Banner Corporation (Nasdaq:BANR), the parent company of Banner Bank
and Islanders Bank, today reported that it had a net loss of $4.9
million in the second quarter ended June 30, 2010, compared to a
net loss of $1.5 million in the immediately preceding quarter and a
net loss of $16.5 million in the second quarter a year ago.
"Our second quarter was highlighted by a successful capital
raise and a continued reduction in our deposit costs which
contributed to net interest margin expansion for the fourth
consecutive quarter," said D. Michael Jones, Chief Executive
Officer. "We are making a concerted effort to reduce the
overall cost of the deposit portfolio, and with our improved
liquidity position we are able to let higher cost funding,
primarily certificates of deposit and wholesale funds, run
off. Our deposit mix improvement reflects continuing growth in
customer relationships as a result of the determined efforts of our
staff and the further maturing of the expanded branch network we
have built over the past five years. Despite the current
difficult economic environment, we are optimistic that the strength
of this deposit franchise and our improved capital position will
provide the foundation for better operating results in future
periods."
In the second quarter, Banner paid a $1.6 million dividend on
the $124 million of senior preferred stock it issued to the U.S.
Treasury in the fourth quarter of 2008 in connection with its
participation in the Treasury's Capital Purchase Program. In
addition, Banner accrued $399,000 for related discount
accretion. Including the preferred stock dividend and related
accretion, the net loss to common shareholders was $6.9 million, or
$0.28 per share, for the second quarter of 2010, compared to a net
loss to common shareholders of $3.5 million, or $0.16 per share, in
the first quarter of 2010 and a net loss to common shareholders of
$18.4 million, or $1.04 per share, for the second quarter a year
ago.
For the first six months of 2010, Banner reported a net loss of
$6.5 million compared to a net loss of $25.8 million for the first
six months of 2009. For the most recent six month period, the
net loss to common shareholders was $0.44 per share, compared to a
net loss of $1.70 per share for the first six months of 2009.
Common Stock Offering
On June 30, 2010, Banner announced the completion of its
offering of 75,000,000 shares of its common stock and the sale of
an additional 3,500,000 shares pursuant to the partial exercise of
the underwriters' over-allotment option, at a price to the public
of $2.00 per share. On July 2, 2010, Banner announced the
completion of the capital raise as the underwriters had exercised
their over-allotment option for an additional 7,139,000 shares, at
a price to the public of $2.00 per share. Together with the
78,500,000 shares the Company issued on June 30, 2010 (including
3,500,000 shares issued pursuant to the underwriters' initial
exercise of their over-allotment option), Banner issued a total of
85,639,000 shares in the offering, resulting in net proceeds, after
deducting underwriting discounts and commissions and estimated
offering expenses, of approximately $161.6 million.
Banner intends to use a significant portion of the net proceeds
from the offering to strengthen Banner Bank's regulatory capital
ratios and to support managed growth. To that end, at June
30, 2010, the Company had invested $50 million as additional
paid-in common equity in Banner Bank. The Company expects to
use the remaining net proceeds for general working capital
purposes, including additional capital investments in its
subsidiary banks if appropriate.
Income Statement Review
"Continued reductions in our cost of funds through changes in
our deposit mix and reduced pricing pressures over the past year
resulted in further expansion of our net interest margin during the
second quarter of 2010 to 3.65%, an increase of four basis points
compared to the immediately preceding quarter and an increase of 41
basis points compared to the same quarter a year ago," said
Jones. "While loan yields have been relatively stable for a
number of quarters now, overall asset yields have declined slightly
primarily as a result of the growth of our on-balance-sheet
liquidity which is currently invested in short term instruments
that pay very low interest rates." Banner's net interest
margin was 3.65% for the second quarter, compared to 3.61% in the
preceding quarter and 3.24% in the second quarter a year
ago. For the first six months of 2010, Banner's net interest
margin was 3.62%, a 37 basis point improvement compared to the
first six months of 2009.
For the second quarter of 2010, funding costs decreased 13 basis
points compared to the previous quarter and 77 basis points from
the second quarter a year ago. Deposit costs decreased by 15
basis points compared to the preceding quarter and 82 basis points
compared to the second quarter a year earlier. Asset yields
decreased eight basis points from the prior linked quarter and 28
basis points from the second quarter a year ago. Loan yields
declined by two basis points compared to the preceding quarter, but
increased by five basis points from the second quarter a year
ago. Non-accruing loans reduced the margin by approximately 34
basis points in the second quarter of 2010 compared to
approximately 34 basis points in the preceding quarter and
approximately 45 basis points in the second quarter of
2009.
Net interest income before the provision for loan losses was
$38.9 million in the second quarter of 2010, compared to $38.2
million in the preceding quarter and $34.9 million in the second
quarter a year ago. In the first half of 2010, net interest
income before the provision for loan losses increased 10% to $77.1
million, compared to $69.9 million in the first half of
2009. Revenues from core operations* (net interest income
before the provision for loan losses plus total other operating
income excluding fair value and other-than-temporary impairment
(OTTI) adjustments) were $45.9 million in the second quarter of
2010, compared to $45.2 million in the first quarter of 2010 and
$43.9 million for the second quarter a year ago. Revenues from
core operations for the first half of 2010 increased 5% to $91.1
million, compared to $86.7 million in the first half of 2009.
Second quarter 2010 results included a net loss of $821,000
($525,000 after tax, or $0.02 loss per share) for fair value
adjustments as a result of changes in the valuation of financial
instruments carried at fair value, compared to a net gain (net of
OTTI charges) of $677,000 ($433,000 after tax, or $0.02 earnings
per share) in the first quarter of 2010 and a net gain (net of OTTI
charges) of $11.0 million ($7.0 million after tax, or $0.62
earnings per share) in the second quarter a year ago. There
were no OTTI charges in the second quarter of 2010, compared to
$1.2 million in the first quarter of 2010 and $162,000 in the
second quarter of 2009.
Total other operating income, which includes the changes in the
valuation of financial instruments noted above, was $6.2 million,
or $0.25 per share, in the second quarter of 2010, compared to $7.7
million, or $0.35 per share, in the preceding quarter and $20.0
million, or $1.13 per share, for the second quarter a year
ago. For the first half of 2010, total other operating income
was $13.9 million, compared to $24.6 million in the first half of
2009. Total other operating income from core operations*
(excluding fair value and OTTI adjustments) for the current quarter
was $7.0 million, unchanged from the preceding quarter, and was
$8.9 million for the second quarter a year ago. For the first
half of 2010, total other operating income from core operations was
$14.0 million, compared to $16.8 million in the first half of
2009. Income from deposit fees and other service charges
improved modestly to $5.6 million in the second quarter compared to
$5.2 million in the preceding quarter and $5.4 million in the
second quarter a year ago. Income from mortgage banking
operations decreased to $817,000 in the second quarter compared to
$948,000 in the preceding quarter and $2.9 million for the second
quarter a year ago.
"Our payment processing business continues to be adversely
affected by the soft economy, as activity for cardholders and
merchants remained lower than in periods before 2009," said
Jones. "However, we are encouraged by the improvement in
deposit fees and other service charges compared to the preceding
quarter, which in addition to reflecting account growth may be a
sign of improving economic conditions." By contrast, mortgage
banking revenues continued to decline, reflecting decreased
mortgage loan production despite the current very low level of
mortgage interest rates.
"We have made progress in improving our core operating
efficiency as compensation, occupancy and other manageable
operating expenses have been reduced over the past year," said
Jones. "Unfortunately, collection and legal costs, including
charges related to acquired real estate, continue to remain
high. We expect collection expenses and costs associated with
real estate to remain elevated for a number of future quarters as
we work down our inventory of non-performing assets."
Total other operating expenses, or non-interest expenses, were
$38.0 million in the second quarter of 2010, compared to $35.4
million in the preceding quarter and $36.9 million in the second
quarter a year ago. For the first half of the year, other
operating expenses were $73.4 million compared to $70.7 million in
the first half of 2009. Largely as the result of the increase
in REO and collection costs, operating expenses as a percentage of
average assets increased to 3.35% in the second quarter of 2010,
compared to 3.16% in the preceding quarter and 3.27% in the second
quarter a year ago.
*Earnings information excluding fair value adjustments
(alternately referred to as total other operating income from core
operation or revenues from core operations) 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 the
Company's core operations reflected in the current quarter's
results. Where applicable, the Company has also presented
comparable earnings information using GAAP financial measures.
Credit Quality
"The credit costs associated with this difficult economic
environment have been a persistent challenge throughout the past
several quarters and continue to drag on profitability," said
Jones. "The $16 million provision for loan losses in the
second quarter of the year, while less than in the second quarter a
year ago, remains high, reflecting still significant levels of
non-performing loans and net charge-offs. Charge-offs and
delinquencies continue to be concentrated in loans for the
construction of single-family homes and residential land
development projects. However, our exposure to single-family
home construction and development loans has continued to decline
and at June 30, 2010 was 11% of total loans outstanding. Our
reserve levels are substantial and both our impairment analysis and
charge-off actions reflect current appraisals and valuation
estimates. We remain hopeful that credit costs will moderate
during the remainder of 2010 and in 2011."
Banner recorded a $16.0 million provision for loan losses in the
second quarter, compared to $14.0 million in the preceding quarter
and $45.0 million in the second quarter a year ago. For the
first six months of 2010, the provision for loan losses was $30.0
million, compared to $67.0 million for the first six months of
2009. The allowance for loan losses at June 30, 2010 totaled
$95.5 million, representing 2.63% of total loans outstanding and
54% of non-performing loans. Non-performing loans totaled
$177.2 million at June 30, 2010, compared to $196.0 million in the
preceding quarter and $225.1 million at June 30,
2009. Banner's real estate owned and repossessed assets
totaled $101.7 million at June 30, 2010, compared to $95.2 million
three months earlier and $57.2 million a year ago. Net
charge-offs in the quarter totaled $16.2 million, or 0.44% of
average loans outstanding, compared to $13.5 million, or 0.36% of
average loans outstanding for the first quarter of 2010 and $34.0
million, or 0.87% of average loans outstanding for the second
quarter of last year. Non-performing assets totaled $282.4
million at June 30, 2010, compared to $294.2 million in the
preceding quarter and $282.3 million at June 30, 2009. At the
end of June, Banner's non-performing assets were 6.01% of total
assets, compared to 6.42% at the end of the preceding quarter and
6.23% a year ago.
The geographic distribution of construction, land and land
development loans, including residential and commercial properties,
was approximately $194 million, or 33%, in the greater Puget Sound
market, $208 million, or 36%, in the greater Portland, Oregon
market and $39 million, or 7%, in the greater Boise, Idaho market
as of June 30, 2010. The remaining $140 million, or 24%, was
distributed in the various eastern Washington, eastern Oregon and
northern Idaho markets served by Banner Bank. The geographic
distribution of non-performing construction, land and land
development loans and related real estate owned included
approximately $83 million, or 46%, in the greater Puget Sound
market, $64 million, or 35%, in the greater Portland market and $14
million, or 8%, in the greater Boise market, with the remaining $20
million, or 11%, distributed in the various eastern Washington,
eastern Oregon and northern Idaho markets served by Banner Bank.
One-to-four family residential construction, lot and land loans
were $411 million, or 11% of the total loan portfolio at June 30,
2010. Non-performing residential construction, lot and land
loans and related real estate owned were $155 million, or 55% of
non-performing assets at June 30, 2010.
Balance Sheet Review
"As we have substantially reduced our construction and land
development loans over the past year, our total loan balances
declined relative to a year ago; however, we did have encouraging
growth in commercial and agricultural business loans during the
quarter," said Jones. "At the end of June, our one-to-four
family construction loans totaled $183 million, a $154 million
reduction over the past year, including a $31 million decrease in
the most recent quarter. Our one-to-four family construction
loans have now declined by $472 million from their peak quarter-end
balance of $655 million at June 30, 2007. Similarly, total
construction, land and land development loans have declined by $654
million from their peak quarter-end balance of $1.24 billion, also
at June 30, 2007." Net loans were $3.54 billion at June 30,
2010, compared to $3.59 billion three months earlier and $3.82
billion at June 30, 2009.
Total assets were $4.70 billion at June 30, 2010, compared to
$4.58 billion at the end of the preceding quarter and $4.53 billion
a year ago. Deposits totaled $3.84 billion at June 30, 2010,
compared to $3.85 billion at the end of the preceding quarter and
$3.75 billion a year ago. Non-interest-bearing accounts were
$548.3 million at June 30, 2010, compared to $549.3 million at the
end of the preceding quarter and $508.3 million a year ago, a
year-over-year increase of 8%. At June 30, 2010,
interest-bearing transaction and savings accounts were $1.4
billion, which was unchanged from three months earlier but a $272.1
million increase compared to $1.1 billion a year ago, a
year-over-year increase of 24%.
"Banner's retail deposit franchise had another solid quarter and
has allowed us to steadily build our short-term liquidity and lower
our loans-to-deposits ratio, which was 95% at June 30, 2010," said
Jones. "In addition, this substantial core deposit growth has
led to our improved net interest margin and increased deposit fee
revenue."
Augmented by the recent stock offering, Banner Corporation and
its subsidiary banks continue to maintain capital levels
significantly in excess of the requirements to be categorized as
"well-capitalized" under applicable regulatory
standards. Banner Corporation's Tier 1 leverage capital to
average assets ratio was 13.02% and its total capital to
risk-weighted assets ratio was 17.12% at June 30,
2010. Importantly, reflecting the $50 million down-streamed
capital investment, Banner Bank's Tier 1 leverage ratio increased
to 10.77% at June 30, 2010.
Tangible stockholders' equity at June 30, 2010 was $544.1
million, including $118.2 million attributable to preferred stock,
compared to $397.1 million a year ago. Tangible book value per
common share was $4.15 at quarter-end. At June 30, 2010,
Banner had 102.7 million shares outstanding, compared to 18.2
million shares outstanding a year ago. Tangible common
stockholders' equity was $425.9 million at June 30, 2010, or 9.08%
of tangible assets, compared to $278.5 million, or 6.09% of
tangible assets at March 31, 2010 and $280.4 million, or 6.20% of
tangible assets at June 30, 2009.
Conference Call
Banner will host a conference call on Thursday, July 22, 2010,
at 8:00 a.m. PDT, to discuss second quarter 2010 results. The
conference call can be accessed live by telephone at 480-629-9772
to participate in the call. To listen to the call online, go
to the Company's website at www.bannerbank.com. A replay will
be available for a week at (303) 590-3030, using access code
4326727.
About the Company
Banner Corporation is a $4.7 billion bank holding company
operating two commercial banks in Washington, Oregon and
Idaho. Banner serves the Pacific Northwest region with 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.
This press release contains statements that the Company believes
are "forward-looking statements." These statements relate to the
Company's financial condition, results of operations, plans,
objectives, future performance or business. You should not place
undue reliance on these statements, as they are subject to risks
and uncertainties. When considering these forward-looking
statements, you should keep in mind these risks and uncertainties,
as well as any cautionary statements the Company may make.
Moreover, you should treat these statements as speaking only as of
the date they are made and based only on information then actually
known to the Company. There are a number of important factors that
could cause future results to differ materially from historical
performance and these forward-looking statements. Factors which
could cause actual results to differ materially include, but are
not limited to, the credit risks of lending activities, including
changes in the level and trend of loan delinquencies and write-offs
and changes in our allowance for loan losses and provision for loan
losses that may be impacted by deterioration in the housing and
commercial real estate markets; changes in general economic
conditions, either nationally or in our market areas; changes in
the levels of general interest rates and the relative differences
between short and long-term interest rates, deposit interest rates,
our net interest margin and funding sources; fluctuations in the
demand for loans, the number of unsold homes, land and other
properties and fluctuations in real estate values in our market
areas; secondary market conditions for loans and our ability to
sell loans in the secondary market; results of examinations of us
by the Board of Governors of the Federal Reserve System and of our
bank subsidiaries by the Federal Deposit Insurance Corporation, the
Washington State Department of Financial Institutions, Division of
Banks or other regulatory authorities, including the possibility
that any such regulatory authority may, among other things,
institute a formal or informal enforcement action against us or any
of the Banks which could require us to increase our reserve for
loan losses, write-down assets, change our regulatory capital
position or affect our ability to borrow funds or maintain or
increase deposits, which could adversely affect our liquidity and
earnings; our compliance with regulatory enforcement actions; the
requirements and restrictions that have been imposed upon Banner
and Banner Bank under the memoranda of understanding with the
Federal Reserve Bank of San Francisco (in the case of Banner) and
the FDIC and the Washington DFI (in the case of Banner Bank) and
the possibility that Banner and Banner Bank will be unable to fully
comply with the memoranda of understanding, which could result in
the imposition of additional requirements or restrictions;
legislative or regulatory changes that adversely affect our
business including changes in regulatory policies and principles,
or the interpretation of regulatory capital or other rules; our
ability to attract and retain deposits; further increases in
premiums for deposit insurance; our ability to control operating
costs and expenses; the use of estimates in determining fair value
of certain of our assets, which estimates may prove to be incorrect
or result in significant declines in valuation; staffing
fluctuations in response to product demand or the implementation of
corporate strategies that affect our workforce and potential
associated charges; the failure or security breach of computer
systems on which we depend; our ability to retain key members of
our senior management team; costs and effects of litigation,
including settlements and judgments; our ability to implement our
business strategies; our ability to successfully integrate any
assets, liabilities, customers, systems, and management personnel
we may acquire into our operations and our ability to realize
related revenue synergies and cost savings within expected time
frames and any goodwill charges related thereto; increased
competitive pressures among financial services companies; changes
in consumer spending, borrowing and savings habits; the
availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory actions; our ability to pay
dividends on our common and preferred stock and interest or
principal payments on our junior subordinated debentures; adverse
changes in the securities markets; inability of key third-party
providers to perform their obligations to us; changes in accounting
policies and practices, as may be adopted by the financial
institution regulatory agencies or the Financial Accounting
Standards Board including additional guidance and interpretation on
accounting issues and details of the implementation of new
accounting methods; war or terrorist activities; other economic,
competitive, governmental, regulatory, and technological factors
affecting our operations, pricing, products and services; future
legislative changes in the United States Department of
Treasury Troubled Asset Relief Program Capital Purchase
Program; and other risks detailed in Banner's reports filed with
the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the year ended December 31, 2009. We do not
undertake and specifically disclaim 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 risks could cause our actual results for 2010 and
beyond to differ materially from those expressed in any
forward-looking statements by, or on behalf of, us, and could
negatively affect our operating and stock price performance.
| RESULTS OF
OPERATIONS |
Quarters
Ended |
Six Months
Ended |
| (in thousands except shares and per share
data) |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Jun 30, 2010 |
Jun 30, 2009 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| INTEREST INCOME: |
|
|
|
|
|
| Loans receivable |
$52,473 |
$52,759 |
$55,500 |
$105,232 |
$111,847 |
| Mortgage-backed securities |
1,045 |
1,126 |
1,569 |
2,171 |
3,370 |
| Securities and cash
equivalents |
2,116 |
2,085 |
2,089 |
4,201 |
4,272 |
| |
55,634 |
55,970 |
59,158 |
111,604 |
119,489 |
| |
|
|
|
|
|
| INTEREST EXPENSE: |
|
|
|
|
|
| Deposits |
14,700 |
15,798 |
21,638 |
30,498 |
44,730 |
| Federal Home Loan Bank
advances |
320 |
361 |
675 |
681 |
1,395 |
| Other borrowings |
626 |
634 |
671 |
1,260 |
898 |
| Junior subordinated
debentures |
1,047 |
1,027 |
1,249 |
2,074 |
2,582 |
| |
16,693 |
17,820 |
24,233 |
34,513 |
49,605 |
| Net interest income before
provision for loan losses |
38,941 |
38,150 |
34,925 |
77,091 |
69,884 |
| |
|
|
|
|
|
| PROVISION FOR LOAN
LOSSES |
16,000 |
14,000 |
45,000 |
30,000 |
67,000 |
| Net interest income |
22,941 |
24,150 |
(10,075) |
47,091 |
2,884 |
| |
|
|
|
|
|
| OTHER OPERATING INCOME: |
|
|
|
|
|
| Deposit fees and other service
charges |
5,632 |
5,160 |
5,408 |
10,792 |
10,344 |
| Mortgage banking
operations |
817 |
948 |
2,860 |
1,765 |
5,575 |
| Loan servicing fees |
315 |
313 |
248 |
628 |
(22) |
| Miscellaneous |
243 |
626 |
412 |
869 |
932 |
| |
7,007 |
7,047 |
8,928 |
14,054 |
16,829 |
| Other-than-temporary impairment
losses |
-- |
(1,231) |
(162) |
(1,231) |
(162) |
| Net change in valuation of
financial instruments carried at fair value |
(821) |
1,908 |
11,211 |
1,087 |
7,958 |
| Total other operating
income |
6,186 |
7,724 |
19,977 |
13,910 |
24,625 |
| |
|
|
|
|
|
| OTHER OPERATING
EXPENSE: |
|
|
|
|
|
| Salary and employee
benefits |
16,793 |
16,559 |
17,528 |
33,352 |
35,129 |
| Less capitalized loan
origination costs |
(1,740) |
(1,605) |
(2,834) |
(3,345) |
(4,950) |
| Occupancy and equipment |
5,581 |
5,604 |
5,928 |
11,185 |
11,982 |
| Information / computer data
services |
1,594 |
1,506 |
1,599 |
3,100 |
3,133 |
| Payment and card processing
services |
1,683 |
1,424 |
1,555 |
3,107 |
3,008 |
| Professional services |
1,874 |
1,287 |
1,183 |
3,161 |
2,377 |
| Advertising and marketing |
1,742 |
1,950 |
2,207 |
3,692 |
4,039 |
| Deposit insurance |
2,209 |
2,132 |
4,102 |
4,341 |
5,599 |
| State/municipal business and
use taxes |
533 |
480 |
532 |
1,013 |
1,072 |
| Real estate operations |
4,166 |
3,058 |
1,805 |
7,224 |
2,428 |
| Amortization of core deposit
intangibles |
615 |
644 |
661 |
1,259 |
1,351 |
| Miscellaneous |
2,974 |
2,376 |
2,625 |
5,350 |
5,516 |
| |
|
|
|
|
|
| Total other operating
expense |
38,024 |
35,415 |
36,891 |
73,439 |
70,684 |
| |
|
|
|
|
|
| Income (loss) before provision
for (benefit from) income taxes |
(8,897) |
(3,541) |
(26,989) |
(12,438) |
(43,175) |
| |
|
|
|
|
|
| PROVISION FOR (BENEFIT FROM )
INCOME TAXES |
(3,951) |
(2,024) |
(10,478) |
(5,975) |
(17,401) |
| NET INCOME (LOSS) |
(4,946) |
(1,517) |
(16,511) |
(6,463) |
(25,774) |
| |
|
|
|
|
|
| PREFERRED STOCK DIVIDEND AND DISCOUNT
ACCRETION: |
|
|
|
|
|
| Preferred stock dividend |
1,550 |
1,550 |
1,550 |
3,100 |
3,100 |
| Preferred stock discount
accretion |
399 |
398 |
373 |
797 |
746 |
| |
|
|
|
|
|
| NET INCOME (LOSS) AVAILABLE TO COMMON
SHAREHOLDERS |
$(6,895) |
$(3,465) |
$(18,434) |
$(10,360) |
$(29,620) |
| |
|
|
|
|
|
| Earnings (loss) per share available to common
shareholder |
|
|
|
|
|
| Basic |
$(0.28) |
$(0.16) |
$(1.04) |
$(0.44) |
$(1.70) |
| Diluted |
$(0.28) |
$(0.16) |
$(1.04) |
$(0.44) |
$(1.70) |
| |
|
|
|
|
|
| Cumulative dividends declared per common
share |
$0.01 |
$0.01 |
$0.01 |
$0.02 |
$0.02 |
| |
|
|
|
|
|
| Weighted average common shares
outstanding |
|
|
|
|
|
| Basic |
24,452,356 |
22,131,671 |
17,746,051 |
23,298,424 |
17,454,542 |
| Diluted |
24,452,356 |
22,131,671 |
17,746,051 |
23,298,424 |
17,454,542 |
| |
|
|
|
|
|
| Common shares issued in connection with
exercise of stock options or DRIP |
1,353,589 |
1,561,559 |
780,906 |
2,915,148 |
1,274,420 |
| |
|
|
|
|
|
FINANCIAL CONDITION |
|
|
|
|
| (in thousands except shares and per share
data) |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Dec 31, 2009 |
| |
|
|
|
|
| |
|
|
|
|
| ASSETS |
|
|
|
|
| Cash and due from banks |
$67,322 |
$41,123 |
$81,559 |
$78,364 |
| Federal funds and interest-bearing
deposits |
369,864 |
236,629 |
2,699 |
244,641 |
| Securities - at fair value |
105,381 |
138,659 |
167,476 |
147,151 |
| Securities - available for sale |
140,342 |
96,718 |
50,980 |
95,667 |
| Securities - held to maturity |
73,632 |
73,555 |
77,321 |
74,834 |
| Federal Home Loan Bank stock |
37,371 |
37,371 |
37,371 |
37,371 |
| Loans receivable: |
|
|
|
|
| Held for sale |
4,819 |
4,398 |
8,377 |
4,497 |
| Held for portfolio |
3,626,685 |
3,684,459 |
3,904,704 |
3,785,624 |
| Allowance for loan losses |
(95,508) |
(95,733) |
(90,694) |
(95,269) |
| |
3,535,996 |
3,593,124 |
3,822,387 |
3,694,852 |
| |
|
|
|
|
| Accrued interest receivable |
16,930 |
18,501 |
18,892 |
18,998 |
| Real estate owned held for sale, net |
101,485 |
95,074 |
56,967 |
77,743 |
| Property and equipment, net |
99,536 |
101,541 |
103,709 |
103,542 |
| Other intangibles, net |
9,811 |
10,426 |
12,365 |
11,070 |
| Bank-owned life insurance |
55,477 |
55,125 |
53,341 |
54,596 |
| Other assets |
88,459 |
83,865 |
47,475 |
83,392 |
| |
$4,701,606 |
$4,581,711 |
$4,532,542 |
$4,722,221 |
| |
|
|
|
|
| LIABILITIES |
|
|
|
|
| Deposits: |
|
|
|
|
| Non-interest-bearing |
$548,251 |
$549,291 |
$508,284 |
$582,480 |
| Interest-bearing transaction
and savings accounts |
1,403,231 |
1,404,301 |
1,131,093 |
1,341,145 |
| Interest-bearing
certificates |
1,887,513 |
1,896,186 |
2,110,466 |
1,941,925 |
| |
3,838,995 |
3,849,778 |
3,749,843 |
3,865,550 |
| |
|
|
|
|
| Advances from Federal Home Loan Bank at fair
value |
47,003 |
62,108 |
115,946 |
189,779 |
| Customer repurchase agreements and other
borrowings |
172,737 |
177,244 |
158,249 |
176,842 |
| Junior subordinated debentures at fair
value |
49,808 |
48,147 |
49,563 |
47,694 |
| |
|
|
|
|
| Accrued expenses and other
liabilities |
25,440 |
24,049 |
36,652 |
24,020 |
| Deferred compensation |
13,665 |
13,661 |
12,815 |
13,208 |
| |
4,147,648 |
4,174,987 |
4,123,068 |
4,317,093 |
| |
|
|
|
|
| STOCKHOLDERS'
EQUITY |
|
|
|
|
| Preferred stock - Series A |
118,204 |
117,805 |
116,661 |
117,407 |
| Common stock |
490,119 |
335,877 |
322,582 |
331,538 |
| Retained earnings (accumulated deficit) |
(53,768) |
(45,775) |
(27,826) |
(42,077) |
| Other components of stockholders' equity |
(597) |
(1,183) |
(1,943) |
(1,740) |
| |
|
|
|
|
| |
553,958 |
406,724 |
409,474 |
405,128 |
| |
$4,701,606 |
$4,581,711 |
$4,532,542 |
$4,722,221 |
| |
|
|
|
|
| Common Shares Issued: |
|
|
|
|
| Shares outstanding at end of period |
102,954,738 |
23,101,149 |
18,426,458 |
21,539,590 |
| Less unearned ESOP shares at
end of period |
240,381 |
240,381 |
240,381 |
240,381 |
| |
|
|
|
|
| Shares outstanding at end of period excluding
unearned ESOP shares |
102,714,357 |
22,860,768 |
18,186,077 |
21,299,209 |
| |
|
|
|
|
| Common stockholders' equity per share
(1) |
$4.24 |
$12.64 |
$16.10 |
$13.51 |
| Common stockholders' tangible equity per
share (1) (2) |
$4.15 |
$12.18 |
$15.42 |
$12.99 |
| |
|
|
|
|
| Tangible common stockholders' equity to
tangible assets |
9.08% |
6.09% |
6.20% |
5.87% |
| Consolidated Tier 1 leverage capital
ratio |
13.02% |
9.76% |
9.90% |
9.62% |
| |
|
|
|
|
| (1) -
Calculation is based on number of common shares outstanding at the
end of the period rather than weighted average shares outstanding
and excludes unallocated shares in the ESOP. |
|
| (2) - Tangible
common equity excludes preferred stock, goodwill, core deposit and
other intangibles. |
|
|
| |
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
| |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Dec 31, 2009 |
|
| LOANS (including loans held for
sale): |
|
|
|
|
|
| Commercial real estate |
|
|
|
|
|
| Owner occupied |
$503,796 |
$515,542 |
$475,749 |
$509,464 |
|
| Investment properties |
553,689 |
557,134 |
574,172 |
573,495 |
|
| Multifamily real estate |
149,980 |
147,659 |
150,168 |
153,497 |
|
| Commercial construction |
84,379 |
83,879 |
90,762 |
80,236 |
|
| Multifamily construction |
56,573 |
61,924 |
56,968 |
57,422 |
|
| One- to four-family construction |
182,928 |
213,438 |
337,368 |
239,135 |
|
| Land and land development |
|
|
|
|
|
| Residential |
228,156 |
256,607 |
371,247 |
284,331 |
|
| Commercial |
29,410 |
48,194 |
32,450 |
43,743 |
|
| Commercial business |
635,130 |
616,396 |
678,273 |
637,823 |
|
| Agricultural business including secured by
farmland |
208,815 |
187,207 |
215,339 |
205,307 |
|
| One- to four-family real estate |
702,420 |
697,565 |
653,513 |
703,277 |
|
| Consumer |
103,065 |
109,092 |
91,173 |
110,937 |
|
| Consumer secured by one- to four-family real
estate |
193,163 |
194,220 |
185,899 |
191,454 |
|
| |
|
|
|
|
|
| Total loans outstanding |
$3,631,504 |
$3,688,857 |
$3,913,081 |
$3,790,121 |
|
| |
|
|
|
|
|
| Restructured loans performing under their
restructured terms |
$43,899 |
$45,471 |
$55,031 |
$43,683 |
|
| |
|
|
|
|
|
| Loans 30 - 89 days past due and on
accrual |
$25,853 |
$51,328 |
$34,038 |
$34,156 |
|
| |
|
|
|
|
|
| Total delinquent loans (including loans on
non-accrual) |
$203,097 |
$247,338 |
$259,107 |
$248,006 |
|
| |
|
|
|
|
|
| Total delinquent loans / Total
loans outstanding |
5.59% |
6.71% |
6.62% |
6.54% |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| GEOGRAPHIC CONCENTRATION
OF LOANS AT |
|
|
|
|
| June 30,
2010 |
Washington |
Oregon |
Idaho |
Other |
Total |
| |
|
|
|
|
|
| Commercial real estate |
|
|
|
|
|
| Owner occupied |
$390,085 |
$64,642 |
$45,491 |
$3,578 |
$503,796 |
| Investment properties |
397,813 |
107,790 |
41,669 |
6,417 |
553,689 |
| Multifamily real estate |
123,707 |
12,177 |
9,580 |
4,516 |
149,980 |
| Commercial construction |
61,202 |
11,689 |
11,488 |
-- |
84,379 |
| Multifamily construction |
28,324 |
28,249 |
-- |
-- |
56,573 |
| One- to four-family construction |
87,895 |
84,796 |
10,237 |
-- |
182,928 |
| Land and land development |
|
|
|
|
|
| Residential |
119,268 |
86,619 |
22,269 |
-- |
228,156 |
| Commercial |
25,807 |
1,144 |
2,459 |
-- |
29,410 |
| Commercial business |
447,545 |
97,569 |
71,344 |
18,672 |
635,130 |
| Agricultural business including secured by
farmland |
112,674 |
39,266 |
56,875 |
-- |
208,815 |
| One- to four-family real estate |
458,681 |
213,069 |
28,241 |
2,429 |
702,420 |
| Consumer |
74,522 |
22,860 |
5,683 |
-- |
103,065 |
| Consumer secured by one- to four-family real
estate |
136,559 |
41,598 |
14,506 |
500 |
193,163 |
| |
|
|
|
|
|
| Total loans outstanding |
$2,464,082 |
$811,468 |
$319,842 |
$36,112 |
$3,631,504 |
| |
|
|
|
|
|
| Percent of total loans |
67.9% |
22.3% |
8.8% |
1.0% |
100.0% |
| |
|
|
|
|
|
| DETAIL OF LAND AND LAND
DEVELOPMENT LOANS AT |
|
|
|
|
| June 30,
2010 |
Washington |
Oregon |
Idaho |
Other |
Total |
| |
|
|
|
|
|
| Residential |
|
|
|
|
|
| Acquisition &
development |
$53,196 |
$52,154 |
$6,219 |
$-- |
$111,569 |
| Improved lots |
43,863 |
27,027 |
1,568 |
-- |
72,458 |
| Unimproved land |
22,209 |
7,438 |
14,482 |
-- |
44,129 |
| |
|
|
|
|
|
| Total residential land and
development |
$119,268 |
$86,619 |
$22,269 |
$-- |
$228,156 |
| Commercial & industrial |
|
|
|
|
|
| Acquisition &
development |
$5,896 |
$-- |
$559 |
$-- |
$6,455 |
| Improved land |
8,857 |
-- |
-- |
-- |
8,857 |
| Unimproved land |
11,054 |
1,144 |
1,900 |
-- |
14,098 |
| |
|
|
|
|
|
| Total commercial land and
development |
$25,807 |
$1,144 |
$2,459 |
$-- |
$29,410 |
| |
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
| |
|
|
|
|
|
| |
Quarters
Ended |
Six Months
Ended |
| CHANGE IN THE |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Jun 30, 2010 |
Jun 30, 2009 |
| ALLOWANCE FOR LOAN
LOSSES |
|
|
|
|
|
| |
|
|
|
|
|
| Balance, beginning of period |
$95,733 |
$95,269 |
$79,724 |
$95,269 |
$75,197 |
| |
|
|
|
|
|
| Provision |
16,000 |
14,000 |
45,000 |
30,000 |
67,000 |
| |
|
|
|
|
|
| Recoveries of loans previously charged
off: |
|
|
|
|
|
| Commercial real estate |
-- |
-- |
-- |
-- |
-- |
| Multifamily real estate |
-- |
-- |
-- |
-- |
-- |
| Construction and land |
235 |
387 |
266 |
622 |
318 |
| One- to four-family real
estate |
71 |
-- |
89 |
71 |
91 |
| Commercial business |
595 |
1,290 |
249 |
1,885 |
319 |
| Agricultural business,
including secured by farmland |
-- |
-- |
22 |
-- |
22 |
| Consumer |
69 |
59 |
32 |
128 |
63 |
| |
970 |
1,736 |
658 |
2,706 |
813 |
| Loans charged off: |
|
|
|
|
|
| Commercial real estate |
-- |
(92) |
-- |
(92) |
-- |
| Multifamily real estate |
-- |
-- |
-- |
-- |
-- |
| Construction and land |
(12,255) |
(7,724) |
(25,767) |
(19,979) |
(38,184) |
| One- to four-family real
estate |
(2,128) |
(2,115) |
(2,704) |
(4,243) |
(3,795) |
| Commercial business |
(1,447) |
(4,784) |
(2,438) |
(6,231) |
(6,232) |
| Agricultural business,
including secured by farmland |
(986) |
(2) |
(3,186) |
(988) |
(3,186) |
| Consumer |
(379) |
(555) |
(593) |
(934) |
(919) |
| |
(17,195) |
(15,272) |
(34,688) |
(32,467) |
(52,316) |
| Net charge-offs |
(16,225) |
(13,536) |
(34,030) |
(29,761) |
(51,503) |
| |
|
|
|
|
|
| Balance, end of period |
$95,508 |
$95,733 |
$90,694 |
$95,508 |
$90,694 |
| |
|
|
|
|
|
| Net charge-offs / Average loans
outstanding |
0.44% |
0.36% |
0.87% |
0.80% |
1.31% |
| |
|
|
|
|
|
| |
|
|
|
|
|
| ALLOCATION OF |
|
|
|
|
|
| ALLOWANCE FOR LOAN
LOSSES |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Dec 31, 2009 |
|
| Specific or allocated loss allowance |
|
|
|
|
|
| Commercial real estate |
$7,044 |
$8,279 |
$5,333 |
$8,278 |
|
| Multifamily real estate |
4,993 |
2,072 |
83 |
90 |
|
| Construction and land |
42,972 |
44,078 |
55,585 |
45,209 |
|
| One- to four-family real
estate |
3,530 |
3,093 |
1,333 |
2,912 |
|
| Commercial business |
23,907 |
24,530 |
19,474 |
22,054 |
|
| Agricultural business,
including secured by farmland |
679 |
949 |
1,323 |
919 |
|
| Consumer |
1,895 |
1,898 |
1,540 |
1,809 |
|
| |
|
|
|
|
|
| Total allocated |
85,020 |
84,899 |
84,671 |
81,271 |
|
| |
|
|
|
|
|
| Estimated allowance for undisbursed
commitments |
909 |
1,161 |
1,976 |
1,594 |
|
| Unallocated |
9,579 |
9,673 |
4,047 |
12,404 |
|
| |
|
|
|
|
|
| Total allowance for loan
losses |
$95,508 |
$95,733 |
$90,694 |
$95,269 |
|
| |
|
|
|
|
|
| Allowance for loan losses / Total
loans outstanding |
2.63% |
2.60% |
2.32% |
2.51% |
|
| |
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
| |
|
|
|
|
|
| |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Dec 31, 2009 |
|
| |
|
|
|
|
|
| NON-PERFORMING
ASSETS |
|
|
|
|
|
| |
|
|
|
|
|
| Loans on non-accrual status |
|
|
|
|
|
| Secured by real estate: |
|
|
|
|
|
| Commercial |
$8,815 |
$6,801 |
$7,244 |
$7,300 |
|
| Multifamily |
363 |
373 |
-- |
383 |
|
| Construction and land |
110,931 |
138,245 |
180,989 |
159,264 |
|
| One- to four-family |
19,878 |
19,777 |
15,167 |
14,614 |
|
| Commercial business |
23,474 |
19,353 |
10,508 |
21,640 |
|
| Agricultural business,
including secured by farmland |
7,556 |
8,013 |
7,478 |
6,277 |
|
| Consumer |
3,508 |
3,387 |
2,058 |
3,923 |
|
| |
174,525 |
195,949 |
223,444 |
213,401 |
|
| |
|
|
|
|
|
| Loans more than 90 days delinquent, still on
accrual |
|
|
|
|
|
| Secured by real estate: |
|
|
|
|
|
| Commercial |
1,137 |
-- |
-- |
-- |
|
| Multifamily |
-- |
-- |
-- |
-- |
|
| Construction and land |
692 |
-- |
603 |
-- |
|
| One- to four-family |
772 |
-- |
624 |
358 |
|
| Commercial business |
-- |
-- |
209 |
-- |
|
| Agricultural business,
including secured by farmland |
-- |
-- |
-- |
-- |
|
| Consumer |
118 |
61 |
189 |
91 |
|
| |
2,719 |
61 |
1,625 |
449 |
|
| Total non-performing loans |
177,244 |
196,010 |
225,069 |
213,850 |
|
| Securities on non-accrual |
3,500 |
3,000 |
-- |
4,232 |
|
| Real estate owned (REO) and repossessed
assets |
101,701 |
95,167 |
57,197 |
77,802 |
|
| |
|
|
|
|
|
| Total non-performing
assets |
282,445 |
294,177 |
282,266 |
295,884 |
|
| |
|
|
|
|
|
| Total non-performing assets / Total
assets |
6.01% |
6.42% |
6.23% |
6.27% |
|
| |
|
|
|
|
|
| DETAIL & GEOGRAPHIC CONCENTRATION
OF |
|
|
|
|
|
| NON-PERFORMING ASSETS
AT |
|
|
|
|
|
| June 30,
2010 |
Washington |
Oregon |
Idaho |
Other |
Total |
| Secured by real estate: |
|
|
|
|
|
| Commercial |
$8,870 |
$744 |
$338 |
$-- |
$9,952 |
| Multifamily |
363 |
-- |
-- |
-- |
363 |
| Construction and land |
|
|
|
|
|
| One- to four-family
construction |
10,966 |
6,978 |
5,568 |
-- |
23,512 |
| Commercial construction |
1,551 |
-- |
-- |
-- |
1,551 |
| Multifamily construction |
9,280 |
-- |
-- |
-- |
9,280 |
| Residential land acquisition
& development |
30,076 |
16,765 |
898 |
-- |
47,739 |
| Residential land improved
lots |
3,771 |
9,610 |
317 |
-- |
13,698 |
| Residential land
unimproved |
10,644 |
348 |
321 |
-- |
11,313 |
| Commercial land acquisition
& development |
-- |
-- |
-- |
-- |
-- |
| Commercial land improved |
454 |
-- |
-- |
-- |
454 |
| Commercial land unimproved |
4,076 |
-- |
-- |
-- |
4,076 |
| Total construction and
land |
70,818 |
33,701 |
7,104 |
-- |
111,623 |
| One- to four-family |
13,068 |
7,582 |
-- |
-- |
20,650 |
| Commercial business |
14,117 |
4,424 |
958 |
3,975 |
23,474 |
| Agricultural business, including secured by
farmland |
1,775 |
569 |
5,212 |
-- |
7,556 |
| Consumer |
3,342 |
42 |
242 |
-- |
3,626 |
| Total non-performing loans |
112,353 |
47,062 |
13,854 |
3,975 |
177,244 |
| Securities on non-accrual |
3,250 |
-- |
250 |
-- |
3,500 |
| Real estate owned (REO) and repossessed
assets |
45,199 |
40,277 |
16,225 |
-- |
101,701 |
| |
|
|
|
|
|
| Total non-performing
assets at end of the period |
$160,802 |
$87,339 |
$30,329 |
$3,975 |
$282,445 |
| |
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
| |
|
|
|
|
|
| |
Quarters
Ended |
Six Months
Ended |
|
| |
|
|
|
|
|
| REAL ESTATE OWNED |
Jun 30, 2010 |
Jun 30, 2009 |
Jun 30, 2010 |
Jun 30, 2009 |
|
| |
|
|
|
|
|
| Balance, beginning of period |
$95,074 |
$38,951 |
$77,743 |
$21,782 |
|
| Additions for loan
foreclosures |
17,966 |
32,863 |
45,293 |
52,038 |
|
| Additions from capitalized
costs |
380 |
1,624 |
1,516 |
2,663 |
|
| Dispositions of REO |
(10,451) |
(16,112) |
(20,366) |
(19,206) |
|
| Gain (loss) on sale of REO |
(660) |
(296) |
(1,361) |
(197) |
|
| Valuation adjustments in the
period |
(824) |
(63) |
(1,340) |
(113) |
|
| |
|
|
|
|
|
| Balance, end of period |
$101,485 |
$56,967 |
$101,485 |
$56,967 |
|
| |
|
|
|
|
|
| |
Quarters
Ended |
| |
|
|
|
|
|
| REAL ESTATE OWNED- FIVE
COMPARATIVE QUARTERS |
Jun 30, 2010 |
Mar 31, 2010 |
Dec 31, 2009 |
Sep 30, 2009 |
Jun 30, 2009 |
| |
|
|
|
|
|
| Balance, beginning of period |
$95,074 |
$77,743 |
$53,576 |
$56,967 |
$38,951 |
| Additions for loan
foreclosures |
17,966 |
27,327 |
39,802 |
10,013 |
32,863 |
| Additions from capitalized
costs |
380 |
1,136 |
1,712 |
1,689 |
1,624 |
| Dispositions of REO |
(10,451) |
(9,915) |
(10,064) |
(13,439) |
(16,112) |
| Transfers to property and
equipment |
-- |
-- |
(7,030) |
-- |
-- |
| Gain (loss) on sale of REO |
(660) |
(701) |
(189) |
(188) |
(296) |
| Valuation adjustments in the
period |
(824) |
(516) |
(64) |
(1,466) |
(63) |
| |
|
|
|
|
|
| Balance, end of period |
$101,485 |
$95,074 |
$77,743 |
$53,576 |
$56,967 |
| |
|
|
|
|
|
| REAL ESTATE OWNED- BY TYPE AND
STATE |
Washington |
Oregon |
Idaho |
Total |
|
| |
|
|
|
|
|
| Commercial real estate |
$8,349 |
$-- |
$-- |
$8,349 |
|
| One- to four-family construction |
891 |
1,190 |
-- |
2,081 |
|
| Land development- commercial |
3,430 |
6,656 |
485 |
10,571 |
|
| Land development- residential |
22,681 |
24,579 |
9,731 |
56,991 |
|
| Agricultural land |
329 |
-- |
2,236 |
2,565 |
|
| One- to four-family real estate |
9,354 |
7,801 |
3,773 |
20,928 |
|
| |
|
|
|
|
|
| Total |
$45,034 |
$40,226 |
$16,225 |
$101,485 |
|
| |
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
| (dollars in thousands) |
|
|
|
|
| |
|
|
|
|
| DEPOSITS & OTHER
BORROWINGS |
|
|
|
|
| |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Dec 31, 2009 |
| DEPOSIT
COMPOSITION |
|
|
|
|
| |
|
|
|
|
| Non-interest-bearing |
$548,251 |
$549,291 |
$508,284 |
$582,480 |
| |
|
|
|
|
| Interest-bearing checking |
368,418 |
366,786 |
312,024 |
360,256 |
| Regular savings accounts |
593,591 |
577,704 |
499,447 |
538,765 |
| Money market accounts |
441,222 |
459,811 |
319,622 |
442,124 |
| |
|
|
|
|
| Interest-bearing transaction
& savings accounts |
1,403,231 |
1,404,301 |
1,131,093 |
1,341,145 |
| |
|
|
|
|
| Interest-bearing
certificates |
1,887,513 |
1,896,186 |
2,110,466 |
1,941,925 |
| |
|
|
|
|
| Total deposits |
$3,838,995 |
$3,849,778 |
$3,749,843 |
$3,865,550 |
| |
|
|
|
|
| |
|
|
|
|
| INCLUDED IN TOTAL
DEPOSITS |
|
|
|
|
| |
|
|
|
|
| Public transaction
accounts |
$85,292 |
$80,942 |
$48,644 |
$78,202 |
| Public interest-bearing
certificates |
81,668 |
82,362 |
134,213 |
88,186 |
| |
|
|
|
|
| Total public deposits |
$166,960 |
$163,304 |
$182,857 |
$166,388 |
| |
|
|
|
|
| |
|
|
|
|
| Total brokered deposits |
$145,571 |
$150,577 |
$249,619 |
$165,016 |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| INCLUDED IN OTHER
BORROWINGS |
|
|
|
|
| Customer repurchase agreements
/ "Sweep accounts" |
$122,755 |
$126,954 |
$108,277 |
$124,330 |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| GEOGRAPHIC
CONCENTRATION OF DEPOSITS AT |
|
|
|
|
| June 30,
2010 |
Washington |
Oregon |
Idaho |
Total |
| |
|
|
|
|
| |
$2,943,408 |
$615,790 |
$279,797 |
$3,838,995 |
| |
|
|
|
|
| |
|
|
Minimum for Capital
Adequacy |
| REGULATORY CAPITAL RATIOS
AT |
Actual |
or "Well
Capitalized" |
| June 30,
2010 |
Amount |
Ratio |
Amount |
Ratio |
| |
|
|
|
|
| Banner Corporation-consolidated |
|
|
|
|
| Total capital to risk-weighted
assets |
$639,089 |
17.12% |
$298,716 |
8.00% |
| Tier 1 capital to risk-weighted
assets |
591,812 |
15.85% |
149,358 |
4.00% |
| Tier 1 leverage capital to
average assets |
591,812 |
13.02% |
181,816 |
4.00% |
| |
|
|
|
|
| Banner Bank |
|
|
|
|
| Total capital to risk-weighted
assets |
512,933 |
14.44% |
355,137 |
10.00% |
| Tier 1 capital to risk-weighted
assets |
467,936 |
13.18% |
213,082 |
6.00% |
| Tier 1 leverage capital to
average assets |
467,936 |
10.77% |
217,307 |
5.00% |
| |
|
|
|
|
| Islanders Bank |
|
|
|
|
| Total capital to risk-weighted
assets |
28,046 |
13.68% |
20,497 |
10.00% |
| Tier 1 capital to risk-weighted
assets |
25,942 |
12.66% |
12,298 |
6.00% |
| Tier 1 leverage capital to
average assets |
25,942 |
11.94% |
10,861 |
5.00% |
| |
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
| (rates / ratios annualized) |
|
|
|
|
|
| |
Quarters
Ended |
Six Months
Ended |
| |
|
|
|
|
|
| OPERATING
PERFORMANCE |
Jun 30, 2010 |
Mar 31, 2010 |
Jun 30, 2009 |
Jun 30, 2010 |
Jun 30, 2009 |
| |
|
|
|
|
|
| Average loans |
$3,677,140 |
$3,726,243 |
$3,925,196 |
$3,701,552 |
$3,934,002 |
| Average securities and deposits |
607,643 |
563,562 |
394,244 |
587,014 |
398,856 |
| Average non-interest-earning assets |
268,864 |
258,060 |
199,981 |
262,193 |
196,604 |
| |
|
|
|
|
|
| Total average assets |
$4,553,647 |
$4,547,865 |
$4,519,421 |
$4,550,759 |
$4,529,462 |
| |
|
|
|
|
|
| Average deposits |
$3,830,659 |
$3,800,888 |
$3,679,653 |
$3,815,798 |
$3,686,455 |
| Average borrowings |
349,997 |
373,192 |
429,708 |
361,578 |
423,359 |
| Average non-interest-bearing liabilities |
(38,527) |
(36,459) |
(18,421) |
(37,498) |
(13,201) |
| |
|
|
|
|
|
| Total average liabilities |
4,142,129 |
4,137,621 |
4,090,940 |
4,139,878 |
4,096,613 |
| |
|
|
|
|
|
| Total average stockholders' equity |
411,518 |
410,244 |
428,481 |
410,881 |
432,849 |
| |
` |
|
|
|
|
| Total average liabilities and
equity |
$4,553,647 |
$4,547,865 |
$4,519,421 |
$4,550,759 |
$4,529,462 |
| |
|
|
|
|
|
| Interest rate yield on loans |
5.72% |
5.74% |
5.67% |
5.73% |
5.73% |
| Interest rate yield on securities and
deposits |
2.09% |
2.31% |
3.72% |
2.19% |
3.86% |
| |
|
|
|
|
|
| Interest rate yield on
interest-earning assets |
5.21% |
5.29% |
5.49% |
5.25% |
5.56% |
| |
|
|
|
|
|
| Interest rate expense on deposits |
1.54% |
1.69% |
2.36% |
1.61% |
2.45% |
| Interest rate expense on borrowings |
2.28% |
2.20% |
2.42% |
2.24% |
2.32% |
| |
|
|
|
|
|
| Interest rate expense on
interest-bearing liabilities |
1.60% |
1.73% |
2.37% |
1.67% |
2.43% |
| |
|
|
|
|
|
| Interest rate spread |
3.61% |
3.56% |
3.12% |
3.58% |
3.13% |
| |
|
|
|
|
|
| Net interest margin |
3.65% |
3.61% |
3.24% |
3.62% |
3.25% |
| |
|
|
|
|
|
| Other operating income / Average assets |
0.54% |
0.69% |
1.77% |
0.62% |
1.10% |
| |
|
|
|
|
|
| Other Operating income (loss) EXCLUDING
change in valuation of financial instruments carried at fair value
/ Average assets (1) |
0.62% |
0.52% |
0.78% |
0.57% |
0.74% |
| |
|
|
|
|
|
| Other operating expense / Average assets |
3.35% |
3.16% |
3.27% |
3.25% |
3.15% |
| |
|
|
|
|
|
| Efficiency ratio (other operating expense /
revenue) |
84.26% |
77.20% |
67.19% |
80.70% |
74.79% |
| |
|
|
|
|
|
| Return (Loss) on average assets |
(0.44%) |
(0.14%) |
(1.47%) |
(0.29%) |
(1.15%) |
| |
|
|
|
|
|
| Return (Loss) on average equity |
(4.82%) |
(1.50%) |
(15.46%) |
(3.17%) |
(12.01%) |
| |
|
|
|
|
|
| Return (Loss) on average tangible equity
(2) |
(4.94%) |
(1.54%) |
(15.93%) |
(3.25%) |
(12.38%) |
| |
|
|
|
|
|
| Average equity / Average
assets |
9.04% |
9.02% |
9.48% |
9.03% |
9.56% |
| |
|
|
|
|
|
| (1) - Earnings
information excluding the fair value adjustments and goodwill
impairment charge (alternately referred to as operating income
(loss) from core operations and expenses from core operations)
represent non-GAAP (Generally Accepted Accounting Principles)
financial measures. |
|
| (2) - Average
tangible equity excludes goodwill, core deposit and other
intangibles |
|
|
|
|
CONTACT: Banner Corporation
D. Michael Jones, CEO
Mark J. Grescovich, President
Lloyd W. Baker, CFO
(509) 527-3636
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