense for the current quarter
compared to the prior quarter primarily reflects a $2.9 million
decrease in salary and employee benefits expense as the prior
quarter included $1.3 million of severance expense related to
a reduction in staffing and a $1.2 million adjustment recorded
to increase the liability related to deferred compensation plans.
These decreases in salary and employee benefits expense for the
current quarter were partially offset by a $1.0 million increase in
professional and legal expenses. The year-over-year quarterly
increase in non-interest expense also reflects decreased
capitalized loan origination costs, primarily related to the
decline in the origination of PPP loans during the current quarter
compared to the same quarter a year ago as well as increases in
professional and legal expenses and miscellaneous non-interest
expense. The year-over-year quarterly increases in non-interest
expense were partially offset by decreases in salary and employee
benefits and COVID-19 expenses. Merger and acquisition-related
expenses were $79,000 for the second quarter of 2021, compared to
$571,000 for the preceding quarter and $336,000 in the second
quarter a year ago. COVID-19 expenses were $117,000 for the second
quarter of 2021, compared to $148,000 for the preceding quarter and
$2.2 million in the second quarter a year ago. Year-to-date, total
non-interest expense was $186.2 million, compared to $184.0 million
in the same period a year earlier. Banner’s efficiency ratio was
61.79% for the current quarter, compared to 65.90% in the preceding
quarter and 61.47% in the year ago quarter. Banner’s adjusted
efficiency ratio* was 59.77% for the current quarter, compared to
63.85% in the preceding quarter and 58.58% in the year ago
quarter.
For the second quarter of 2021, Banner had $13.1
million in state and federal income tax expense for an effective
tax rate of 19.5%, reflecting the benefits from tax exempt income.
Banner’s statutory income tax rate is 23.7%, 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 increased to $16.18 billion at
June 30, 2021, compared to $16.12 billion at March 31, 2021,
and increased 12% when compared to $14.41 billion at June 30,
2020. The total of securities and interest-bearing deposits held at
other banks was $5.19 billion at June 30, 2021, compared to
$4.81 billion at March 31, 2021 and $2.30 billion at June 30,
2020. The average effective duration of Banner's securities
portfolio was approximately 4.6 years at June 30, 2021,
compared to 4.0 years at June 30, 2020.
Net loans receivable decreased 3% to $9.51
billion at June 30, 2021, compared to $9.79 billion at March
31, 2021, and decreased 6% when compared to $10.13 billion at
June 30, 2020. The decrease in net loans compared to the prior
quarter primarily reflects the forgiveness of SBA PPP loans,
partially offset by increases in commercial real estate,
multifamily real estate and construction loans. Commercial real
estate and multifamily real estate loans increased 2% to $4.14
billion at June 30, 2021, compared to $4.05 billion at March
31, 2021, and increased 1% compared to $4.11 billion a year ago.
Commercial business loans decreased 14% to $2.68 billion at
June 30, 2021 compared to $3.09 billion at March 31, 2021, and
decreased 15% compared to $3.15 billion a year ago, primarily due
to PPP loans forgiven. Agricultural business loans increased to
$265.4 million at June 30, 2021, compared to $262.4 million
three months earlier and decreased from $328.1 million a year ago.
Total construction, land and land development loans were $1.37
billion at June 30, 2021, a 4% increase from $1.31 billion at
March 31, 2021, and an 11% increase compared to $1.24 billion a
year earlier. Consumer loans decreased to $560.7 million at
June 30, 2021, compared to $570.7 million at March 31, 2021,
and $642.4 million a year ago. One- to four-family loans decreased
to $637.7 million at June 30, 2021, primarily reflecting held
for investment loans being refinanced and sold as held for sale
loans, compared to $655.6 million at March 31, 2021, and $817.8
million a year ago.
Loans held for sale were $71.7 million at
June 30, 2021, compared to $135.3 million at March 31, 2021,
and $258.7 million at June 30, 2020. The volume of one- to
four- family residential mortgage loans sold was
$266.7 million in the current quarter, compared to
$300.3 million in the preceding quarter and
$292.4 million in the second quarter a year ago. During the
second quarter of 2021, Banner sold $83.9 million in
multifamily loans, compared to $107.7 million in the preceding
quarter and $3.1 million in the second quarter a year ago.
Total deposits increased 1% to $13.64 billion at
June 30, 2021, compared to $13.55 billion at March 31, 2021,
and increased 13% when compared to $12.02 billion a year ago. The
year-over-year increase in total deposits was due primarily to SBA
PPP loan funds deposited into client accounts and an increase in
general client liquidity due to reduced business investment and
consumer spending during the COVID-19 pandemic.
Non-interest-bearing account balances increased 2% to $6.09 billion
at June 30, 2021, compared to $5.99 billion at March 31, 2021,
and increased 15% compared to $5.28 billion a year ago. Core
deposits increased 1% to 94% of total deposits at June 30,
2021, compared to 93% of total deposits at March 31, 2021 and
increased 16% compared to a year ago. Certificates of deposit
decreased to $873.0 million at June 30, 2021, compared to
$907.0 million at March 31, 2021, and decreased 16% compared to
$1.04 billion a year earlier. Banner had no brokered deposits at
June 30, 2021 or March 31, 2021, compared to $119.4 million a
year ago. FHLB borrowings totaled $100.0 million at both
June 30, 2021 and March 31, 2021, compared to $150.0 million a
year ago.
At June 30, 2021, total common
shareholders’ equity was $1.67 billion, or 10.32% of assets,
compared to $1.62 billion or 10.04% of assets at March 31, 2021,
and $1.63 billion or 11.28% of assets a year ago. At June 30,
2021, tangible common shareholders’ equity*, which excludes
goodwill and other intangible assets, net, was $1.28 billion, or
8.09% of tangible assets*, compared to $1.23 billion, or 7.80% of
tangible assets, at March 31, 2021, and $1.23 billion, or 8.76% of
tangible assets, a year ago. Banner’s tangible book value per
share* increased to $36.99 at June 30, 2021, compared to
$34.89 per share a year ago.
Banner and its subsidiary bank continue to
maintain capital levels in excess of the requirements to be
categorized as “well-capitalized.” At June 30, 2021, Banner's
common equity Tier 1 capital ratio was 11.21%, its Tier 1 leverage
capital to average assets ratio was 8.86%, and its total capital to
risk-weighted assets ratio was 14.62%.
Credit Quality
The allowance for credit losses - loans was
$148.0 million at June 30, 2021, or 1.53% of total loans
receivable outstanding and 481% of non-performing loans, compared
to $156.1 million at March 31, 2021, or 1.57% of total loans
receivable outstanding and 426% of non-performing loans, and $156.4
million at June 30, 2020, or 1.52% of total loans receivable
outstanding and 418% of non-performing loans. In addition to the
allowance for credit losses - loans, Banner maintains an allowance
for credit losses - unfunded loan commitments, which was $9.9
million at June 30, 2021, compared to $12.1 million at March
31, 2021 and $10.6 million at June 30, 2020. Net loan
recoveries totaled $55,000 in the second quarter of 2021, compared
to net loan charge-offs of $3.2 million in the preceding quarter
and $3.7 million of net loan charge-offs in the second quarter a
year ago. Banner recorded a $10.3 million recapture of provision
for credit losses in the current quarter, compared to a $9.3
million recapture of provision for credit losses in the prior
quarter and a $28.6 million provision for loan losses in the year
ago quarter. The recapture of provision for credit losses for the
current quarter primarily reflects an improvement in the forecasted
economic indicators and a decrease in adversely classified loans,
while the recapture of the provision for credit losses recorded in
the preceding quarter primarily reflected the decrease in loan
balances, excluding the increase in PPP loans, as well as
improvement in the forecasted economic indicators. The provision
for credit losses recorded in the second quarter a year ago
reflected deterioration as a result of the COVID-19 pandemic in the
economic indicators utilized to forecast credit losses.
Non-performing loans were $30.8 million at June 30, 2021,
compared to $36.6 million at March 31, 2021, and $37.4 million a
year ago. Real estate owned and other repossessed assets were
$780,000 at June 30, 2021, compared to $377,000 at March 31,
2021, and $2.4 million a year ago.
In accordance with acquisition accounting, loans
acquired from acquisitions were recorded at their estimated fair
value, which resulted in a net purchase discount to the loans’
contractual amounts, a portion of which reflects a discount for
possible credit losses. Credit discounts were included in the
determination of fair value, and as a result, no allowance for
credit losses was recorded for loans acquired from acquisitions
prior to January 1, 2020. At June 30, 2021, the total purchase
discount for acquired loans was $12.5 million.
Banner’s total substandard loans were $272.8
million at June 30, 2021, compared to $311.6 million at March
31, 2021, and $359.8 million a year ago. The quarter over quarter
decrease reflects the payoff of substandard loans as well as risk
rating upgrades as certain industries impacted by the COVID-19
pandemic have begun to stabilize.
Banner’s total non-performing assets were $31.5
million, or 0.19% of total assets, at June 30, 2021, compared
to $37.0 million, or 0.23% of total assets, at March 31, 2021, and
$39.9 million, or 0.28% of total assets, a year ago.
At June 30, 2021, Banner had 71 loans totaling
$28.5 million remaining on loan payment deferral due to
COVID-19 including 62 mortgage loans totaling $20.2 million
operating under forbearance agreements. Since these loans were
performing loans that were current on their payments prior to the
COVID-19 pandemic, these modifications are not considered to be
troubled debt restructurings pursuant to applicable accounting and
regulatory guidance.
Conference Call
Banner will host a conference call on Thursday,
July 22, 2021, at 8:00 a.m. PDT, to discuss its second quarter
results. To listen to the call on-line, go to www.bannerbank.com.
Investment professionals are invited to dial (866) 235-9915 to
participate in the call. A replay will be available for one week at
(877) 344-7529 using access code 10157551, or at
www.bannerbank.com.
About the Company
Banner Corporation is a $16.18 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.
The COVID-19, pandemic is adversely affecting
us, our clients, counterparties, employees, and third-party service
providers, and the ultimate extent of the impacts on our business,
financial position, results of operations, liquidity, and prospects
is uncertain. Deterioration in general business and economic
conditions, including increases in unemployment rates, or
turbulence in domestic or global financial markets could adversely
affect our revenues and the values of our assets and liabilities,
reduce the availability of funding, lead to a tightening of credit,
and increase stock price volatility. In addition, changes to
statutes, regulations, or regulatory policies or practices as a
result of, or in response to COVID-19, could affect us in
substantial and unpredictable ways. Other factors that could cause
actual results to differ materially from the results anticipated or
projected include, but are not limited to, the following: (1) 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; (2) 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; (3)
competitive pressures among depository institutions; (4) interest
rate movements and their impact on client behavior and net interest
margin; (5) the impact of repricing and competitors’ pricing
initiatives on loan and deposit products; (6) fluctuations in real
estate values; (7) the ability to adapt successfully to
technological changes to meet clients’ needs and developments in
the market place; (8) the ability to access cost-effective funding;
(9) changes in financial markets; (10) changes in economic
conditions in general and in Washington, Idaho, Oregon and
California in particular; (11) the costs, effects and outcomes of
litigation; (12) legislation or regulatory changes, including but
not limited to the impact of the Dodd-Frank Act and regulations
adopted thereunder, changes in regulatory capital requirements
pursuant to the implementation of the Basel III capital standards,
other governmental initiatives affecting the financial services
industry and changes in federal and/or state tax laws or
interpretations thereof by taxing authorities; (13) changes in
accounting principles, policies or guidelines; (14) future
acquisitions by Banner of other depository institutions or lines of
business; (15) future goodwill impairment due to changes in
Banner’s business, changes in market conditions, including as a
result of the COVID-19 pandemic or other factors; and (16) other
economic, competitive, governmental, regulatory, and technological
factors affecting our operations, pricing, products and services;
and other risks detailed from time to time in our filings with the
Securities and Exchange Commission including our Quarterly Reports
on Form 10-Q and our Annual Reports on Form 10-K.
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| RESULTS OF
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Quarters Ended |
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Six Months Ended |
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Jun 30, 2021 |
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Mar 31, 2021 |
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Jun 30, 2020 |
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Jun 30, 2021 |
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Jun 30, 2020 |
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|
| INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable |
|
$ |
115,391 |
|
|
|
$ |
108,924 |
|
|
|
$ |
115,173 |
|
|
|
$ |
224,315 |
|
|
|
$ |
234,099 |
|
|
|
Mortgage-backed securities |
|
11,437 |
|
|
|
9,371 |
|
|
|
7,983 |
|
|
|
20,808 |
|
|
|
17,120 |
|
|
|
Securities and cash equivalents |
|
6,737 |
|
|
|
6,226 |
|
|
|
5,591 |
|
|
|
12,963 |
|
|
|
9,193 |
|
|
| |
|
133,565 |
|
|
|
124,521 |
|
|
|
128,747 |
|
|
|
258,086 |
|
|
|
260,412 |
|
|
| INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
3,028 |
|
|
|
3,609 |
|
|
|
6,694 |
|
|
|
6,637 |
|
|
|
15,444 |
|
|
|
Federal Home Loan Bank advances |
|
655 |
|
|
|
934 |
|
|
|
984 |
|
|
|
1,589 |
|
|
|
3,048 |
|
|
|
Other borrowings |
|
124 |
|
|
|
109 |
|
|
|
238 |
|
|
|
233 |
|
|
|
354 |
|
|
|
Junior subordinated debentures and subordinated notes |
|
2,204 |
|
|
|
2,208 |
|
|
|
1,251 |
|
|
|
4,412 |
|
|
|
2,728 |
|
|
| |
|
6,011 |
|
|
|
6,860 |
|
|
|
9,167 |
|
|
|
12,871 |
|
|
|
21,574 |
|
|
|
Net interest income |
|
127,554 |
|
|
|
117,661 |
|
|
|
119,580 |
|
|
|
245,215 |
|
|
|
238,838 |
|
|
| (RECAPTURE)/PROVISION
FOR CREDIT LOSSES |
|
(10,256 |
) |
|
|
(9,251 |
) |
|
|
28,623 |
|
|
|
(19,507 |
) |
|
|
52,093 |
|
|
|
Net interest income after (recapture)/provision for credit
losses |
|
137,810 |
|
|
|
126,912 |
|
|
|
90,957 |
|
|
|
264,722 |
|
|
|
186,745 |
|
|
| NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Deposit fees and other service charges |
|
9,758 |
|
|
|
8,939 |
|
|
|
7,546 |
|
|
|
18,697 |
|
|
|
17,349 |
|
|
|
Mortgage banking operations |
|
7,478 |
|
|
|
11,440 |
|
|
|
14,138 |
|
|
|
18,918 |
|
|
|
24,329 |
|
|
|
Bank-owned life insurance |
|
1,245 |
|
|
|
1,307 |
|
|
|
2,317 |
|
|
|
2,552 |
|
|
|
3,367 |
|
|
|
Miscellaneous |
|
3,720 |
|
|
|
2,042 |
|
|
|
1,427 |
|
|
|
5,762 |
|
|
|
4,066 |
|
|
| |
|
22,201 |
|
|
|
23,728 |
|
|
|
25,428 |
|
|
|
45,929 |
|
|
|
49,111 |
|
|
|
Net gain on sale of securities |
|
77 |
|
|
|
485 |
|
|
|
93 |
|
|
|
562 |
|
|
|
171 |
|
|
|
Net change in valuation of financial instruments carried at fair
value |
|
58 |
|
|
|
59 |
|
|
|
2,199 |
|
|
|
117 |
|
|
|
(2,397 |
) |
|
|
Total non-interest income |
|
22,336 |
|
|
|
24,272 |
|
|
|
27,720 |
|
|
|
46,608 |
|
|
|
46,885 |
|
|
| NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Salary and employee benefits |
|
61,935 |
|
|
|
64,819 |
|
|
|
63,415 |
|
|
|
126,754 |
|
|
|
123,323 |
|
|
|
Less capitalized loan origination costs |
|
(8,768 |
) |
|
|
(9,696 |
) |
|
|
(11,110 |
) |
|
|
(18,464 |
) |
|
|
(16,916 |
) |
|
|
Occupancy and equipment |
|
12,823 |
|
|
|
12,989 |
|
|
|
12,985 |
|
|
|
25,812 |
|
|
|
26,092 |
|
|
|
Information / computer data services |
|
5,602 |
|
|
|
6,203 |
|
|
|
6,084 |
|
|
|
11,805 |
|
|
|
11,894 |
|
|
|
Payment and card processing services |
|
4,975 |
|
|
|
4,326 |
|
|
|
3,851 |
|
|
|
9,301 |
|
|
|
8,091 |
|
|
|
Professional and legal expenses |
|
4,371 |
|
|
|
3,328 |
|
|
|
2,163 |
|
|
|
7,699 |
|
|
|
4,082 |
|
|
|
Advertising and marketing |
|
1,181 |
|
|
|
1,263 |
|
|
|
652 |
|
|
|
2,444 |
|
|
|
2,479 |
|
|
|
Deposit insurance expense |
|
1,241 |
|
|
|
1,533 |
|
|
|
1,705 |
|
|
|
2,774 |
|
|
|
3,340 |
|
|
|
State/municipal business and use taxes |
|
1,083 |
|
|
|
1,065 |
|
|
|
1,104 |
|
|
|
2,148 |
|
|
|
2,088 |
|
|
|
Real estate operations |
|
118 |
|
|
|
(242 |
) |
|
|
4 |
|
|
|
(124 |
) |
|
|
104 |
|
|
|
Amortization of core deposit intangibles |
|
1,711 |
|
|
|
1,711 |
|
|
|
2,002 |
|
|
|
3,422 |
|
|
|
4,003 |
|
|
|
Miscellaneous |
|
6,156 |
|
|
|
5,509 |
|
|
|
5,199 |
|
|
|
11,665 |
|
|
|
11,556 |
|
|
| |
|
92,428 |
|
|
|
92,808 |
|
|
|
88,054 |
|
|
|
185,236 |
|
|
|
180,136 |
|
|
|
COVID-19 expenses |
|
117 |
|
|
|
148 |
|
|
|
2,152 |
|
|
|
265 |
|
|
|
2,391 |
|
|
|
Merger and acquisition-related expenses |
|
79 |
|
|
|
571 |
|
|
|
336 |
|
|
|
650 |
|
|
|
1,478 |
|
|
|
Total non-interest expense |
|
92,624 |
|
|
|
93,527 |
|
|
|
90,542 |
|
|
|
186,151 |
|
|
|
184,005 |
|
|
|
Income before provision for income taxes |
|
67,522 |
|
|
|
57,657 |
|
|
|
28,135 |
|
|
|
125,179 |
|
|
|
49,625 |
|
|
| PROVISION
FOR INCOME TAXES |
|
13,140 |
|
|
|
10,802 |
|
|
|
4,594 |
|
|
|
23,942 |
|
|
|
9,202 |
|
|
| NET
INCOME |
|
$ |
54,382 |
|
|
|
$ |
46,855 |
|
|
|
$ |
23,541 |
|
|
|
$ |
101,237 |
|
|
|
$ |
40,423 |
|
|
| Earnings per share available
to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.57 |
|
|
|
$ |
1.34 |
|
|
|
$ |
0.67 |
|
|
|
$ |
2.90 |
|
|
|
$ |
1.14 |
|
|
|
Diluted |
|
$ |
1.56 |
|
|
|
$ |
1.33 |
|
|
|
$ |
0.67 |
|
|
|
$ |
2.88 |
|
|
|
$ |
1.14 |
|
|
| Cumulative dividends declared
per common share |
|
$ |
0.41 |
|
|
|
$ |
0.41 |
|
|
|
$ |
— |
|
|
|
$ |
0.82 |
|
|
|
$ |
0.41 |
|
|
| Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
34,736,639 |
|
|
|
34,973,383 |
|
|
|
35,189,260 |
|
|
|
34,854,357 |
|
|
|
35,326,401 |
|
|
|
Diluted |
|
34,933,714 |
|
|
|
35,303,483 |
|
|
|
35,283,690 |
|
|
|
35,149,986 |
|
|
|
35,545,086 |
|
|
| (Decrease) increase in common
shares outstanding |
|
(184,455 |
) |
|
|
(423,857 |
) |
|
|
55,440 |
|
|
|
(608,312 |
) |
|
|
(593,677 |
) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL CONDITION |
|
|
|
|
|
|
|
|
|
Percentage Change |
| (in thousands except shares and
per share data) |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
329,359 |
|
|
|
$ |
296,184 |
|
|
|
$ |
311,899 |
|
|
|
$ |
291,036 |
|
|
|
11.2 |
|
% |
|
13.2 |
|
% |
| Interest-bearing deposits |
|
1,138,572 |
|
|
|
1,353,743 |
|
|
|
922,284 |
|
|
|
128,938 |
|
|
|
(15.9 |
) |
% |
|
783.0 |
|
% |
|
Total cash and cash equivalents |
|
1,467,931 |
|
|
|
1,649,927 |
|
|
|
1,234,183 |
|
|
|
419,974 |
|
|
|
(11.0 |
) |
% |
|
249.5 |
|
% |
| Securities - trading |
|
25,097 |
|
|
|
25,039 |
|
|
|
24,980 |
|
|
|
23,239 |
|
|
|
0.2 |
|
% |
|
8.0 |
|
% |
| Securities - available for
sale |
|
3,275,979 |
|
|
|
2,989,760 |
|
|
|
2,322,593 |
|
|
|
1,706,781 |
|
|
|
9.6 |
|
% |
|
91.9 |
|
% |
| Securities - held to
maturity |
|
455,256 |
|
|
|
441,857 |
|
|
|
421,713 |
|
|
|
441,075 |
|
|
|
3.0 |
|
% |
|
3.2 |
|
% |
|
Total securities |
|
3,756,332 |
|
|
|
3,456,656 |
|
|
|
2,769,286 |
|
|
|
2,171,095 |
|
|
|
8.7 |
|
% |
|
73.0 |
|
% |
| Equity securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
340,052 |
|
|
|
nm |
|
(100.0 |
) |
% |
| Federal Home Loan Bank
stock |
|
14,001 |
|
|
|
14,001 |
|
|
|
16,358 |
|
|
|
16,363 |
|
|
|
— |
|
% |
|
(14.4 |
) |
% |
| Securities purchased under
agreements to resell |
|
300,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
nm |
|
nm |
| Loans held for sale |
|
71,741 |
|
|
|
135,263 |
|
|
|
243,795 |
|
|
|
258,700 |
|
|
|
(47.0 |
) |
% |
|
(72.3 |
) |
% |
| Loans receivable |
|
9,654,181 |
|
|
|
9,947,697 |
|
|
|
9,870,982 |
|
|
|
10,283,999 |
|
|
|
(3.0 |
) |
% |
|
(6.1 |
) |
% |
| Allowance for credit losses -
loans |
|
(148,009 |
) |
|
|
(156,054 |
) |
|
|
(167,279 |
) |
|
|
(156,352 |
) |
|
|
(5.2 |
) |
% |
|
(5.3 |
) |
% |
|
Net loans receivable |
|
9,506,172 |
|
|
|
9,791,643 |
|
|
|
9,703,703 |
|
|
|
10,127,647 |
|
|
|
(2.9 |
) |
% |
|
(6.1 |
) |
% |
| Accrued interest
receivable |
|
46,979 |
|
|
|
49,214 |
|
|
|
46,617 |
|
|
|
48,806 |
|
|
|
(4.5 |
) |
% |
|
(3.7 |
) |
% |
| Real estate owned (REO) held
for sale, net |
|
763 |
|
|
|
340 |
|
|
|
816 |
|
|
|
2,400 |
|
|
|
124.4 |
|
% |
|
(68.2 |
) |
% |
| Property and equipment,
net |
|
156,063 |
|
|
|
161,268 |
|
|
|
164,556 |
|
|
|
173,360 |
|
|
|
(3.2 |
) |
% |
|
(10.0 |
) |
% |
| Goodwill |
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
|
— |
|
% |
|
— |
|
% |
| Other intangibles, net |
|
18,004 |
|
|
|
19,715 |
|
|
|
21,426 |
|
|
|
25,155 |
|
|
|
(8.7 |
) |
% |
|
(28.4 |
) |
% |
| Bank-owned life insurance |
|
192,677 |
|
|
|
191,388 |
|
|
|
191,830 |
|
|
|
190,468 |
|
|
|
0.7 |
|
% |
|
1.2 |
|
% |
| Operating lease right-of-use
assets |
|
55,287 |
|
|
|
56,217 |
|
|
|
55,367 |
|
|
|
57,667 |
|
|
|
(1.7 |
) |
% |
|
(4.1 |
) |
% |
| Other assets |
|
222,786 |
|
|
|
221,039 |
|
|
|
210,565 |
|
|
|
200,799 |
|
|
|
0.8 |
|
% |
|
10.9 |
|
% |
|
Total assets |
|
$ |
16,181,857 |
|
|
|
$ |
16,119,792 |
|
|
|
$ |
15,031,623 |
|
|
|
$ |
14,405,607 |
|
|
|
0.4 |
|
% |
|
12.3 |
|
% |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
6,090,063 |
|
|
|
$ |
5,994,693 |
|
|
|
$ |
5,492,924 |
|
|
|
$ |
5,281,559 |
|
|
|
1.6 |
|
% |
|
15.3 |
|
% |
|
Interest-bearing transaction and savings accounts |
|
6,673,598 |
|
|
|
6,647,196 |
|
|
|
6,159,052 |
|
|
|
5,692,715 |
|
|
|
0.4 |
|
% |
|
17.2 |
|
% |
|
Interest-bearing certificates |
|
873,047 |
|
|
|
906,978 |
|
|
|
915,320 |
|
|
|
1,042,006 |
|
|
|
(3.7 |
) |
% |
|
(16.2 |
) |
% |
|
Total deposits |
|
13,636,708 |
|
|
|
13,548,867 |
|
|
|
12,567,296 |
|
|
|
12,016,280 |
|
|
|
0.6 |
|
% |
|
13.5 |
|
% |
| Advances from Federal Home
Loan Bank |
|
100,000 |
|
|
|
100,000 |
|
|
|
150,000 |
|
|
|
150,000 |
|
|
|
— |
|
% |
|
(33.3 |
) |
% |
| Customer repurchase agreements
and other borrowings |
|
237,736 |
|
|
|
216,260 |
|
|
|
184,785 |
|
|
|
166,084 |
|
|
|
9.9 |
|
% |
|
43.1 |
|
% |
| Subordinated notes, net |
|
98,380 |
|
|
|
98,290 |
|
|
|
98,201 |
|
|
|
98,140 |
|
|
|
0.1 |
|
% |
|
0.2 |
|
% |
| Junior subordinated debentures
at fair value |
|
117,520 |
|
|
|
117,248 |
|
|
|
116,974 |
|
|
|
109,613 |
|
|
|
0.2 |
|
% |
|
7.2 |
|
% |
| Operating lease
liabilities |
|
59,117 |
|
|
|
59,884 |
|
|
|
59,343 |
|
|
|
61,390 |
|
|
|
(1.3 |
) |
% |
|
(3.7 |
) |
% |
| Accrued expenses and other
liabilities |
|
216,399 |
|
|
|
313,801 |
|
|
|
143,300 |
|
|
|
133,574 |
|
|
|
(31.0 |
) |
% |
|
62.0 |
|
% |
| Deferred compensation |
|
46,786 |
|
|
|
46,625 |
|
|
|
45,460 |
|
|
|
45,423 |
|
|
|
0.3 |
|
% |
|
3.0 |
|
% |
|
Total liabilities |
|
14,512,646 |
|
|
|
14,500,975 |
|
|
|
13,365,359 |
|
|
|
12,780,504 |
|
|
|
0.1 |
|
% |
|
13.6 |
|
% |
| SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
1,311,455 |
|
|
|
1,326,269 |
|
|
|
1,349,879 |
|
|
|
1,345,096 |
|
|
|
(1.1 |
) |
% |
|
(2.5 |
) |
% |
| Retained earnings |
|
319,505 |
|
|
|
279,582 |
|
|
|
247,316 |
|
|
|
201,448 |
|
|
|
14.3 |
|
% |
|
58.6 |
|
% |
| Other components of
shareholders’ equity |
|
38,251 |
|
|
|
12,966 |
|
|
|
69,069 |
|
|
|
78,559 |
|
|
|
195.0 |
|
% |
|
(51.3 |
) |
% |
|
Total shareholders’ equity |
|
1,669,211 |
|
|
|
1,618,817 |
|
|
|
1,666,264 |
|
|
|
1,625,103 |
|
|
|
3.1 |
|
% |
|
2.7 |
|
% |
|
Total liabilities and shareholders’ equity |
|
$ |
16,181,857 |
|
|
|
$ |
16,119,792 |
|
|
|
$ |
15,031,623 |
|
|
|
$ |
14,405,607 |
|
|
|
0.4 |
|
% |
|
12.3 |
|
% |
| Common Shares
Issued: |
|
|
|
|
|
|
|
|
|
|
|
|
| Shares outstanding at end of
period |
|
34,550,888 |
|
|
|
34,735,343 |
|
|
|
35,159,200 |
|
|
|
35,157,899 |
|
|
|
|
|
|
| Common shareholders’ equity
per share (1) |
|
$ |
48.31 |
|
|
|
$ |
46.60 |
|
|
|
$ |
47.39 |
|
|
|
$ |
46.22 |
|
|
|
|
|
|
| Common shareholders’ tangible
equity per share (1) (2) |
|
$ |
36.99 |
|
|
|
$ |
35.29 |
|
|
|
$ |
36.17 |
|
|
|
$ |
34.89 |
|
|
|
|
|
|
| Common shareholders’ tangible
equity to tangible assets (2) |
|
8.09 |
|
% |
|
7.80 |
|
% |
|
8.69 |
|
% |
|
8.76 |
|
% |
|
|
|
|
| Consolidated Tier 1 leverage
capital ratio |
|
8.86 |
|
% |
|
9.10 |
|
% |
|
9.50 |
|
% |
|
9.83 |
|
% |
|
|
|
|
|
(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 excludes goodwill and other
intangible assets. Tangible assets exclude goodwill and
other intangible assets. These ratios represent non-GAAP
financial measures. See also Non-GAAP Financial Measures
reconciliation tables on the final two pages of the press release
tables. |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Percentage Change |
| LOANS |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner-occupied |
|
$ |
1,066,237 |
|
|
$ |
1,045,656 |
|
|
$ |
1,076,467 |
|
|
$ |
1,027,399 |
|
|
2.0 |
|
% |
|
3.8 |
|
% |
|
Investment properties |
|
1,950,211 |
|
|
1,931,805 |
|
|
1,955,684 |
|
|
2,017,789 |
|
|
1.0 |
|
% |
|
(3.3 |
) |
% |
|
Small balance CRE |
|
621,102 |
|
|
639,330 |
|
|
573,849 |
|
|
624,726 |
|
|
(2.9 |
) |
% |
|
(0.6 |
) |
% |
| Multifamily real estate |
|
504,445 |
|
|
433,775 |
|
|
428,223 |
|
|
437,201 |
|
|
16.3 |
|
% |
|
15.4 |
|
% |
| Construction, land and land
development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial construction |
|
182,868 |
|
|
199,037 |
|
|
228,937 |
|
|
215,860 |
|
|
(8.1 |
) |
% |
|
(15.3 |
) |
% |
|
Multifamily construction |
|
295,661 |
|
|
305,694 |
|
|
305,527 |
|
|
256,335 |
|
|
(3.3 |
) |
% |
|
15.3 |
|
% |
|
One- to four-family construction |
|
603,895 |
|
|
542,840 |
|
|
507,810 |
|
|
528,966 |
|
|
11.2 |
|
% |
|
14.2 |
|
% |
|
Land and land development |
|
290,404 |
|
|
266,730 |
|
|
248,915 |
|
|
235,602 |
|
|
8.9 |
|
% |
|
23.3 |
|
% |
| Commercial business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
1,124,359 |
|
|
1,096,303 |
|
|
1,133,989 |
|
|
1,250,288 |
|
|
2.6 |
|
% |
|
(10.1 |
) |
% |
|
PPP |
|
807,172 |
|
|
1,280,291 |
|
|
1,044,472 |
|
|
1,121,928 |
|
|
(37.0 |
) |
% |
|
(28.1 |
) |
% |
|
Small business scored |
|
743,975 |
|
|
717,502 |
|
|
743,451 |
|
|
779,678 |
|
|
3.7 |
|
% |
|
(4.6 |
) |
% |
| Agricultural business,
including secured by farmland: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural business, including secured by farmland |
|
247,467 |
|
|
226,094 |
|
|
299,949 |
|
|
328,077 |
|
|
9.5 |
|
% |
|
(24.6 |
) |
% |
|
PPP |
|
17,962 |
|
|
36,316 |
|
|
— |
|
|
— |
|
|
(50.5 |
) |
% |
|
nm |
| One- to four-family
residential |
|
637,701 |
|
|
655,627 |
|
|
717,939 |
|
|
817,787 |
|
|
(2.7 |
) |
% |
|
(22.0 |
) |
% |
| Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer—home equity revolving lines of credit |
|
458,915 |
|
|
466,132 |
|
|
491,812 |
|
|
515,603 |
|
|
(1.5 |
) |
% |
|
(11.0 |
) |
% |
|
Consumer—other |
|
101,807 |
|
|
104,565 |
|
|
113,958 |
|
|
126,760 |
|
|
(2.6 |
) |
% |
|
(19.7 |
) |
% |
|
Total loans receivable |
|
$ |
9,654,181 |
|
|
$ |
9,947,697 |
|
|
$ |
9,870,982 |
|
|
$ |
10,283,999 |
|
|
(3.0 |
) |
% |
|
(6.1 |
) |
% |
| Restructured loans performing
under their restructured terms |
|
$ |
5,472 |
|
|
$ |
6,424 |
|
|
$ |
6,673 |
|
|
$ |
6,391 |
|
|
|
|
|
| Loans 30 - 89 days past due
and on accrual |
|
$ |
5,656 |
|
|
$ |
19,233 |
|
|
$ |
12,291 |
|
|
$ |
20,807 |
|
|
|
|
|
| Total delinquent loans
(including loans on non-accrual), net |
|
$ |
23,582 |
|
|
$ |
42,444 |
|
|
$ |
36,131 |
|
|
$ |
36,269 |
|
|
|
|
|
| Total delinquent
loans / Total loans receivable |
|
0.24 |
% |
|
0.43 |
% |
|
0.37 |
% |
|
0.35 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LOANS BY GEOGRAPHIC
LOCATION |
|
|
|
|
|
|
|
|
|
|
|
Percentage Change |
| |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Amount |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington |
|
$ |
4,541,792 |
|
|
47.0 |
% |
|
$ |
4,683,600 |
|
|
$ |
4,647,553 |
|
|
$ |
4,787,550 |
|
|
(3.0 |
) |
% |
|
(5.1 |
) |
% |
| California |
|
2,246,580 |
|
|
23.3 |
% |
|
2,320,384 |
|
|
2,279,749 |
|
|
2,359,703 |
|
|
(3.2 |
) |
% |
|
(4.8 |
) |
% |
| Oregon |
|
1,753,285 |
|
|
18.2 |
% |
|
1,801,104 |
|
|
1,792,156 |
|
|
1,899,933 |
|
|
(2.7 |
) |
% |
|
(7.7 |
) |
% |
| Idaho |
|
525,610 |
|
|
5.4 |
% |
|
539,061 |
|
|
537,996 |
|
|
592,515 |
|
|
(2.5 |
) |
% |
|
(11.3 |
) |
% |
| Utah |
|
92,103 |
|
|
1.0 |
% |
|
92,399 |
|
|
80,704 |
|
|
67,929 |
|
|
(0.3 |
) |
% |
|
35.6 |
|
% |
| Other |
|
494,811 |
|
|
5.1 |
% |
|
511,149 |
|
|
532,824 |
|
|
576,369 |
|
|
(3.2 |
) |
% |
|
(14.2 |
) |
% |
| Total loans receivable |
|
$ |
9,654,181 |
|
|
100.0 |
% |
|
$ |
9,947,697 |
|
|
$ |
9,870,982 |
|
|
$ |
10,283,999 |
|
|
(3.0 |
) |
% |
|
(6.1 |
) |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| ADDITIONAL FINANCIAL
INFORMATION(dollars in thousands) |
|
| |
|
| LOAN
ORIGINATIONS |
Quarters Ended |
| |
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
|
Commercial real estate |
$ |
103,415 |
|
|
$ |
91,217 |
|
|
$ |
111,765 |
|
| Multifamily real estate |
45,674 |
|
|
12,878 |
|
|
6,384 |
|
| Construction and land |
509,828 |
|
|
447,369 |
|
|
290,955 |
|
| Commercial business: |
|
|
|
|
|
|
Commercial business |
181,996 |
|
|
115,911 |
|
|
167,268 |
|
|
SBA PPP |
55,990 |
|
|
428,180 |
|
|
1,151,170 |
|
| Agricultural business |
12,546 |
|
|
27,167 |
|
|
16,293 |
|
| One-to four-family
residential |
47,086 |
|
|
57,731 |
|
|
24,537 |
|
| Consumer |
131,424 |
|
|
87,322 |
|
|
126,653 |
|
| Total loan originations
(excluding loans held for sale) |
$ |
1,087,959 |
|
|
$ |
1,267,775 |
|
|
$ |
1,895,025 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
| |
|
Quarters Ended |
| CHANGE IN
THE |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
| ALLOWANCE FOR CREDIT
LOSSES - LOANS |
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
156,054 |
|
|
|
$ |
167,279 |
|
|
|
$ |
130,488 |
|
|
| (Recapture)/provision for
credit losses - loans |
|
(8,100 |
) |
|
|
(8,035 |
) |
|
|
29,524 |
|
|
| Recoveries of loans previously
charged off: |
|
|
|
|
|
|
|
Commercial real estate |
|
147 |
|
|
|
24 |
|
|
|
54 |
|
|
|
Construction and land |
|
— |
|
|
|
100 |
|
|
|
105 |
|
|
|
One- to four-family real estate |
|
20 |
|
|
|
113 |
|
|
|
31 |
|
|
|
Commercial business |
|
321 |
|
|
|
979 |
|
|
|
370 |
|
|
|
Agricultural business, including secured by farmland |
|
8 |
|
|
|
— |
|
|
|
22 |
|
|
|
Consumer |
|
97 |
|
|
|
296 |
|
|
|
60 |
|
|
| |
|
593 |
|
|
|
1,512 |
|
|
|
642 |
|
|
| Loans charged off: |
|
|
|
|
|
|
|
Commercial real estate |
|
(3 |
) |
|
|
(3,763 |
) |
|
|
— |
|
|
|
Construction and land |
|
— |
|
|
|
— |
|
|
|
(100 |
) |
|
|
Commercial business |
|
(123 |
) |
|
|
(789 |
) |
|
|
(3,553 |
) |
|
|
Agricultural business, including secured by farmland |
|
(2 |
) |
|
|
— |
|
|
|
(62 |
) |
|
|
Consumer |
|
(410 |
) |
|
|
(150 |
) |
|
|
(587 |
) |
|
| |
|
(538 |
) |
|
|
(4,702 |
) |
|
|
(4,302 |
) |
|
|
Net recoveries (charge-offs) |
|
55 |
|
|
|
(3,190 |
) |
|
|
(3,660 |
) |
|
| Balance, end of period |
|
$ |
148,009 |
|
|
|
$ |
156,054 |
|
|
|
$ |
156,352 |
|
|
| Net recoveries (charge-offs) /
Average loans receivable |
|
0.001 |
|
% |
|
(0.032 |
) |
% |
|
(0.036 |
) |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| ALLOCATION
OF |
|
|
|
|
|
|
| ALLOWANCE FOR CREDIT
LOSSES - LOANS |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
| Specific or allocated credit
loss allowance: |
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
60,349 |
|
|
$ |
59,411 |
|
|
$ |
53,166 |
|
|
Multifamily real estate |
|
5,807 |
|
|
4,367 |
|
|
3,504 |
|
|
Construction and land |
|
30,899 |
|
|
36,440 |
|
|
36,916 |
|
|
One- to four-family real estate |
|
9,800 |
|
|
7,988 |
|
|
12,746 |
|
|
Commercial business |
|
30,830 |
|
|
31,411 |
|
|
33,870 |
|
|
Agricultural business, including secured by farmland |
|
3,256 |
|
|
4,617 |
|
|
4,517 |
|
|
Consumer |
|
7,068 |
|
|
11,820 |
|
|
11,633 |
|
|
Total allowance for credit losses - loans |
|
$ |
148,009 |
|
|
$ |
156,054 |
|
|
$ |
156,352 |
|
| Allowance for credit losses -
loans / Total loans receivable |
|
1.53 |
% |
|
1.57 |
% |
|
1.52 |
% |
| Allowance for credit losses -
loans / Non-performing loans |
|
481 |
% |
|
426 |
% |
|
418 |
% |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
Quarters Ended |
| CHANGE IN
THE |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
| ALLOWANCE FOR CREDIT
LOSSES - UNFUNDED LOAN COMMITMENTS |
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
12,077 |
|
|
|
$ |
13,297 |
|
|
|
$ |
11,460 |
|
|
| Recapture for credit losses -
unfunded loan commitments |
|
(2,168 |
) |
|
|
(1,220 |
) |
|
|
(905 |
) |
|
| Balance, end of period |
|
$ |
9,909 |
|
|
|
$ |
12,077 |
|
|
|
$ |
10,555 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
| |
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
| NON-PERFORMING
ASSETS |
|
|
|
|
|
|
|
| Loans on non-accrual
status: |
|
|
|
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
|
|
|
Commercial |
$ |
17,427 |
|
|
$ |
21,615 |
|
|
$ |
18,199 |
|
|
$ |
10,845 |
|
|
Construction and land |
541 |
|
|
986 |
|
|
936 |
|
|
732 |
|
|
One- to four-family |
4,007 |
|
|
4,456 |
|
|
3,556 |
|
|
2,942 |
|
|
Commercial business |
3,673 |
|
|
4,194 |
|
|
5,407 |
|
|
18,486 |
|
|
Agricultural business, including secured by farmland |
1,200 |
|
|
1,536 |
|
|
1,743 |
|
|
433 |
|
|
Consumer |
1,799 |
|
|
2,244 |
|
|
2,719 |
|
|
2,412 |
|
| |
28,647 |
|
|
35,031 |
|
|
32,560 |
|
|
35,850 |
|
| Loans more than 90 days
delinquent, still on accrual: |
|
|
|
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
|
|
|
Commercial |
911 |
|
|
— |
|
|
— |
|
|
— |
|
|
One- to four-family |
579 |
|
|
1,524 |
|
|
1,899 |
|
|
472 |
|
|
Commercial business |
495 |
|
|
37 |
|
|
1,025 |
|
|
1 |
|
|
Agricultural business, including secured by farmland |
— |
|
|
— |
|
|
— |
|
|
1,061 |
|
|
Consumer |
131 |
|
|
— |
|
|
130 |
|
|
36 |
|
| |
2,116 |
|
|
1,561 |
|
|
3,054 |
|
|
1,570 |
|
| Total non-performing
loans |
30,763 |
|
|
36,592 |
|
|
35,614 |
|
|
37,420 |
|
| REO |
763 |
|
|
340 |
|
|
816 |
|
|
2,400 |
|
| Other repossessed assets |
17 |
|
|
37 |
|
|
51 |
|
|
47 |
|
|
Total non-performing assets |
$ |
31,543 |
|
|
$ |
36,969 |
|
|
$ |
36,481 |
|
|
$ |
39,867 |
|
| Total non-performing
assets to total assets |
0.19 |
% |
|
0.23 |
% |
|
0.24 |
% |
|
0.28 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
| LOANS BY CREDIT RISK
RATING |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Pass |
$ |
9,315,264 |
|
|
$ |
9,584,429 |
|
|
$ |
9,494,147 |
|
|
$ |
9,869,917 |
|
| Special Mention |
66,103 |
|
|
51,692 |
|
|
36,598 |
|
|
54,291 |
|
| Substandard |
272,814 |
|
|
311,576 |
|
|
340,237 |
|
|
359,791 |
|
| Total |
$ |
9,654,181 |
|
|
$ |
9,947,697 |
|
|
$ |
9,870,982 |
|
|
$ |
10,283,999 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
Quarters Ended |
|
Six Months Ended |
| REAL ESTATE
OWNED |
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
|
Jun 30, 2021 |
|
Jun 30, 2020 |
|
Balance, beginning of period |
$ |
340 |
|
|
$ |
816 |
|
|
|
$ |
2,402 |
|
|
|
$ |
816 |
|
|
|
$ |
814 |
|
|
|
Additions from loan foreclosures |
423 |
|
|
— |
|
|
|
— |
|
|
|
423 |
|
|
|
1,588 |
|
|
|
Proceeds from dispositions of REO |
— |
|
|
(783 |
) |
|
|
(98 |
) |
|
|
(783 |
) |
|
|
(98 |
) |
|
|
Gain on sale of REO |
— |
|
|
307 |
|
|
|
96 |
|
|
|
307 |
|
|
|
96 |
|
|
| Balance, end of period |
$ |
763 |
|
|
$ |
340 |
|
|
|
$ |
2,400 |
|
|
|
$ |
763 |
|
|
|
$ |
2,400 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| DEPOSIT
COMPOSITION |
|
|
|
|
|
|
|
|
|
Percentage Change |
| |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
6,090,063 |
|
|
$ |
5,994,693 |
|
|
$ |
5,492,924 |
|
|
$ |
5,281,559 |
|
|
1.6 |
|
% |
|
15.3 |
|
% |
| Interest-bearing checking |
|
1,736,696 |
|
|
1,722,085 |
|
|
1,569,435 |
|
|
1,399,593 |
|
|
0.8 |
|
% |
|
24.1 |
|
% |
| Regular savings accounts |
|
2,646,302 |
|
|
2,597,731 |
|
|
2,398,482 |
|
|
2,197,790 |
|
|
1.9 |
|
% |
|
20.4 |
|
% |
| Money market accounts |
|
2,290,600 |
|
|
2,327,380 |
|
|
2,191,135 |
|
|
2,095,332 |
|
|
(1.6 |
) |
% |
|
9.3 |
|
% |
|
Total interest-bearing transaction and savings accounts |
|
6,673,598 |
|
|
6,647,196 |
|
|
6,159,052 |
|
|
5,692,715 |
|
|
0.4 |
|
% |
|
17.2 |
|
% |
|
Total core deposits |
|
12,763,661 |
|
|
12,641,889 |
|
|
11,651,976 |
|
|
10,974,274 |
|
|
1.0 |
|
% |
|
16.3 |
|
% |
| Interest-bearing
certificates |
|
873,047 |
|
|
906,978 |
|
|
915,320 |
|
|
1,042,006 |
|
|
(3.7 |
) |
% |
|
(16.2 |
) |
% |
|
Total deposits |
|
$ |
13,636,708 |
|
|
$ |
13,548,867 |
|
|
$ |
12,567,296 |
|
|
$ |
12,016,280 |
|
|
0.6 |
|
% |
|
13.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| GEOGRAPHIC
CONCENTRATION OF DEPOSITS |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Percentage Change |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Amount |
|
Prior Qtr |
|
Prior Yr Qtr |
|
Washington |
|
$ |
7,547,591 |
|
|
55.3 |
% |
|
$ |
7,504,389 |
|
|
$ |
7,058,404 |
|
|
$ |
6,765,186 |
|
|
0.6 |
% |
|
11.6 |
% |
| Oregon |
|
2,939,667 |
|
|
21.6 |
% |
|
2,929,027 |
|
|
2,604,908 |
|
|
2,440,617 |
|
|
0.4 |
% |
|
20.4 |
% |
| California |
|
2,417,387 |
|
|
17.7 |
% |
|
2,401,299 |
|
|
2,237,949 |
|
|
2,224,477 |
|
|
0.7 |
% |
|
8.7 |
% |
| Idaho |
|
732,063 |
|
|
5.4 |
% |
|
714,152 |
|
|
666,035 |
|
|
586,000 |
|
|
2.5 |
% |
|
24.9 |
% |
| Total deposits |
|
$ |
13,636,708 |
|
|
100.0 |
% |
|
$ |
13,548,867 |
|
|
$ |
12,567,296 |
|
|
$ |
12,016,280 |
|
|
0.6 |
% |
|
13.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| INCLUDED IN TOTAL
DEPOSITS |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Public non-interest-bearing accounts |
|
$ |
187,702 |
|
|
$ |
151,850 |
|
|
$ |
175,352 |
|
|
$ |
139,133 |
|
| Public interest-bearing
transaction & savings accounts |
|
156,987 |
|
|
169,192 |
|
|
127,523 |
|
|
136,039 |
|
| Public interest-bearing
certificates |
|
41,444 |
|
|
51,021 |
|
|
59,127 |
|
|
56,609 |
|
|
Total public deposits |
|
$ |
386,133 |
|
|
$ |
372,063 |
|
|
$ |
362,002 |
|
|
$ |
331,781 |
|
| Total brokered deposits |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
119,399 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Actual |
|
Minimum to be categorized as "Adequately
Capitalized" |
|
Minimum to becategorized
as"Well Capitalized" |
| REGULATORY CAPITAL
RATIOS AS OF JUNE 30, 2021 |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Banner
Corporation-consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
$ |
1,618,512 |
|
|
14.62 |
% |
|
$ |
885,723 |
|
|
8.00 |
% |
|
$ |
1,107,154 |
|
|
10.00 |
% |
|
Tier 1 capital to risk-weighted assets |
|
1,385,143 |
|
|
12.51 |
% |
|
664,292 |
|
|
6.00 |
% |
|
664,292 |
|
|
6.00 |
% |
|
Tier 1 leverage capital to average assets |
|
1,385,143 |
|
|
8.86 |
% |
|
625,458 |
|
|
4.00 |
% |
|
n/a |
|
n/a |
|
Common equity tier 1 capital to risk-weighted assets |
|
1,241,643 |
|
|
11.21 |
% |
|
498,219 |
|
|
4.50 |
% |
|
n/a |
|
n/a |
| Banner Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
1,505,250 |
|
|
13.60 |
% |
|
885,354 |
|
|
8.00 |
% |
|
1,106,693 |
|
|
10.00 |
% |
|
Tier 1 capital to risk-weighted assets |
|
1,371,881 |
|
|
12.40 |
% |
|
664,016 |
|
|
6.00 |
% |
|
885,354 |
|
|
8.00 |
% |
|
Tier 1 leverage capital to average assets |
|
1,371,881 |
|
|
8.78 |
% |
|
625,305 |
|
|
4.00 |
% |
|
781,632 |
|
|
5.00 |
% |
|
Common equity tier 1 capital to risk-weighted assets |
|
1,371,881 |
|
|
12.40 |
% |
|
498,012 |
|
|
4.50 |
% |
|
719,350 |
|
|
6.50 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (rates / ratios
annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ANALYSIS OF NET
INTEREST SPREAD |
Quarters Ended |
| |
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
| |
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 |
$ |
69,908 |
|
|
$ |
544 |
|
|
3.12 |
% |
|
$ |
119,341 |
|
|
$ |
925 |
|
|
3.14 |
% |
|
$ |
152,636 |
|
|
$ |
1,451 |
|
|
3.82 |
% |
|
Mortgage loans |
7,147,733 |
|
|
80,673 |
|
|
4.53 |
% |
|
7,144,770 |
|
|
80,580 |
|
|
4.57 |
% |
|
7,314,125 |
|
|
87,172 |
|
|
4.79 |
% |
|
Commercial/agricultural loans |
2,625,149 |
|
|
33,614 |
|
|
5.14 |
% |
|
2,691,554 |
|
|
26,711 |
|
|
4.02 |
% |
|
2,599,878 |
|
|
25,200 |
|
|
3.90 |
% |
|
Consumer and other loans |
122,951 |
|
|
1,828 |
|
|
5.96 |
% |
|
127,469 |
|
|
1,947 |
|
|
6.19 |
% |
|
152,438 |
|
|
2,361 |
|
|
6.23 |
% |
|
Total loans(1)(3) |
9,965,741 |
|
|
116,659 |
|
|
4.70 |
% |
|
10,083,134 |
|
|
110,163 |
|
|
4.43 |
% |
|
10,219,077 |
|
|
116,184 |
|
|
4.57 |
% |
|
Mortgage-backed securities |
2,440,913 |
|
|
11,563 |
|
|
1.90 |
% |
|
1,953,820 |
|
|
9,472 |
|
|
1.97 |
% |
|
1,286,223 |
|
|
8,083 |
|
|
2.53 |
% |
|
Other securities |
1,250,417 |
|
|
7,088 |
|
|
2.27 |
% |
|
1,048,856 |
|
|
6,687 |
|
|
2.59 |
% |
|
787,957 |
|
|
5,859 |
|
|
2.99 |
% |
|
Equity securities |
— |
|
|
— |
|
|
— |
% |
|
1,742 |
|
|
— |
|
|
— |
% |
|
114,349 |
|
|
123 |
|
|
0.43 |
% |
|
Interest-bearing deposits with banks |
1,139,749 |
|
|
376 |
|
|
0.13 |
% |
|
1,032,138 |
|
|
262 |
|
|
0.10 |
% |
|
212,502 |
|
|
172 |
|
|
0.33 |
% |
|
FHLB stock |
14,001 |
|
|
161 |
|
|
4.61 |
% |
|
15,952 |
|
|
161 |
|
|
4.09 |
% |
|
16,620 |
|
|
300 |
|
|
7.26 |
% |
|
Total investment securities (3) |
4,845,080 |
|
|
19,188 |
|
|
1.59 |
% |
|
4,052,508 |
|
|
16,582 |
|
|
1.66 |
% |
|
2,417,651 |
|
|
14,537 |
|
|
2.42 |
% |
|
Total interest-earning assets |
14,810,821 |
|
|
135,847 |
|
|
3.68 |
% |
|
14,135,642 |
|
|
126,745 |
|
|
3.64 |
% |
|
12,636,728 |
|
|
130,721 |
|
|
4.16 |
% |
| Non-interest-earning
assets |
1,227,167 |
|
|
|
|
|
|
1,237,281 |
|
|
|
|
|
|
1,245,626 |
|
|
|
|
|
|
Total assets |
$ |
16,037,988 |
|
|
|
|
|
|
$ |
15,372,923 |
|
|
|
|
|
|
$ |
13,882,354 |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
1,754,363 |
|
|
302 |
|
|
0.07 |
% |
|
$ |
1,616,824 |
|
|
315 |
|
|
0.08 |
% |
|
$ |
1,376,710 |
|
|
374 |
|
|
0.11 |
% |
|
Savings accounts |
2,622,716 |
|
|
454 |
|
|
0.07 |
% |
|
2,486,820 |
|
|
521 |
|
|
0.08 |
% |
|
2,108,896 |
|
|
998 |
|
|
0.19 |
% |
|
Money market accounts |
2,288,638 |
|
|
668 |
|
|
0.12 |
% |
|
2,242,748 |
|
|
775 |
|
|
0.14 |
% |
|
1,979,419 |
|
|
1,565 |
|
|
0.32 |
% |
|
Certificates of deposit |
889,020 |
|
|
1,604 |
|
|
0.72 |
% |
|
913,053 |
|
|
1,998 |
|
|
0.89 |
% |
|
1,117,547 |
|
|
3,757 |
|
|
1.35 |
% |
|
Total interest-bearing deposits |
7,554,737 |
|
|
3,028 |
|
|
0.16 |
% |
|
7,259,445 |
|
|
3,609 |
|
|
0.20 |
% |
|
6,582,572 |
|
|
6,694 |
|
|
0.41 |
% |
|
Non-interest-bearing deposits |
6,057,884 |
|
|
— |
|
|
— |
% |
|
5,663,820 |
|
|
— |
|
|
— |
% |
|
4,902,992 |
|
|
— |
|
|
— |
% |
|
Total deposits |
13,612,621 |
|
|
3,028 |
|
|
0.09 |
% |
|
12,923,265 |
|
|
3,609 |
|
|
0.11 |
% |
|
11,485,564 |
|
|
6,694 |
|
|
0.23 |
% |
| Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
100,000 |
|
|
655 |
|
|
2.63 |
% |
|
144,444 |
|
|
934 |
|
|
2.62 |
% |
|
156,374 |
|
|
984 |
|
|
2.53 |
% |
|
Other borrowings |
240,229 |
|
|
124 |
|
|
0.21 |
% |
|
202,930 |
|
|
109 |
|
|
0.22 |
% |
|
285,735 |
|
|
238 |
|
|
0.34 |
% |
|
Junior subordinated debentures and subordinated notes |
247,944 |
|
|
2,204 |
|
|
3.57 |
% |
|
247,944 |
|
|
2,208 |
|
|
3.61 |
% |
|
149,043 |
|
|
1,251 |
|
|
3.38 |
% |
|
Total borrowings |
588,173 |
|
|
2,983 |
|
|
2.03 |
% |
|
595,318 |
|
|
3,251 |
|
|
2.21 |
% |
|
591,152 |
|
|
2,473 |
|
|
1.68 |
% |
|
Total funding liabilities |
14,200,794 |
|
|
6,011 |
|
|
0.17 |
% |
|
13,518,583 |
|
|
6,860 |
|
|
0.21 |
% |
|
12,076,716 |
|
|
9,167 |
|
|
0.31 |
% |
| Other non-interest-bearing
liabilities(2) |
199,619 |
|
|
|
|
|
|
207,560 |
|
|
|
|
|
|
188,369 |
|
|
|
|
|
|
Total liabilities |
14,400,413 |
|
|
|
|
|
|
13,726,143 |
|
|
|
|
|
|
12,265,085 |
|
|
|
|
|
| Shareholders’ equity |
1,637,575 |
|
|
|
|
|
|
1,646,780 |
|
|
|
|
|
|
1,617,269 |
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
16,037,988 |
|
|
|
|
|
|
$ |
15,372,923 |
|
|
|
|
|
|
$ |
13,882,354 |
|
|
|
|
|
| Net interest income/rate
spread (tax equivalent) |
|
|
$ |
129,836 |
|
|
3.51 |
% |
|
|
|
$ |
119,885 |
|
|
3.43 |
% |
|
|
|
$ |
121,554 |
|
|
3.85 |
% |
| Net interest margin (tax
equivalent) |
|
|
|
|
3.52 |
% |
|
|
|
|
|
3.44 |
% |
|
|
|
|
|
3.87 |
% |
| Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjustments for taxable
equivalent basis |
|
|
(2,282 |
) |
|
|
|
|
|
(2,224 |
) |
|
|
|
|
|
(1,974 |
) |
|
|
| Net interest income and
margin, as reported |
|
|
$ |
127,554 |
|
|
3.45 |
% |
|
|
|
$ |
117,661 |
|
|
3.38 |
% |
|
|
|
$ |
119,580 |
|
|
3.81 |
% |
| Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
|
|
1.36 |
% |
|
|
|
|
|
1.24 |
% |
|
|
|
|
|
0.68 |
% |
| Return on average equity |
|
|
|
|
13.32 |
% |
|
|
|
|
|
11.54 |
% |
|
|
|
|
|
5.85 |
% |
| Average equity/average
assets |
|
|
|
|
10.21 |
% |
|
|
|
|
|
10.71 |
% |
|
|
|
|
|
11.65 |
% |
| Average interest-earning
assets/average interest-bearing liabilities |
|
|
|
|
181.89 |
% |
|
|
|
|
|
179.96 |
% |
|
|
|
|
|
176.15 |
% |
| Average interest-earning
assets/average funding liabilities |
|
|
|
|
104.30 |
% |
|
|
|
|
|
104.56 |
% |
|
|
|
|
|
104.64 |
% |
| Non-interest income/average
assets |
|
|
|
|
0.56 |
% |
|
|
|
|
|
0.64 |
% |
|
|
|
|
|
0.80 |
% |
| Non-interest expense/average
assets |
|
|
|
|
2.32 |
% |
|
|
|
|
|
2.47 |
% |
|
|
|
|
|
2.62 |
% |
| Efficiency ratio(4) |
|
|
|
|
61.79 |
% |
|
|
|
|
|
65.90 |
% |
|
|
|
|
|
61.47 |
% |
| Adjusted efficiency
ratio(5) |
|
|
|
|
59.77 |
% |
|
|
|
|
|
63.85 |
% |
|
|
|
|
|
58.58 |
% |
|
(1) |
|
Average balances include loans accounted for on a nonaccrual basis
and 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 $1.3
million, $1.2 million, and $1.0 million for the three months ended
June 30, 2021, March 31, 2021, and June 30, 2020,
respectively. The tax equivalent yield adjustment to interest
earned on tax exempt securities was $1.0 million for both the three
months ended June 30, 2021 and March 31, 2021, compared to
$963,000 for the three months ended June 30, 2020. |
| (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. These
represent non-GAAP financial measures. See the non-GAAP Financial
Measures on the final two pages of the press release tables. |
| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
| (rates / ratios
annualized) |
|
|
|
|
|
|
|
|
|
|
|
| ANALYSIS OF NET
INTEREST SPREAD |
Six Months Ended |
| |
Jun 30, 2021 |
|
Jun 30, 2020 |
| |
Average Balance |
|
Interest and Dividends |
|
Yield/Cost(3) |
|
Average Balance |
|
Interest and Dividends |
|
Yield/Cost(3) |
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Held for sale loans |
$ |
94,488 |
|
|
$ |
1,469 |
|
|
3.14 |
% |
|
$ |
152,631 |
|
|
$ |
2,971 |
|
|
3.91 |
% |
|
Mortgage loans |
7,146,260 |
|
|
161,253 |
|
|
4.55 |
% |
|
7,312,120 |
|
|
180,233 |
|
|
4.96 |
% |
|
Commercial/agricultural loans |
2,658,168 |
|
|
60,325 |
|
|
4.58 |
% |
|
2,241,942 |
|
|
48,159 |
|
|
4.32 |
% |
|
Consumer and other loans |
125,197 |
|
|
3,775 |
|
|
6.08 |
% |
|
157,768 |
|
|
4,956 |
|
|
6.32 |
% |
|
Total loans(1)(3) |
10,024,113 |
|
|
226,822 |
|
|
4.56 |
% |
|
9,864,461 |
|
|
236,319 |
|
|
4.82 |
% |
|
Mortgage-backed securities |
2,198,712 |
|
|
21,035 |
|
|
1.93 |
% |
|
1,320,404 |
|
|
17,319 |
|
|
2.64 |
% |
|
Other securities |
1,150,193 |
|
|
13,775 |
|
|
2.42 |
% |
|
623,036 |
|
|
9,169 |
|
|
2.96 |
% |
|
Equity securities |
866 |
|
|
— |
|
|
— |
% |
|
57,175 |
|
|
123 |
|
|
0.43 |
% |
|
Interest-bearing deposits with banks |
1,086,241 |
|
|
638 |
|
|
0.12 |
% |
|
152,581 |
|
|
565 |
|
|
0.74 |
% |
|
FHLB stock |
14,971 |
|
|
322 |
|
|
4.34 |
% |
|
21,571 |
|
|
622 |
|
|
5.80 |
% |
|
Total investment securities(3) |
4,450,983 |
|
|
35,770 |
|
|
1.62 |
% |
|
2,174,767 |
|
|
27,798 |
|
|
2.57 |
% |
|
Total interest-earning assets |
14,475,096 |
|
|
262,592 |
|
|
3.66 |
% |
|
12,039,228 |
|
|
264,117 |
|
|
4.41 |
% |
| Non-interest-earning
assets |
1,232,196 |
|
|
|
|
|
|
1,219,440 |
|
|
|
|
|
|
Total assets |
$ |
15,707,292 |
|
|
|
|
|
|
$ |
13,258,668 |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
1,685,973 |
|
|
617 |
|
|
0.07 |
% |
|
$ |
1,321,679 |
|
|
843 |
|
|
0.13 |
% |
|
Savings accounts |
2,555,144 |
|
|
975 |
|
|
0.08 |
% |
|
2,074,377 |
|
|
2,753 |
|
|
0.27 |
% |
|
Money market accounts |
2,265,819 |
|
|
1,443 |
|
|
0.13 |
% |
|
1,861,268 |
|
|
4,004 |
|
|
0.43 |
% |
|
Certificates of deposit |
900,970 |
|
|
3,602 |
|
|
0.81 |
% |
|
1,121,270 |
|
|
7,844 |
|
|
1.41 |
% |
|
Total interest-bearing deposits |
7,407,906 |
|
|
6,637 |
|
|
0.18 |
% |
|
6,378,594 |
|
|
15,444 |
|
|
0.49 |
% |
|
Non-interest-bearing deposits |
5,861,941 |
|
|
— |
|
|
— |
% |
|
4,434,186 |
|
|
— |
|
|
— |
% |
|
Total deposits |
13,269,847 |
|
|
6,637 |
|
|
0.10 |
% |
|
10,812,780 |
|
|
15,444 |
|
|
0.29 |
% |
| Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
122,100 |
|
|
1,589 |
|
|
2.62 |
% |
|
280,901 |
|
|
3,048 |
|
|
2.18 |
% |
|
Other borrowings |
221,682 |
|
|
233 |
|
|
0.21 |
% |
|
205,253 |
|
|
354 |
|
|
0.35 |
% |
|
Junior subordinated debentures and subordinated notes |
247,944 |
|
|
4,412 |
|
|
3.59 |
% |
|
148,494 |
|
|
2,728 |
|
|
3.69 |
% |
|
Total borrowings |
591,726 |
|
|
6,234 |
|
|
2.12 |
% |
|
634,648 |
|
|
6,130 |
|
|
1.94 |
% |
|
Total funding liabilities |
13,861,573 |
|
|
12,871 |
|
|
0.19 |
% |
|
11,447,428 |
|
|
21,574 |
|
|
0.38 |
% |
| Other non-interest-bearing
liabilities(2) |
203,567 |
|
|
|
|
|
|
200,265 |
|
|
|
|
|
|
Total liabilities |
14,065,140 |
|
|
|
|
|
|
11,647,693 |
|
|
|
|
|
| Shareholders’ equity |
1,642,152 |
|
|
|
|
|
|
1,610,975 |
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
15,707,292 |
|
|
|
|
|
|
$ |
13,258,668 |
|
|
|
|
|
| Net interest income/rate
spread (tax equivalent) |
|
|
$ |
249,721 |
|
|
3.47 |
% |
|
|
|
$ |
242,543 |
|
|
4.03 |
% |
| Net interest margin (tax
equivalent) |
|
|
|
|
3.48 |
% |
|
|
|
|
|
4.05 |
% |
| Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
| Adjustments for taxable
equivalent basis |
|
|
(4,506 |
) |
|
|
|
|
|
(3,705 |
) |
|
|
| Net interest income and
margin, as reported |
|
|
$ |
245,215 |
|
|
3.42 |
% |
|
|
|
$ |
238,838 |
|
|
3.99 |
% |
| Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
|
|
1.30 |
% |
|
|
|
|
|
0.61 |
% |
| Return on average equity |
|
|
|
|
12.43 |
% |
|
|
|
|
|
5.05 |
% |
| Average equity/average
assets |
|
|
|
|
10.45 |
% |
|
|
|
|
|
12.15 |
% |
| Average interest-earning
assets/average interest-bearing liabilities |
|
|
` |
|
180.95 |
% |
|
|
|
|
|
171.66 |
% |
| Average interest-earning
assets/average funding liabilities |
|
|
|
|
104.43 |
% |
|
|
|
|
|
105.17 |
% |
| Non-interest income/average
assets |
|
|
|
|
0.60 |
% |
|
|
|
|
|
0.71 |
% |
| Non-interest expense/average
assets |
|
|
|
|
2.39 |
% |
|
|
|
|
|
2.79 |
% |
| Efficiency ratio(4) |
|
|
|
|
63.79 |
% |
|
|
|
|
|
64.40 |
% |
| Adjusted efficiency
ratio(5) |
|
|
|
|
61.75 |
% |
|
|
|
|
|
60.41 |
% |
|
(1) |
|
Average balances include loans accounted for on a nonaccrual basis
and 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 $2.5
million and $2.2 million for the six months ended June 30,
2021 and June 30, 2020, respectively. The tax equivalent yield
adjustment to interest earned on tax exempt securities was $2.0
million and $1.5 million for the six months ended June 30,
2021 and June 30, 2020, 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. These
represent non-GAAP financial measures. See the non-GAAP Financial
Measures on the final two pages of the press release tables. |
| |
|
|
| |
|
|
|
|
|
|
|
|
|
| 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. 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 |
|
Six Months Ended |
| |
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
|
Jun 30, 2021 |
|
Jun 30, 2020 |
|
Net interest income |
$ |
127,554 |
|
|
|
$ |
117,661 |
|
|
|
$ |
119,580 |
|
|
|
$ |
245,215 |
|
|
|
$ |
238,838 |
|
|
| Total non-interest income |
22,336 |
|
|
|
24,272 |
|
|
|
27,720 |
|
|
|
46,608 |
|
|
|
46,885 |
|
|
| Total revenue (GAAP) |
149,890 |
|
|
|
141,933 |
|
|
|
147,300 |
|
|
|
291,823 |
|
|
|
285,723 |
|
|
|
Exclude net gain on sale of securities |
(77 |
) |
|
|
(485 |
) |
|
|
(93 |
) |
|
|
(562 |
) |
|
|
(171 |
) |
|
|
Exclude net change in valuation of financial instruments carried at
fair value |
(58 |
) |
|
|
(59 |
) |
|
|
(2,199 |
) |
|
|
(117 |
) |
|
|
2,397 |
|
|
| Adjusted revenue
(non-GAAP) |
$ |
149,755 |
|
|
|
$ |
141,389 |
|
|
|
$ |
145,008 |
|
|
|
$ |
291,144 |
|
|
|
$ |
287,949 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| ADJUSTED
EARNINGS |
|
Quarters Ended |
|
Six Months Ended |
| |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
|
Jun 30, 2021 |
|
Jun 30, 2020 |
|
Net income (GAAP) |
|
$ |
54,382 |
|
|
|
$ |
46,855 |
|
|
|
$ |
23,541 |
|
|
|
$ |
101,237 |
|
|
|
$ |
40,423 |
|
|
|
Exclude net gain on sale of securities |
|
(77 |
) |
|
|
(485 |
) |
|
|
(93 |
) |
|
|
(562 |
) |
|
|
(171 |
) |
|
|
Exclude net change in valuation of financial instruments carried at
fair value |
|
(58 |
) |
|
|
(59 |
) |
|
|
(2,199 |
) |
|
|
(117 |
) |
|
|
2,397 |
|
|
|
Exclude merger and acquisition-related expenses |
|
79 |
|
|
|
571 |
|
|
|
336 |
|
|
|
650 |
|
|
|
1,478 |
|
|
|
Exclude COVID-19 expenses |
|
117 |
|
|
|
148 |
|
|
|
2,152 |
|
|
|
265 |
|
|
|
2,391 |
|
|
|
Exclude related net tax benefit |
|
(15 |
) |
|
|
(42 |
) |
|
|
(47 |
) |
|
|
(57 |
) |
|
|
(1,452 |
) |
|
| Total adjusted earnings
(non-GAAP) |
|
$ |
54,428 |
|
|
|
$ |
46,988 |
|
|
|
$ |
23,690 |
|
|
|
$ |
101,416 |
|
|
|
$ |
45,066 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share
(GAAP) |
|
$ |
1.56 |
|
|
|
$ |
1.33 |
|
|
|
$ |
0.67 |
|
|
|
$ |
2.88 |
|
|
|
$ |
1.14 |
|
|
| Diluted adjusted earnings per
share (non-GAAP) |
|
$ |
1.56 |
|
|
|
$ |
1.33 |
|
|
|
$ |
0.67 |
|
|
|
$ |
2.89 |
|
|
|
$ |
1.27 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
| ADJUSTED EFFICIENCY
RATIO |
|
Quarters Ended |
|
Six Months Ended |
| |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Jun 30, 2020 |
|
Jun 30, 2021 |
|
Jun 30, 2020 |
|
Non-interest expense (GAAP) |
|
$ |
92,624 |
|
|
|
$ |
93,527 |
|
|
|
$ |
90,542 |
|
|
|
$ |
186,151 |
|
|
|
$ |
184,005 |
|
|
|
Exclude merger and acquisition-related expenses |
|
(79 |
) |
|
|
(571 |
) |
|
|
(336 |
) |
|
|
(650 |
) |
|
|
(1,478 |
) |
|
|
Exclude COVID-19 expenses |
|
(117 |
) |
|
|
(148 |
) |
|
|
(2,152 |
) |
|
|
(265 |
) |
|
|
(2,391 |
) |
|
|
Exclude CDI amortization |
|
(1,711 |
) |
|
|
(1,711 |
) |
|
|
(2,002 |
) |
|
|
(3,422 |
) |
|
|
(4,003 |
) |
|
|
Exclude state/municipal tax expense |
|
(1,083 |
) |
|
|
(1,065 |
) |
|
|
(1,104 |
) |
|
|
(2,148 |
) |
|
|
(2,088 |
) |
|
|
Exclude REO operations |
|
(118 |
) |
|
|
242 |
|
|
|
(4 |
) |
|
|
124 |
|
|
|
(104 |
) |
|
| Adjusted non-interest expense
(non-GAAP) |
|
$ |
89,516 |
|
|
|
$ |
90,274 |
|
|
|
$ |
84,944 |
|
|
|
$ |
179,790 |
|
|
|
$ |
173,941 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Net interest income
(GAAP) |
|
$ |
127,554 |
|
|
|
$ |
117,661 |
|
|
|
$ |
119,580 |
|
|
|
$ |
245,215 |
|
|
|
$ |
238,838 |
|
|
| Non-interest income
(GAAP) |
|
22,336 |
|
|
|
24,272 |
|
|
|
27,720 |
|
|
|
46,608 |
|
|
|
46,885 |
|
|
| Total revenue |
|
149,890 |
|
|
|
141,933 |
|
|
|
147,300 |
|
|
|
291,823 |
|
|
|
285,723 |
|
|
|
Exclude net gain on sale of securities |
|
(77 |
) |
|
|
(485 |
) |
|
|
(93 |
) |
|
|
(562 |
) |
|
|
(171 |
) |
|
|
Exclude net change in valuation of financial instruments carried at
fair value |
|
(58 |
) |
|
|
(59 |
) |
|
|
(2,199 |
) |
|
|
(117 |
) |
|
|
2,397 |
|
|
| Adjusted revenue
(non-GAAP) |
|
$ |
149,755 |
|
|
|
$ |
141,389 |
|
|
|
$ |
145,008 |
|
|
|
$ |
291,144 |
|
|
|
$ |
287,949 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio (GAAP) |
|
61.79 |
|
% |
|
65.90 |
|
% |
|
61.47 |
|
% |
|
63.79 |
|
% |
|
64.40 |
|
% |
| Adjusted efficiency ratio
(non-GAAP) |
|
59.77 |
|
% |
|
63.85 |
|
% |
|
58.58 |
|
% |
|
61.75 |
|
% |
|
60.41 |
|
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| TANGIBLE COMMON
SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS |
|
Jun 30, 2021 |
|
Mar 31, 2021 |
|
Dec 31, 2020 |
|
Jun 30, 2020 |
|
Shareholders’ equity (GAAP) |
|
$ |
1,669,211 |
|
|
$ |
1,618,817 |
|
|
$ |
1,666,264 |
|
|
$ |
1,625,103 |
|
|
Exclude goodwill and other intangible assets, net |
|
391,125 |
|
|
392,836 |
|
|
394,547 |
|
|
398,276 |
|
| Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,278,086 |
|
|
$ |
1,225,981 |
|
|
$ |
1,271,717 |
|
|
$ |
1,226,827 |
|
| |
|
|
|
|
|
|
|
|
| Total assets (GAAP) |
|
$ |
16,181,857 |
|
|
$ |
16,119,792 |
|
|
$ |
15,031,623 |
|
|
$ |
14,405,607 |
|
|
Exclude goodwill and other intangible assets, net |
|
391,125 |
|
|
392,836 |
|
|
394,547 |
|
|
398,276 |
|
| Total tangible assets
(non-GAAP) |
|
$ |
15,790,732 |
|
|
$ |
15,726,956 |
|
|
$ |
14,637,076 |
|
|
$ |
14,007,331 |
|
| Common shareholders’ equity to
total assets (GAAP) |
|
10.32 |
% |
|
10.04 |
% |
|
11.09 |
% |
|
11.28 |
% |
| Tangible common shareholders’
equity to tangible assets (non-GAAP) |
|
8.09 |
% |
|
7.80 |
% |
|
8.69 |
% |
|
8.76 |
% |
| |
|
|
|
|
|
|
|
|
| TANGIBLE COMMON
SHAREHOLDERS’ EQUITY PER SHARE |
|
|
|
|
|
|
|
|
| Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,278,086 |
|
|
$ |
1,225,981 |
|
|
$ |
1,271,717 |
|
|
$ |
1,226,827 |
|
| Common shares outstanding at
end of period |
|
34,550,888 |
|
|
34,735,343 |
|
|
35,159,200 |
|
|
35,157,899 |
|
| Common shareholders’ equity
(book value) per share (GAAP) |
|
$ |
48.31 |
|
|
$ |
46.60 |
|
|
$ |
47.39 |
|
|
$ |
46.22 |
|
| Tangible common shareholders’
equity (tangible book value) per share (non-GAAP) |
|
$ |
36.99 |
|
|
$ |
35.29 |
|
|
$ |
36.17 |
|
|
$ |
34.89 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT: |
|
MARK J. GRESCOVICH,PRESIDENT & CEOPETER J. CONNER, CFO(509)
527-3636 |
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