Banner Corporation (NASDAQ GSM:BANR), the parent company of Banner
Bank and Islanders Bank, today reported continued strong revenue
generation contributed to solid fourth quarter and full year 2016
operating results. Net income in the fourth quarter of 2016
was $22.8 million, or $0.69 per diluted share, compared to $23.9
million, or $0.70 per diluted share, in the preceding quarter and
$6.9 million, or $0.20 per diluted share, in the fourth quarter a
year ago. The current quarter results were impacted by
$788,000 of acquisition-related expenses which, net of tax benefit,
reduced net income by $0.02 per diluted share. The results
for the preceding quarter included $1.7 million of
acquisition-related expenses which, net of tax benefit, reduced net
income by $0.03 per diluted share, while operating results in the
fourth quarter a year ago included $18.4 million of
acquisition-related expenses which, net of tax benefit, reduced net
income by $0.37 per diluted share.
For the year ended December 31, 2016, net income
increased to $85.4 million, or $2.52 per diluted share, compared to
$45.2 million, or $1.89 per diluted share, for the year ended
December 31, 2015. Acquisition-related expenses were $11.7
million (or $0.22, net of tax, per diluted share) for 2016,
compared to $26.1 million (or $0.76, net of tax, per diluted share)
for 2015.
“Our 2016 operating performance continued to
reflect the success of our proven client acquisition, balance sheet
management and product pricing strategies, which produced solid
core revenue and additional core deposit growth,” stated Mark J.
Grescovich, President and Chief Executive Officer. “We also
benefited from the successful completion of the integration of the
AmericanWest Bank acquisition, which made a dramatic impact on our
scale and reach and is providing enhanced opportunity for future
client and revenue growth. During the fourth quarter, we made
additional progress in generating operating synergies as a result
of the consolidation of overlapping locations and integration of
operational activities earlier in the year. However, during
the quarter we also incurred increased expenses related to enhanced
infrastructure and regulatory compliance costs as we prepared to
cross the threshold of $10 billion in total assets. While
increasing regulatory costs are a significant headwind as we enter
2017, through the hard work of our employees across the franchise,
we expect to continue successfully executing on our strategies and
priorities to deliver sustainable profitability and revenue growth
to our shareholders while maintaining our moderate risk
profile.”
At December 31, 2016, Banner Corporation had $9.79
billion in assets, $7.37 billion in net loans and $8.12 billion in
deposits. The Company operates 190 branch offices located in
nine of the top 20 largest western Metropolitan Statistical Areas
by population.
Fourth Quarter 2016 Highlights
- Net income was $22.8 million, compared to $23.9 million in the
preceding quarter and increased substantially compared to $6.9
million in the fourth quarter of 2015.
- Return on average assets was 0.92% in the current quarter,
0.96% in the preceding quarter and 0.28% in the same quarter a year
ago.
- Acquisition-related expenses were $788,000 which, net of tax
benefit, reduced net income by $0.02 per diluted share for the
fourth quarter of 2016.
- Revenues from core operations* were $117.5 million, the same as
in the preceding quarter and increased 5% compared to $112.0
million in the fourth quarter a year ago.
- Net interest margin was 4.32% for the current quarter, compared
to 4.15% in the preceding quarter and 4.05% in the fourth quarter a
year ago.
- Excluding the impact of acquisition accounting adjustments, the
net interest margin was 4.13%*, compared to 4.01%* in the third
quarter and was 3.89%* in the fourth quarter a year ago.
- Deposit fees and other service charges were $12.2 million,
compared to $12.9 million in the preceding quarter and $13.2
million in the same quarter a year ago.
- Revenues from mortgage banking operations were $5.1 million
compared to $8.1 million in the preceding quarter and $4.5 million
in the fourth quarter a year ago.
- Provision for loan losses was $2.0 million, increasing the
allowance for loan losses to $86.0 million or 1.15% of total
loans.
- Core deposits increased 1% during the current quarter and
represented 87% of total deposits at December 31, 2016.
- Quarterly dividends to shareholders were $0.23 per share,
providing a current yield of 1.6% based on our December 31, 2016
closing price.
- Repurchased 1,145,250 shares of common stock at an average
price of $44.29 per share during the year 2016, including 660,900
shares at an average price per share of $44.86 during the fourth
quarter.
- Common shareholders' tangible equity per share* was $31.06 at
December 31, 2016, compared to $31.14 at the preceding quarter end
and $29.64 a year ago.
- The ratio of tangible common shareholders' equity to tangible
assets* remained strong at 10.83% at December 31, 2016, compared to
11.03% at the preceding quarter end and 10.67% a year ago.
*Revenues from core operations and non-interest
income from core operations (both of which exclude fair value
adjustments and gains and losses on the sale of securities),
acquisition accounting impact on net interest margin, non-interest
expense from core operations (which excludes acquisition-related
costs), the adjusted allowance for loan losses to adjusted loans
(which includes net loan discounts on acquired loans) and
references to tangible common stockholders' equity per share and
the ratio of tangible common equity to tangible assets (both of
which exclude goodwill and other intangible assets, net) 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 three pages of this press
release.
Acquisition of AmericanWest
Bank
Effective October 1, 2015, Banner completed the
acquisition of Starbuck Bancshares, Inc. ("Starbuck") and its
wholly owned subsidiary AmericanWest Bank. The merger was
accounted for using the acquisition method of accounting.
Accordingly, the acquired assets (including identifiable intangible
assets) and assumed liabilities of Starbuck were recognized at
their respective estimated fair values as of the merger date.
The excess of the purchase price over the fair value of the net
assets acquired was allocated to goodwill. The fair value on
the merger date represents management's best estimates based on
available information and facts and circumstances in existence on
the merger date. The acquisition accounting was subject to
adjustment within a post-closing measurement period of one year
from the acquisition date. During the fourth quarter of 2016,
there were no post-closing adjustments to goodwill as the
measurement period has lapsed; however, post-closing adjustments
reduced goodwill by $3.2 million during the year ended December 31,
2016.
In addition to the acquisition of AmericanWest
Bank, the acquisition of Siuslaw Financial Group and its
wholly-owned subsidiary Siuslaw Bank ("Siuslaw") on March 6, 2015
had an impact on the current and historical operating results of
Banner. For additional details regarding acquisitions and
merger related expenses, see the tables under Business Combinations
on page 12 of this press release.
Income Statement Review
Banner’s fourth quarter net interest income, before
the provision for loan losses, increased 4% to $97.2 million,
compared to $93.7 million in the preceding quarter. Fourth
quarter 2016 net interest income, before the provision for loan
losses, increased 6% compared to $92.1 million in the fourth
quarter a year ago. For the year, Banner’s net interest
income, before the provision for loan losses, increased 55% to
$375.1 million compared to $242.3 million in 2015 largely
reflecting the acquisition of AmericanWest Bank and continued
client acquisition.
“Our net interest margin increased 17 basis points
compared to the preceding quarter and increased 27 basis points
compared to the fourth quarter a year ago, as a result of higher
average loan yields and increased accretion from acquisition
accounting loan discounts, as well as modest changes in our asset
mix and slightly reduced funding costs,” said Grescovich.
"Excluding the impact of acquisition accounting, the net interest
margin increased 12 basis points compared to the preceding quarter,
and increased by 24 basis points compared to a year ago.*”
Net interest margin is enhanced by the amortization
of acquisition accounting discounts on loans acquired in the
acquisitions, which are accreted into loan interest income, as well
as by net premiums on non-market-rate certificate of deposit
liabilities assumed, which are amortized as a reduction to deposit
interest expense. Banner's net interest margin was 4.32% for
the fourth quarter of 2016, which included 16 basis points as a
result of accretion from acquisition accounting loan discounts, one
basis point from the amortization of deposit premiums and two basis
points as a result of the impact of the net loan acquisition
discounts on average earning assets from both the AmericanWest Bank
and Siuslaw acquisitions, compared to a net interest margin of
4.15% in the preceding quarter and 4.05% in the fourth quarter a
year ago. Excluding the effects of acquisition accounting,
the net interest margin was 4.13%* in the fourth quarter, 4.01% in
the preceding quarter and 3.89%* in the fourth quarter a year
ago.
Average interest-earning asset yields increased 15
basis points to 4.49% compared to 4.34% for the preceding quarter
and increased 25 basis points compared to 4.24% in the fourth
quarter a year ago. Loan yields increased 15 basis points
compared to the preceding quarter and increased 21 basis points
from the fourth quarter a year ago. Loan yields were
positively impacted by increased market interest rates late in the
fourth quarter due primarily to the impact of the December 2016
increase in the federal funds rate and related increases in Prime
and LIBOR rates. Loan yields in the current quarter were also
aided by $1.1 million in prepayment fees related to a single credit
relationship. The accretion of discounts and related balance
sheet impact on the loans acquired through the acquisitions added
21 basis points to reported loan yields for the quarter.
Deposit costs decreased one basis point compared to the preceding
quarter and decreased two basis points compared to the fourth
quarter a year ago. Amortization of acquisition accounting
net premiums on certificates of deposit reduced the cost of
deposits by two basis points in the fourth quarter of 2016.
The total cost of funds decreased one basis point to 0.18% during
the fourth quarter compared to the preceding quarter and declined
two basis points compared to 0.20% for the fourth quarter a year
ago, reflecting the decreased deposit costs and a reduction in
Federal Home Loan Bank (FHLB) advances as part of a strategy to
remain below $10 billion in total assets at December 31, 2016.
“As expected, due to loan growth and the renewal of
acquired loans out of the discounted loan portfolio, we recorded a
$2.0 million provision for loan losses during the fourth quarter,
the same as in the preceding quarter,” added Grescovich. In
the fourth quarter a year ago, Banner did not record a
provision.
Mortgage banking revenues, including gains on one-
to four-family and multifamily loan sales and loan servicing fees,
decreased significantly to $5.1 million in the fourth quarter
compared to $8.1 million in the preceding quarter but increased 15%
compared to $4.5 million in the fourth quarter of 2015. For
the full year, mortgage banking revenues increased 45% to $25.6
million compared to $17.7 million in 2015. The decrease in
mortgage banking revenues compared to the third quarter reflected
an expected seasonal pattern for one- to four-family loans, but
also reflected meaningfully narrower spreads on sales compared to
exceptionally wide spread levels in the preceding quarter. In
addition, sales of multifamily loans were significantly less in the
current quarter resulting in gains of only $254,000, while sales of
multifamily loans resulted in $1.4 million of gains in the third
quarter. Home purchase activity accounted for 58% of fourth
quarter one- to four-family mortgage banking loan originations.
Also reflecting seasonal factors, Banner’s deposit
fees and other service charges decreased 6% to $12.2 million in the
fourth quarter compared to $12.9 million in the preceding quarter
and, principally as a result of changes in certain fee structures
for accounts acquired in the AmericanWest Bank merger, decreased 7%
compared to $13.2 million in the fourth quarter a year ago.
Nonetheless, reflecting the significant increase in core deposits
compared to a year earlier, deposit fees and other service charges
increased 21% to $49.2 million for the year, compared to $40.6
million in 2015.
Total revenues were $116.6 million for the fourth
quarter of 2016, compared to $117.2 million in the preceding
quarter and $110.5 million in the fourth quarter a year ago.
Revenues from core operations* (revenues excluding gains and losses
on the sale of securities and net change in valuation of financial
instruments) was $117.5 million in the fourth quarter of 2016, the
same as the preceding quarter. Revenues from core operations*
increased 5% compared to $112.0 million in the fourth quarter of
2015. Total revenues for 2016 were $458.5 million compared to
$304.6 million in 2015, with the significant increase largely
attributable to the acquisition of AmericanWest Bank. For the
year ended December 31, 2016, revenues from core operations*
increased 50% to $460.3 million compared to $305.9 million in
2015.
Fourth quarter 2016 results included a $1.1 million
net loss for fair value adjustments as a result of changes in the
valuation of financial instruments carried at fair value that was
partly offset by a $311,000 net gain on the sale of
securities. In the preceding quarter, results included a $1.1
million net loss for fair value adjustments that was partly offset
by a $891,000 net gain on the sale of securities. In the
fourth quarter a year ago, results included a $1.5 million net loss
for fair value adjustments and a $3,000 net loss on the sale of
securities. In 2016 results included a $2.6 million net loss
for fair value adjustments as a result of changes in the valuation
of financial instruments carried at fair value that was partly
offset by an $843,000 net gain on the sale of securities. A
year ago, results included an $813,000 net loss for fair value
adjustments and a $540,000 net loss on the sale of securities.
Total non-interest income, which includes the
changes in the valuation of financial instruments carried at fair
value and gains and losses on the sale of securities, was $19.5
million in the fourth quarter of 2016, compared to $23.5 million in
the third quarter of 2016 and $18.4 million in the fourth quarter a
year ago. Non-interest income from core operations,* which
excludes gains and losses on sale of securities and net changes in
the valuation of financial instruments, was $20.3 million in the
fourth quarter of 2016, compared to $23.7 million for the third
quarter of 2016 and $19.9 million in the fourth quarter a year
ago. For the year ended December 31, 2016, Banner’s total
non-interest income was $83.5 million compared to $62.3 million a
year ago and non-interest income from core operations* was $85.2
million compared to $63.6 million for the same periods,
respectively.
Banner’s total non-interest expenses were $79.9
million in the fourth quarter of 2016, compared to $79.1 million in
the preceding quarter and $100.3 million in the fourth quarter of
2015. For the year, total non-interest expenses were $322.9
million compared to $236.6 million in 2015. The year’s
increase in non-interest expenses was largely attributable to the
incremental costs associated with operating the branches and the
related operations acquired in the AmericanWest Bank merger on
October 1, 2015, as well as generally increased compensation,
occupancy and payment and card processing services reflecting
increased transaction volume. The current quarter's
non-interest expenses also included increased advertising and
marketing expenses, elevated costs for professional services
largely as result of seasonal factors relating to accounting, audit
and examination processes, and costs incurred in anticipation of
enhanced regulatory compliance requirements. There was $788,000 in
acquisition-related expenses in the current quarter compared to
$1.7 million in the preceding quarter and $18.4 million in the
fourth quarter a year ago.
For the fourth quarter of 2016, Banner recorded
$11.9 million in state and federal income tax expense for an
effective tax rate of 34.4%, which reflects normal statutory tax
rates reduced by the effect of tax-exempt income and certain tax
credits.
Balance Sheet Review
As part of Banner’s previously announced strategy
to maintain total assets below $10.0 billion through the year 2016,
total assets decreased to $9.79 billion at December 31, 2016, from
$9.84 billion at September 30, 2016 and $9.80 billion a year
ago. The total of securities and interest-bearing deposits
held at other banks was $1.16 billion at December 31, 2016,
compared to $1.39 billion at September 30, 2016 and $1.54 billion a
year ago. The decrease in the securities portfolio during the
current quarter reflects the temporary deleveraging strategy.
The average effective duration of Banner's securities portfolio was
approximately 3.8 years at December 31, 2016 compared to 3.3 years
at December 31, 2015.
“Total loans increased again during the quarter,
with good production in targeted loan types, including increases in
commercial real estate and construction and development
loans. The regional economy remains solid and we continue to
see significant potential for growth in our loan origination
pipelines,” said Grescovich.
Net loans receivable increased 1% to $7.37 billion
at December 31, 2016, compared to $7.31 billion at September 30,
2016 and increased 2% compared to $7.24 billion a year ago.
Commercial real estate and multifamily real estate loans increased
2% to $3.59 billion at December 31, 2016, compared to $3.53 billion
at September 30, 2016, but increased modestly compared to $3.57
billion a year ago, reflecting significant sales earlier in the
year of multifamily loans acquired in the AmericanWest Bank merger,
which had been held for investment. Commercial business loans
increased 2% to $1.21 billion at December 31, 2016, compared to
$1.19 billion three months earlier but were unchanged compared to a
year ago. Agricultural business loans, which are seasonal by
nature, decreased to $369.2 million at December 31, 2016, compared
to $383.3 million three months earlier and $376.5 million a year
ago. Total construction, land and land development loans
increased 3% to $823.1 million at December 31, 2016, compared to
$797.3 million at September 30, 2016, and increased 43% compared to
$574.4 million a year earlier. One- to four-family loans
continued to decline as a result of repayments, with nearly all
newly originated mortgage loans being sold in the secondary
market.
Loans held for sale increased significantly to
$246.4 million at December 31, 2016, compared to $123.1 million at
September 30, 2016 and $44.7 million at December 31, 2015,
principally as a result of multifamily loan originations that
outpaced loan sales. Loans held for sale at December 31,
2016, included $216.3 million of multifamily loans and $30.1
million of one- to four-family loans.
Total deposits were $8.12 billion at December 31,
2016, a modest increase compared to $8.11 billion at September 30,
2016, and $8.06 billion a year ago. In connection with
certain product changes earlier in the year, Banner converted
approximately $420 million of former AmericanWest Bank
interest-bearing deposits to non-interest-bearing deposits during
the first quarter of 2016. As a result of the product changes
as well as organic growth, non-interest-bearing account balances
increased 20% to $3.14 billion at December 31, 2016, compared
to $2.62 billion a year ago. Interest-bearing transaction and
savings accounts decreased 4% to $3.94 billion compared to $4.08
billion a year ago as the product change more than offset organic
growth. Certificates of deposit decreased 23% to $1.05
billion at December 31, 2016, compared to $1.35 billion a year
earlier. Brokered deposits totaled $34.1 million at December
31, 2016, compared to $60.3 million at September 30, 2016 and
$162.9 million a year ago.
In part reflecting expected seasonal trends but
also as a result of additional account growth, core deposits
(non-interest bearing and interest-bearing transaction and savings
accounts) increased by 1% during the current quarter. Core
deposits represented 87% of total deposits at December 31, 2016,
compared to 86% of total deposits at September 30, 2016 and 83% of
total deposits a year earlier. As a result of this improved
deposit mix, as well as modest pricing adjustments, the cost of
deposits was 0.13% for the quarter ended December 31, 2016, a one
basis point decline compared to the preceding quarter, and a two
basis points decline compared to the quarter ended December 31,
2015.
At December 31, 2016, total common shareholders'
equity was $1.31 billion, or $39.34 per share, compared to $1.33
billion at September 30, 2016 and $1.30 billion a year ago.
The decrease in shareholders’ equity compared to the prior quarter
primarily reflects the repurchase of 660,900 shares of common stock
at an average price of $44.86 per share as well as the $0.23 per
share quarterly dividend, which was partially offset by net income
for the quarter. The decrease in shareholders’ equity for the
quarter also reflects an adverse change of $11.5 million in other
comprehensive income for the quarter principally related to changes
in the value securities available for sale as a result of increased
market interest rates. At December 31, 2016, tangible common
shareholders' equity*, which excludes goodwill and other intangible
assets, was $1.03 billion, or 10.83% of tangible assets*, compared
to $1.05 billion, or 11.03% of tangible assets, at September 30,
2016, and $1.01 billion, or 10.67% of tangible assets, a year
ago. Banner's tangible book value per share* increased to
$31.06 at December 31, 2016, compared to $29.64 per share a year
ago.
Banner Corporation and its subsidiary banks
continue to maintain capital levels in excess of the requirements
to be categorized as “well-capitalized” under the Basel III and
Dodd Frank regulatory standards. At December 31, 2016, Banner
Corporation's common equity Tier 1 capital ratio was 11.13%, its
Tier 1 leverage capital to average assets ratio was 11.83%, and its
total capital to risk-weighted assets ratio was 13.32%.
Credit Quality
In accordance with acquisition accounting, loans
acquired from AmericanWest Bank and Siuslaw were recorded at their
estimated fair value, which resulted in a net discount to the
loans’ contractual amounts, of which a portion reflects a discount
for possible credit losses. Credit discounts are included in
the determination of fair value, and as a result, no allowance for
loan and lease losses is recorded for acquired loans at the
acquisition date. Although the discount recorded on the
acquired loans is not reflected in the allowance for loan losses or
related allowance coverage ratios, we believe it should be
considered when comparing the current ratios to similar ratios in
periods prior to the acquisitions of AmericanWest Bank and
Siuslaw.
The allowance for loan losses was $86.0 million at
December 31, 2016, or 1.15% of total loans outstanding and 381% of
non-performing loans compared to $78.0 million at December 31,
2015, or 1.07% of total loans outstanding and 512% of
non-performing loans. Banner had net charge-offs of $253,000
in the fourth quarter compared to net recoveries of $902,000 in the
third quarter of 2016 and net recoveries of $688,000 in the fourth
quarter a year ago. Primarily as a result of loan growth and
the renewal of acquired loans out of the discounted loan portfolio,
Banner recorded a $2.0 million provision for loan losses in the
current quarter which was the same amount as recorded in the prior
quarter. Banner did not record a provision for the fourth
quarter of 2015. If the allowance for loan losses included
the remaining loan discount*, the adjusted allowance for loan
losses to adjusted loans would have been 1.57% as of December 31,
2016 as compared to 1.65% a year ago. Non-performing loans
were $22.6 million at December 31, 2016, compared to $27.3 million
at September 30, 2016 and $15.2 million a year ago. Real
estate owned and other repossessed assets were $11.2 million at
December 31, 2016, compared to $4.9 million at September 30, 2016,
and $11.9 million a year ago.
Banner's non-performing assets were $33.8 million,
or 0.35% of total assets, at December 31, 2016, compared to $32.2
million, or 0.33% of total assets, at September 30, 2016 and $27.1
million, or 0.28% of total assets, a year ago. In addition to
non-performing assets, purchased credit-impaired loans decreased to
$32.3 million at December 31, 2016, compared to $38.7 million at
September 30, 2016, and $58.6 million a year ago.
Conference Call
Banner will host a conference call on Thursday,
January 26, 2017, at 8:00 a.m. PST, to discuss its fourth 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
10098018, or at www.bannerbank.com.
About the Company
On October 1, 2015, Banner Corporation completed
the acquisition of AmericanWest Bank which was merged into Banner
Bank, a transformational merger that brought together two
financially strong, well-respected institutions and created a
leading Western bank. Banner Corporation is now a $9.8
billion bank holding company operating two commercial banks in five
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
“believe,” “will,” “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “estimate,” “project,” “plans,” 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.
Important factors that could cause actual results
to differ materially from the results anticipated or projected
include, but are not limited to, the following: (1) expected
revenues, cost savings, synergies and other benefits from the
merger of Banner Bank and Siuslaw Bank and the merger of Banner
Bank and AmericanWest Bank might not be realized within the
expected time frames or at all and costs or difficulties relating
to integration matters, including but not limited to customer and
employee retention, might be greater than expected; (2) 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 loan losses, which
could necessitate additional provisions for loan losses, resulting
both from loans originated and loans acquired from other financial
institutions; (3) results of examinations by regulatory
authorities, including the possibility that any such regulatory
authority may, among other things, require increases in the
allowance for loan losses or writing down of assets or impose
restrictions or penalties with respect to the Company's activities;
(4) competitive pressures among depository institutions; (5)
interest rate movements and their impact on customer behavior and
net interest margin; (6) the impact of repricing and competitors'
pricing initiatives on loan and deposit products; (7) fluctuations
in real estate values; (8) the ability to adapt successfully to
technological changes to meet customers' needs and developments in
the market place; (9) the ability to access cost-effective funding;
(10) changes in financial markets; (11) changes in economic
conditions in general and in Washington, Idaho, Oregon, Utah and
California in particular; (12) the costs, effects and outcomes of
litigation; (13) new legislation or regulatory changes, including
but not limited to the Dodd-Frank Act and regulations adopted
thereunder, changes in capital requirements pursuant to the
Dodd-Frank Act and 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; (14) changes in
accounting principles, policies or guidelines; (15) future
acquisitions by Banner of other depository institutions or lines of
business; (16) future goodwill impairment due to changes in
Banner's business, changes in market conditions, or other factors
and (17) 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.
| RESULTS OF
OPERATIONS |
|
Quarters Ended |
|
Twelve months ended |
| (in thousands except
shares and per share data) |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| |
|
|
|
|
|
|
|
|
|
|
| INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
| Loans
receivable |
|
$ |
93,915 |
|
|
$ |
89,805 |
|
|
$ |
88,100 |
|
|
$ |
359,612 |
|
|
$ |
237,292 |
|
|
Mortgage-backed securities |
|
3,861 |
|
|
4,803 |
|
|
5,440 |
|
|
19,328 |
|
|
9,049 |
|
|
Securities and cash equivalents |
|
3,231 |
|
|
3,241 |
|
|
2,955 |
|
|
12,537 |
|
|
8,092 |
|
| |
|
101,007 |
|
|
97,849 |
|
|
96,495 |
|
|
391,477 |
|
|
254,433 |
|
| INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
2,604 |
|
|
2,784 |
|
|
3,146 |
|
|
11,105 |
|
|
8,385 |
|
| Federal
Home Loan Bank advances |
|
79 |
|
|
256 |
|
|
287 |
|
|
953 |
|
|
311 |
|
| Other
borrowings |
|
76 |
|
|
82 |
|
|
73 |
|
|
310 |
|
|
211 |
|
| Junior
subordinated debentures |
|
1,077 |
|
|
1,019 |
|
|
890 |
|
|
4,040 |
|
|
3,247 |
|
| |
|
3,836 |
|
|
4,141 |
|
|
4,396 |
|
|
16,408 |
|
|
12,154 |
|
| Net
interest income before provision for loan losses |
|
97,171 |
|
|
93,708 |
|
|
92,099 |
|
|
375,069 |
|
|
242,279 |
|
| PROVISION FOR
LOAN LOSSES |
|
2,030 |
|
|
2,000 |
|
|
— |
|
|
6,030 |
|
|
— |
|
| Net
interest income |
|
95,141 |
|
|
91,708 |
|
|
92,099 |
|
|
369,039 |
|
|
242,279 |
|
| NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
| Deposit
fees and other service charges |
|
12,199 |
|
|
12,927 |
|
|
13,172 |
|
|
49,156 |
|
|
40,607 |
|
| Mortgage
banking operations |
|
5,143 |
|
|
8,141 |
|
|
4,482 |
|
|
25,552 |
|
|
17,720 |
|
| Bank
owned life insurance |
|
893 |
|
|
1,333 |
|
|
1,056 |
|
|
4,538 |
|
|
2,497 |
|
|
Miscellaneous |
|
2,065 |
|
|
1,344 |
|
|
1,196 |
|
|
6,001 |
|
|
2,821 |
|
| |
|
20,300 |
|
|
23,745 |
|
|
19,906 |
|
|
85,247 |
|
|
63,645 |
|
| Net gain
(loss) on sale of securities |
|
311 |
|
|
891 |
|
|
(3 |
) |
|
843 |
|
|
(540 |
) |
| Net
change in valuation of financial instruments carried at fair
value |
|
(1,148 |
) |
|
(1,124 |
) |
|
(1,547 |
) |
|
(2,620 |
) |
|
(813 |
) |
| Total
non-interest income |
|
19,463 |
|
|
23,512 |
|
|
18,356 |
|
|
83,470 |
|
|
62,292 |
|
| NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
| Salary
and employee benefits |
|
44,387 |
|
|
44,758 |
|
|
49,225 |
|
|
180,883 |
|
|
127,282 |
|
| Less
capitalized loan origination costs |
|
(4,785 |
) |
|
(4,953 |
) |
|
(4,007 |
) |
|
(18,895 |
) |
|
(14,379 |
) |
| Occupancy
and equipment |
|
12,581 |
|
|
10,979 |
|
|
11,533 |
|
|
45,000 |
|
|
30,366 |
|
|
Information / computer data services |
|
4,674 |
|
|
4,836 |
|
|
5,365 |
|
|
19,281 |
|
|
12,110 |
|
| Payment
and card processing services |
|
5,440 |
|
|
5,878 |
|
|
5,504 |
|
|
21,604 |
|
|
16,430 |
|
|
Professional services |
|
2,384 |
|
|
2,258 |
|
|
2,341 |
|
|
8,120 |
|
|
4,828 |
|
|
Advertising and marketing |
|
3,220 |
|
|
2,282 |
|
|
1,882 |
|
|
9,709 |
|
|
7,649 |
|
| Deposit
insurance |
|
1,012 |
|
|
890 |
|
|
1,284 |
|
|
4,551 |
|
|
3,189 |
|
|
State/municipal business and use taxes |
|
952 |
|
|
956 |
|
|
505 |
|
|
3,516 |
|
|
1,889 |
|
| Real
estate operations |
|
(338 |
) |
|
(21 |
) |
|
207 |
|
|
175 |
|
|
397 |
|
|
Amortization of core deposit intangibles |
|
1,722 |
|
|
1,724 |
|
|
1,896 |
|
|
7,061 |
|
|
3,164 |
|
|
Miscellaneous |
|
7,820 |
|
|
7,785 |
|
|
6,150 |
|
|
30,131 |
|
|
17,565 |
|
|
|
|
79,069 |
|
|
77,372 |
|
|
81,885 |
|
|
311,136 |
|
|
210,490 |
|
|
Acquisition related expenses |
|
788 |
|
|
1,720 |
|
|
18,369 |
|
|
11,733 |
|
|
26,110 |
|
| Total
non-interest expense |
|
79,857 |
|
|
79,092 |
|
|
100,254 |
|
|
322,869 |
|
|
236,600 |
|
| Income
before provision for income taxes |
|
34,747 |
|
|
36,128 |
|
|
10,201 |
|
|
129,640 |
|
|
67,971 |
|
| PROVISION
FOR INCOME TAXES |
|
11,943 |
|
|
12,277 |
|
|
3,308 |
|
|
44,255 |
|
|
22,749 |
|
| NET
INCOME |
|
$ |
22,804 |
|
|
$ |
23,851 |
|
|
$ |
6,893 |
|
|
$ |
85,385 |
|
|
$ |
45,222 |
|
| Earnings per share
available to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.69 |
|
|
$ |
0.70 |
|
|
$ |
0.20 |
|
|
$ |
2.52 |
|
|
$ |
1.90 |
|
|
Diluted |
|
$ |
0.69 |
|
|
$ |
0.70 |
|
|
$ |
0.20 |
|
|
$ |
2.52 |
|
|
$ |
1.89 |
|
| Cumulative dividends
declared per common share |
|
$ |
0.23 |
|
|
$ |
0.23 |
|
|
$ |
0.18 |
|
|
$ |
0.88 |
|
|
$ |
0.72 |
|
| Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
33,134,222 |
|
|
34,045,225 |
|
|
33,842,350 |
|
|
33,820,148 |
|
|
23,801,373 |
|
|
Diluted |
|
33,201,333 |
|
|
34,124,611 |
|
|
33,934,426 |
|
|
33,853,511 |
|
|
23,866,621 |
|
| (Decrease) increase in
common shares outstanding |
|
(673,924 |
) |
|
(483,249 |
) |
|
13,279,955 |
|
|
(1,048,868 |
) |
|
14,670,707 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL CONDITION |
|
|
|
|
|
|
|
Percentage Change |
| (in thousands except
shares and per share data) |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
| Cash and due from
banks |
|
$ |
177,083 |
|
|
$ |
161,710 |
|
|
$ |
117,657 |
|
|
9.5 |
% |
|
50.5 |
% |
| Interest-bearing
deposits |
|
70,636 |
|
|
84,207 |
|
|
144,260 |
|
|
(16.1 |
)% |
|
(51.0 |
)% |
| Total
cash and cash equivalents |
|
247,719 |
|
|
245,917 |
|
|
261,917 |
|
|
0.7 |
% |
|
(5.4 |
)% |
| Securities -
trading |
|
24,568 |
|
|
30,889 |
|
|
34,134 |
|
|
(20.5 |
)% |
|
(28.0 |
)% |
| Securities - available
for sale |
|
800,917 |
|
|
1,006,414 |
|
|
1,138,573 |
|
|
(20.4 |
)% |
|
(29.7 |
)% |
| Securities - held to
maturity |
|
267,873 |
|
|
271,975 |
|
|
220,666 |
|
|
(1.5 |
)% |
|
21.4 |
% |
| Federal Home Loan Bank
stock |
|
12,506 |
|
|
12,826 |
|
|
16,057 |
|
|
(2.5 |
)% |
|
(22.1 |
)% |
| Loans held for
sale |
|
246,353 |
|
|
123,144 |
|
|
44,712 |
|
|
100.1 |
% |
|
451.0 |
% |
| Loans receivable |
|
7,451,148 |
|
|
7,398,637 |
|
|
7,314,504 |
|
|
0.7 |
% |
|
1.9 |
% |
| Allowance for loan
losses |
|
(85,997 |
) |
|
(84,220 |
) |
|
(78,008 |
) |
|
2.1 |
% |
|
10.2 |
% |
| Net
loans |
|
7,365,151 |
|
|
7,314,417 |
|
|
7,236,496 |
|
|
0.7 |
% |
|
1.8 |
% |
| Accrued interest
receivable |
|
30,178 |
|
|
30,345 |
|
|
29,627 |
|
|
(0.6 |
)% |
|
1.9 |
% |
| Real estate owned held
for sale, net |
|
11,081 |
|
|
4,717 |
|
|
11,627 |
|
|
134.9 |
% |
|
(4.7 |
)% |
| Property and equipment,
net |
|
166,481 |
|
|
167,621 |
|
|
167,604 |
|
|
(0.7 |
)% |
|
(0.7 |
)% |
| Goodwill |
|
244,583 |
|
|
244,583 |
|
|
247,738 |
|
|
— |
% |
|
(1.3 |
)% |
| Other intangibles,
net |
|
30,162 |
|
|
31,934 |
|
|
37,472 |
|
|
(5.5 |
)% |
|
(19.5 |
)% |
| Bank-owned life
insurance |
|
158,936 |
|
|
158,831 |
|
|
156,865 |
|
|
0.1 |
% |
|
1.3 |
% |
| Other assets |
|
187,160 |
|
|
197,415 |
|
|
192,810 |
|
|
(5.2 |
)% |
|
(2.9 |
)% |
| Total
assets |
|
$ |
9,793,668 |
|
|
$ |
9,841,028 |
|
|
$ |
9,796,298 |
|
|
(0.5 |
)% |
|
— |
% |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
3,140,451 |
|
|
$ |
3,190,293 |
|
|
$ |
2,619,618 |
|
|
(1.6 |
)% |
|
19.9 |
% |
|
Interest-bearing transaction and savings accounts |
|
3,935,630 |
|
|
3,798,668 |
|
|
4,081,580 |
|
|
3.6 |
% |
|
(3.6 |
)% |
|
Interest-bearing certificates |
|
1,045,333 |
|
|
1,123,011 |
|
|
1,353,870 |
|
|
(6.9 |
)% |
|
(22.8 |
)% |
| Total
deposits |
|
8,121,414 |
|
|
8,111,972 |
|
|
8,055,068 |
|
|
0.1 |
% |
|
0.8 |
% |
| Advances from Federal
Home Loan Bank at fair value |
|
54,216 |
|
|
62,342 |
|
|
133,381 |
|
|
(13.0 |
)% |
|
(59.4 |
)% |
| Customer repurchase
agreements and other borrowings |
|
105,685 |
|
|
108,911 |
|
|
98,325 |
|
|
(3.0 |
)% |
|
7.5 |
% |
| Junior subordinated
debentures at fair value |
|
95,200 |
|
|
94,364 |
|
|
92,480 |
|
|
0.9 |
% |
|
2.9 |
% |
| Accrued expenses and
other liabilities |
|
71,369 |
|
|
92,783 |
|
|
76,511 |
|
|
(23.1 |
)% |
|
(6.7 |
)% |
| Deferred
compensation |
|
40,074 |
|
|
39,385 |
|
|
40,474 |
|
|
1.7 |
% |
|
(1.0 |
)% |
| Total
liabilities |
|
8,487,958 |
|
|
8,509,757 |
|
|
8,496,239 |
|
|
(0.3 |
)% |
|
(0.1 |
)% |
| SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
1,213,837 |
|
|
1,243,205 |
|
|
1,261,174 |
|
|
(2.4 |
)% |
|
(3.8 |
)% |
| Retained earnings |
|
95,328 |
|
|
80,053 |
|
|
39,615 |
|
|
19.1 |
% |
|
140.6 |
% |
| Other components of
shareholders' equity |
|
(3,455 |
) |
|
8,013 |
|
|
(730 |
) |
|
(143.1 |
)% |
|
373.3 |
% |
| Total
shareholders' equity |
|
1,305,710 |
|
|
1,331,271 |
|
|
1,300,059 |
|
|
(1.9 |
)% |
|
0.4 |
% |
| Total
liabilities and shareholders' equity |
|
$ |
9,793,668 |
|
|
$ |
9,841,028 |
|
|
$ |
9,796,298 |
|
|
(0.5 |
)% |
|
— |
% |
| Common Shares
Issued: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares outstanding at
end of period |
|
33,193,387 |
|
|
33,867,311 |
|
|
34,242,255 |
|
|
|
|
|
| Common shareholders'
equity per share (1) |
|
$ |
39.34 |
|
|
$ |
39.31 |
|
|
$ |
37.97 |
|
|
|
|
|
| Common shareholders'
tangible equity per share (1) (2) |
|
$ |
31.06 |
|
|
$ |
31.14 |
|
|
$ |
29.64 |
|
|
|
|
|
| Common shareholders'
tangible equity to tangible assets (2) |
|
10.83 |
% |
|
11.03 |
% |
|
10.67 |
% |
|
|
|
|
| Consolidated Tier 1
leverage capital ratio |
|
11.83 |
% |
|
11.68 |
% |
|
11.06 |
% |
|
|
|
|
|
(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 last three pages of the press release tables. |
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Percentage Change |
|
LOANS |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
| Commercial real
estate: |
|
|
|
|
|
|
|
|
|
|
| Owner
occupied |
|
$ |
1,352,999 |
|
|
$ |
1,340,577 |
|
|
$ |
1,327,807 |
|
|
0.9 |
% |
|
1.9 |
% |
|
Investment properties |
|
1,986,336 |
|
|
1,918,639 |
|
|
1,765,353 |
|
|
3.5 |
% |
|
12.5 |
% |
| Multifamily real
estate |
|
248,150 |
|
|
266,883 |
|
|
472,976 |
|
|
(7.0 |
)% |
|
(47.5 |
)% |
| Commercial
construction |
|
124,068 |
|
|
135,487 |
|
|
72,103 |
|
|
(8.4 |
)% |
|
72.1 |
% |
| Multifamily
construction |
|
124,126 |
|
|
105,669 |
|
|
63,846 |
|
|
17.5 |
% |
|
94.4 |
% |
| One- to four-family
construction |
|
375,704 |
|
|
363,586 |
|
|
278,469 |
|
|
3.3 |
% |
|
34.9 |
% |
| Land and land
development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
170,004 |
|
|
162,029 |
|
|
126,773 |
|
|
4.9 |
% |
|
34.1 |
% |
|
Commercial |
|
29,184 |
|
|
30,556 |
|
|
33,179 |
|
|
(4.5 |
)% |
|
(12.0 |
)% |
| Commercial
business |
|
1,207,879 |
|
|
1,187,848 |
|
|
1,207,944 |
|
|
1.7 |
% |
|
— |
% |
| Agricultural business
including secured by farmland |
|
369,156 |
|
|
383,275 |
|
|
376,531 |
|
|
(3.7 |
)% |
|
(2.0 |
)% |
| One- to four-family
real estate |
|
813,077 |
|
|
846,899 |
|
|
952,633 |
|
|
(4.0 |
)% |
|
(14.6 |
)% |
| Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consumer
secured by one- to four-family real estate |
|
493,211 |
|
|
497,643 |
|
|
478,420 |
|
|
(0.9 |
)% |
|
3.1 |
% |
|
Consumer-other |
|
157,254 |
|
|
159,546 |
|
|
158,470 |
|
|
(1.4 |
)% |
|
(0.8 |
)% |
| Total
loans outstanding |
|
$ |
7,451,148 |
|
|
$ |
7,398,637 |
|
|
$ |
7,314,504 |
|
|
0.7 |
% |
|
1.9 |
% |
| Restructured loans
performing under their restructured terms |
|
$ |
18,907 |
|
|
$ |
17,649 |
|
|
$ |
21,777 |
|
|
|
|
|
| Loans 30 - 89 days past
due and on accrual (1) |
|
$ |
11,571 |
|
|
$ |
12,668 |
|
|
$ |
18,834 |
|
|
|
|
|
| Total delinquent loans
(including loans on non-accrual), net (2) |
|
$ |
30,553 |
|
|
$ |
39,543 |
|
|
$ |
30,994 |
|
|
|
|
|
| Total delinquent
loans / Total loans outstanding |
|
0.41 |
% |
|
0.53 |
% |
|
0.42 |
% |
|
|
|
|
|
(1 |
) |
|
Includes $470,000 of
purchased credit-impaired loans at December 31, 2016 compared to
$486,000 at September 30, 2016 and $4.3 million at December 31,
2015. |
|
(2 |
) |
|
Delinquent loans
include $1.7 million of delinquent purchased credit-impaired loans
at December 31, 2016 compared to $3.6 million at September 30, 2016
and $6.3 million at December 31, 2015. |
| LOANS BY
GEOGRAPHIC LOCATION |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Percentage |
|
Amount |
|
Percentage |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Washington |
|
$ |
3,433,617 |
|
|
46.1 |
% |
|
$ |
3,415,413 |
|
|
46.2 |
% |
|
$ |
3,343,112 |
|
|
45.7 |
% |
| Oregon |
|
1,505,369 |
|
|
20.2 |
% |
|
1,466,845 |
|
|
19.8 |
% |
|
1,446,531 |
|
|
19.8 |
% |
| California |
|
1,239,989 |
|
|
16.6 |
% |
|
1,204,273 |
|
|
16.3 |
% |
|
1,234,016 |
|
|
16.9 |
% |
| Idaho |
|
495,992 |
|
|
6.7 |
% |
|
517,607 |
|
|
7.0 |
% |
|
496,870 |
|
|
6.8 |
% |
| Utah |
|
283,890 |
|
|
3.8 |
% |
|
292,088 |
|
|
3.9 |
% |
|
325,011 |
|
|
4.4 |
% |
| Other |
|
492,291 |
|
|
6.6 |
% |
|
502,411 |
|
|
6.8 |
% |
|
468,964 |
|
|
6.4 |
% |
| Total loans |
|
$ |
7,451,148 |
|
|
100.0 |
% |
|
$ |
7,398,637 |
|
|
100.0 |
% |
|
$ |
7,314,504 |
|
|
100.0 |
% |
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters Ended |
|
Twelve months ended |
| CHANGE IN
THE |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| ALLOWANCE FOR
LOAN LOSSES |
|
|
|
|
|
|
|
|
|
|
| Balance, beginning of
period |
|
$ |
84,220 |
|
|
$ |
81,318 |
|
|
$ |
77,320 |
|
|
$ |
78,008 |
|
|
$ |
75,907 |
|
| Provision for loan
losses |
|
2,030 |
|
|
2,000 |
|
|
— |
|
|
6,030 |
|
|
— |
|
| Recoveries of loans
previously charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
484 |
|
|
34 |
|
|
233 |
|
|
582 |
|
|
819 |
|
|
Multifamily real estate |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
113 |
|
|
Construction and land |
|
903 |
|
|
673 |
|
|
578 |
|
|
2,171 |
|
|
1,811 |
|
| One- to
four-family real estate |
|
231 |
|
|
482 |
|
|
631 |
|
|
1,283 |
|
|
772 |
|
|
Commercial business |
|
218 |
|
|
433 |
|
|
143 |
|
|
1,993 |
|
|
948 |
|
|
Agricultural business, including secured by farmland |
|
20 |
|
|
(138 |
) |
|
261 |
|
|
59 |
|
|
1,927 |
|
|
Consumer |
|
81 |
|
|
73 |
|
|
197 |
|
|
610 |
|
|
570 |
|
| |
|
1,937 |
|
|
1,557 |
|
|
2,043 |
|
|
6,698 |
|
|
6,960 |
|
| Loans charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
(566 |
) |
|
— |
|
|
(537 |
) |
|
(746 |
) |
|
(64 |
) |
|
Construction and land |
|
(616 |
) |
|
— |
|
|
— |
|
|
(616 |
) |
|
(891 |
) |
| One- to
four-family real estate |
|
(249 |
) |
|
(92 |
) |
|
(292 |
) |
|
(375 |
) |
|
(419 |
) |
|
Commercial business |
|
(305 |
) |
|
(333 |
) |
|
— |
|
|
(948 |
) |
|
(746 |
) |
|
Agricultural business, including secured by farmland |
|
— |
|
|
— |
|
|
(161 |
) |
|
(567 |
) |
|
(1,225 |
) |
|
Consumer |
|
(454 |
) |
|
(230 |
) |
|
(365 |
) |
|
(1,487 |
) |
|
(1,514 |
) |
| |
|
(2,190 |
) |
|
(655 |
) |
|
(1,355 |
) |
|
(4,739 |
) |
|
(4,859 |
) |
| Net
recoveries (charge-offs) |
|
(253 |
) |
|
902 |
|
|
688 |
|
|
1,959 |
|
|
2,101 |
|
| Balance, end of
period |
|
$ |
85,997 |
|
|
$ |
84,220 |
|
|
$ |
78,008 |
|
|
$ |
85,997 |
|
|
$ |
78,008 |
|
| Net recoveries
(charge-offs) / Average loans outstanding |
|
— |
% |
|
0.01 |
% |
|
0.01 |
% |
|
0.03 |
% |
|
0.04 |
% |
| ALLOCATION
OF |
|
|
|
|
|
|
| ALLOWANCE FOR
LOAN LOSSES |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| Specific or allocated
loss allowance: |
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
20,993 |
|
|
$ |
19,846 |
|
|
$ |
20,716 |
|
|
Multifamily real estate |
|
1,360 |
|
|
1,436 |
|
|
4,195 |
|
|
Construction and land |
|
34,252 |
|
|
33,803 |
|
|
27,131 |
|
| One- to
four-family real estate |
|
2,238 |
|
|
2,190 |
|
|
4,732 |
|
|
Commercial business |
|
16,533 |
|
|
16,507 |
|
|
13,856 |
|
|
Agricultural business, including secured by farmland |
|
2,967 |
|
|
2,833 |
|
|
3,645 |
|
|
Consumer |
|
4,104 |
|
|
3,934 |
|
|
902 |
|
| Total
allocated |
|
82,447 |
|
|
80,549 |
|
|
75,177 |
|
| Unallocated |
|
3,550 |
|
|
3,671 |
|
|
2,831 |
|
| Total
allowance for loan losses |
|
$ |
85,997 |
|
|
$ |
84,220 |
|
|
$ |
78,008 |
|
| Allowance for loan
losses / Total loans outstanding |
|
1.15 |
% |
|
1.14 |
% |
|
1.07 |
% |
| Allowance for loan
losses / Non-performing loans |
|
381 |
% |
|
309 |
% |
|
512 |
% |
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
| (dollars in
thousands) |
|
|
|
|
|
| |
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| NON-PERFORMING
ASSETS |
|
|
|
|
|
| Loans on non-accrual
status: |
|
|
|
|
|
| Secured
by real estate: |
|
|
|
|
|
|
Commercial |
$ |
8,237 |
|
|
$ |
12,776 |
|
|
$ |
3,751 |
|
|
Multifamily |
— |
|
|
30 |
|
|
— |
|
|
Construction and land |
1,748 |
|
|
1,747 |
|
|
2,260 |
|
| One- to
four-family |
2,263 |
|
|
3,414 |
|
|
4,700 |
|
|
Commercial business |
3,074 |
|
|
2,765 |
|
|
2,159 |
|
|
Agricultural business, including secured by farmland |
3,229 |
|
|
3,755 |
|
|
697 |
|
|
Consumer |
1,875 |
|
|
1,385 |
|
|
703 |
|
| |
20,426 |
|
|
25,872 |
|
|
14,270 |
|
| Loans more than 90 days
delinquent, still on accrual: |
|
|
|
|
|
| Secured
by real estate: |
|
|
|
|
|
|
Commercial |
701 |
|
|
— |
|
|
— |
|
|
Multifamily |
147 |
|
|
147 |
|
|
— |
|
|
Construction and land |
— |
|
|
— |
|
|
— |
|
| One- to
four-family |
1,233 |
|
|
852 |
|
|
899 |
|
|
Commercial business |
— |
|
|
— |
|
|
8 |
|
|
Consumer |
72 |
|
|
425 |
|
|
45 |
|
| |
2,153 |
|
|
1,424 |
|
|
952 |
|
| Total non-performing
loans |
22,579 |
|
|
27,296 |
|
|
15,222 |
|
| Real estate owned
(REO) |
11,081 |
|
|
4,717 |
|
|
11,627 |
|
| Other repossessed
assets |
166 |
|
|
164 |
|
|
268 |
|
| Total
non-performing assets |
$ |
33,826 |
|
|
$ |
32,177 |
|
|
$ |
27,117 |
|
| Total non-performing
assets to total assets |
0.35 |
% |
|
0.33 |
% |
|
0.28 |
% |
| Purchased
credit-impaired loans, net |
$ |
32,322 |
|
|
$ |
38,674 |
|
|
$ |
58,600 |
|
| |
Quarters Ended |
|
Twelve months ended |
| REAL ESTATE
OWNED |
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| Balance, beginning of
period |
$ |
4,717 |
|
|
$ |
6,147 |
|
|
$ |
6,363 |
|
|
$ |
11,627 |
|
|
$ |
3,352 |
|
| Additions
from loan foreclosures |
8,375 |
|
|
156 |
|
|
1,125 |
|
|
8,909 |
|
|
4,351 |
|
| Additions
from acquisitions |
— |
|
|
— |
|
|
5,706 |
|
|
400 |
|
|
8,231 |
|
| Additions
from capitalized costs |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
298 |
|
| Proceeds
from dispositions of REO |
(2,791 |
) |
|
(1,699 |
) |
|
(1,585 |
) |
|
(10,812 |
) |
|
(4,740 |
) |
| Gain on
sale of REO |
852 |
|
|
281 |
|
|
18 |
|
|
1,833 |
|
|
351 |
|
| Valuation
adjustments in the period |
(72 |
) |
|
(168 |
) |
|
— |
|
|
(876 |
) |
|
(216 |
) |
| Balance, end of
period |
$ |
11,081 |
|
|
$ |
4,717 |
|
|
$ |
11,627 |
|
|
$ |
11,081 |
|
|
$ |
11,627 |
|
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| DEPOSIT
COMPOSITION |
|
|
|
|
|
|
|
Percentage Change |
| |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Prior Qtr |
|
Prior Yr |
| |
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
3,140,451 |
|
|
$ |
3,190,293 |
|
|
$ |
2,619,618 |
|
|
(1.6 |
)% |
|
19.9 |
% |
| Interest-bearing
checking |
|
914,484 |
|
|
853,594 |
|
|
1,159,846 |
|
|
7.1 |
% |
|
(21.2 |
)% |
| Regular savings
accounts |
|
1,523,391 |
|
|
1,387,123 |
|
|
1,284,642 |
|
|
9.8 |
% |
|
18.6 |
% |
| Money market
accounts |
|
1,497,755 |
|
|
1,557,951 |
|
|
1,637,092 |
|
|
(3.9 |
)% |
|
(8.5 |
)% |
| Total
interest-bearing transaction and savings accounts |
|
3,935,630 |
|
|
3,798,668 |
|
|
4,081,580 |
|
|
3.6 |
% |
|
(3.6 |
)% |
| Interest-bearing
certificates |
|
1,045,333 |
|
|
1,123,011 |
|
|
1,353,870 |
|
|
(6.9 |
)% |
|
(22.8 |
)% |
| Total
deposits |
|
$ |
8,121,414 |
|
|
$ |
8,111,972 |
|
|
$ |
8,055,068 |
|
|
0.1 |
% |
|
0.8 |
% |
| GEOGRAPHIC
CONCENTRATION OF DEPOSITS |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Percentage |
|
Amount |
|
Percentage |
| Washington |
|
$ |
4,347,644 |
|
|
53.6 |
% |
|
$ |
4,283,522 |
|
|
52.8 |
% |
|
$ |
4,219,304 |
|
|
52.4 |
% |
| Oregon |
|
1,708,973 |
|
|
21.0 |
% |
|
1,737,754 |
|
|
21.4 |
% |
|
1,648,421 |
|
|
20.4 |
% |
| California |
|
1,469,748 |
|
|
18.1 |
% |
|
1,491,903 |
|
|
18.4 |
% |
|
1,592,365 |
|
|
19.8 |
% |
| Idaho |
|
447,019 |
|
|
5.5 |
% |
|
435,090 |
|
|
5.4 |
% |
|
435,099 |
|
|
5.4 |
% |
| Utah |
|
148,030 |
|
|
1.8 |
% |
|
163,703 |
|
|
2.0 |
% |
|
159,879 |
|
|
2.0 |
% |
| Total deposits |
|
$ |
8,121,414 |
|
|
100.0 |
% |
|
$ |
8,111,972 |
|
|
100.0 |
% |
|
$ |
8,055,068 |
|
|
100.0 |
% |
| INCLUDED IN
TOTAL DEPOSITS |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| Public
non-interest-bearing accounts |
|
$ |
92,789 |
|
|
$ |
86,207 |
|
|
$ |
85,489 |
|
| Public interest-bearing
transaction & savings accounts |
|
128,976 |
|
|
115,458 |
|
|
123,941 |
|
| Public interest-bearing
certificates |
|
25,650 |
|
|
26,734 |
|
|
31,281 |
|
| Total
public deposits |
|
$ |
247,415 |
|
|
$ |
228,399 |
|
|
$ |
240,711 |
|
| Total brokered
deposits |
|
$ |
34,074 |
|
|
$ |
60,290 |
|
|
$ |
162,936 |
|
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
| (in thousands) |
|
|
|
|
| |
|
|
|
|
| BUSINESS
COMBINATIONS |
|
|
|
|
| ACQUISITION OF STARBUCK
BANCSHARES, INC. |
|
October 1, 2015 |
| |
|
|
|
|
| Cash paid |
|
|
|
$ |
130,000 |
|
| Fair value of common
shares issued |
|
|
|
630,674 |
|
| Total
consideration |
|
|
|
760,674 |
|
| |
|
|
|
|
| Fair value of assets
acquired: |
|
|
|
|
| Cash and
cash equivalents |
|
$ |
95,821 |
|
|
|
|
Securities |
|
1,037,238 |
|
|
|
| Loans
receivable |
|
2,999,130 |
|
|
|
| Real
estate owned held for sale |
|
6,105 |
|
|
|
| Property
and equipment |
|
66,728 |
|
|
|
| Core
deposit intangible |
|
33,500 |
|
|
|
| Deferred
tax asset |
|
108,454 |
|
|
|
| Other
assets |
|
113,009 |
|
|
|
| Total
assets acquired |
|
4,459,985 |
|
|
|
| |
|
|
|
|
| Fair value of
liabilities assumed: |
|
|
|
|
|
Deposits |
|
3,638,596 |
|
|
|
| FHLB
advances |
|
221,442 |
|
|
|
| Junior
subordinated debentures |
|
5,806 |
|
|
|
| Other
liabilities |
|
56,359 |
|
|
|
| Total
liabilities assumed |
|
3,922,203 |
|
|
|
| Net
assets acquired |
|
|
|
537,782 |
|
|
Goodwill |
|
|
|
$ |
222,892 |
|
| MERGER AND
ACQUISITION EXPENSE |
Quarters Ended |
|
Twelve months ended |
| |
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| By expense
category: |
|
|
|
|
|
|
|
|
|
| Personnel
severance/retention fees |
$ |
80 |
|
|
$ |
16 |
|
|
$ |
6,134 |
|
|
$ |
1,384 |
|
|
$ |
6,577 |
|
|
Professional services |
92 |
|
|
687 |
|
|
5,757 |
|
|
2,230 |
|
|
11,169 |
|
| Branch
consolidation and other occupancy expenses |
73 |
|
|
94 |
|
|
976 |
|
|
2,590 |
|
|
1,031 |
|
| Client
communications |
254 |
|
|
527 |
|
|
306 |
|
|
1,158 |
|
|
527 |
|
|
Information/computer data services |
81 |
|
|
459 |
|
|
2,069 |
|
|
2,490 |
|
|
2,875 |
|
| Payment
and processing |
13 |
|
|
— |
|
|
12 |
|
|
197 |
|
|
28 |
|
|
Miscellaneous |
195 |
|
|
(63 |
) |
|
3,115 |
|
|
1,684 |
|
|
3,903 |
|
| Total
merger and acquisition expense |
$ |
788 |
|
|
$ |
1,720 |
|
|
$ |
18,369 |
|
|
$ |
11,733 |
|
|
$ |
26,110 |
|
| |
|
|
|
|
|
|
|
|
|
| By acquisition: |
|
|
|
|
|
|
|
|
|
| Siuslaw
Financial Group |
— |
|
|
1 |
|
|
133 |
|
|
95 |
|
|
2,000 |
|
| Starbuck
Bancshares, Inc. (AmericanWest Bank) |
788 |
|
|
1,719 |
|
|
18,236 |
|
|
11,638 |
|
|
24,110 |
|
| Total
merger and acquisition expense |
$ |
788 |
|
|
$ |
1,720 |
|
|
$ |
18,369 |
|
|
$ |
11,733 |
|
|
$ |
26,110 |
|
| 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 DECEMBER 31, 2016 |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Banner
Corporation-consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total
capital to risk-weighted assets |
|
$ |
1,214,913 |
|
|
13.32 |
% |
|
$ |
729,663 |
|
|
8.00 |
% |
|
$ |
912,079 |
|
|
10.00 |
% |
| Tier 1
capital to risk-weighted assets |
|
1,125,267 |
|
|
12.34 |
% |
|
547,248 |
|
|
6.00 |
% |
|
547,248 |
|
|
6.00 |
% |
| Tier 1
leverage capital to average assets |
|
1,125,267 |
|
|
11.83 |
% |
|
380,519 |
|
|
4.00 |
% |
|
|
n/a |
|
|
n/a |
|
| Common
equity tier 1 capital to risk-weighted assets |
|
1,014,994 |
|
|
11.13 |
% |
|
410,436 |
|
|
4.50 |
% |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Banner Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
capital to risk-weighted assets |
|
1,043,837 |
|
|
11.70 |
% |
|
713,984 |
|
|
8.00 |
% |
|
892,480 |
|
|
10.00 |
% |
| Tier 1
capital to risk-weighted assets |
|
956,298 |
|
|
10.72 |
% |
|
535,488 |
|
|
6.00 |
% |
|
713,984 |
|
|
8.00 |
% |
| Tier 1
leverage capital to average assets |
|
953,298 |
|
|
10.34 |
% |
|
369,936 |
|
|
4.00 |
% |
|
462,420 |
|
|
5.00 |
% |
| Common
equity tier 1 capital to risk-weighted assets |
|
956,298 |
|
|
10.72 |
% |
|
401,616 |
|
|
4.50 |
% |
|
580,112 |
|
|
6.50 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Islanders Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
capital to risk-weighted assets |
|
35,207 |
|
|
18.45 |
% |
|
15,266 |
|
|
8.00 |
% |
|
19,082 |
|
|
10.00 |
% |
| Tier 1
capital to risk-weighted assets |
|
33,099 |
|
|
17.35 |
% |
|
11,449 |
|
|
6.00 |
% |
|
15,266 |
|
|
8.00 |
% |
| Tier 1
leverage capital to average assets |
|
33,099 |
|
|
12.72 |
% |
|
10,405 |
|
|
4.00 |
% |
|
13,006 |
|
|
5.00 |
% |
| Common
equity tier 1 capital to risk-weighted assets |
|
33,099 |
|
|
17.35 |
% |
|
8,587 |
|
|
4.50 |
% |
|
12,403 |
|
|
6.50 |
% |
|
ADDITIONAL FINANCIAL INFORMATION |
|
| (dollars
in thousands) |
|
| (rates /
ratios annualized) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF NET INTEREST SPREAD |
Quarter Ended |
|
| |
December 31, 2016 |
|
September 30, 2016 |
|
December 31, 2015 |
|
| |
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: |
|
|
|
|
|
|
|
|
|
|
|
|
| Mortgage loans |
$ |
5,960,506 |
|
$ |
74,538 |
|
4.97 |
% |
|
$ |
5,843,381 |
|
$ |
70,223 |
|
4.78 |
% |
|
$ |
5,785,986 |
|
$ |
69,552 |
|
4.77 |
% |
|
| Commercial/agricultural loans |
1,469,407 |
|
17,192 |
|
4.65 |
% |
|
1,495,611 |
|
17,373 |
|
4.62 |
% |
|
1,469,445 |
|
16,303 |
|
4.40 |
% |
|
| Consumer and other loans |
141,133 |
|
2,185 |
|
6.16 |
% |
|
142,977 |
|
2,209 |
|
6.15 |
% |
|
142,599 |
|
2,245 |
|
6.25 |
% |
|
| Total loans(1) |
7,571,046 |
|
93,915 |
|
4.93 |
% |
|
7,481,969 |
|
89,805 |
|
4.78 |
% |
|
7,398,030 |
|
88,100 |
|
4.72 |
% |
|
| Mortgage-backed securities |
796,625 |
|
3,861 |
|
1.93 |
% |
|
920,560 |
|
4,803 |
|
2.08 |
% |
|
1,025,612 |
|
5,440 |
|
2.10 |
% |
|
| Other securities |
469,377 |
|
3,062 |
|
2.60 |
% |
|
472,159 |
|
3,050 |
|
2.57 |
% |
|
457,521 |
|
2,787 |
|
2.42 |
% |
|
| Interest-bearing deposits with banks |
91,625 |
|
95 |
|
0.41 |
% |
|
86,868 |
|
98 |
|
0.45 |
% |
|
129,797 |
|
76 |
|
0.23 |
% |
|
| FHLB stock |
11,668 |
|
74 |
|
2.52 |
% |
|
16,413 |
|
93 |
|
2.25 |
% |
|
17,268 |
|
92 |
|
2.11 |
% |
|
| Total investment securities |
1,369,295 |
|
7,092 |
|
2.06 |
% |
|
1,496,000 |
|
8,044 |
|
2.14 |
% |
|
1,630,198 |
|
8,395 |
|
2.04 |
% |
|
| Total interest-earning assets |
8,940,341 |
|
101,007 |
|
4.49 |
% |
|
8,977,969 |
|
97,849 |
|
4.34 |
% |
|
9,028,228 |
|
96,495 |
|
4.24 |
% |
|
|
Non-interest-earning assets |
904,846 |
|
|
|
|
913,991 |
|
|
|
|
870,169 |
|
|
|
|
| Total assets |
$ |
9,845,187 |
|
|
|
|
$ |
9,891,960 |
|
|
|
|
$ |
9,898,397 |
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing checking accounts |
$ |
876,904 |
|
197 |
|
0.09 |
% |
|
$ |
837,930 |
|
188 |
|
0.09 |
% |
|
$ |
1,127,541 |
|
234 |
|
0.08 |
% |
|
| Savings accounts |
1,470,548 |
|
493 |
|
0.13 |
% |
|
1,371,911 |
|
449 |
|
0.13 |
% |
|
1,595,451 |
|
420 |
|
0.10 |
% |
|
| Money market accounts |
1,541,258 |
|
677 |
|
0.17 |
% |
|
1,564,906 |
|
749 |
|
0.19 |
% |
|
1,311,383 |
|
881 |
|
0.27 |
% |
|
| Certificates of deposit |
1,089,337 |
|
1,237 |
|
0.45 |
% |
|
1,173,630 |
|
1,398 |
|
0.47 |
% |
|
1,418,774 |
|
1,611 |
|
0.45 |
% |
|
| Total interest-bearing deposits |
4,978,047 |
|
2,604 |
|
0.21 |
% |
|
4,948,377 |
|
2,784 |
|
0.22 |
% |
|
5,453,149 |
|
3,146 |
|
0.23 |
% |
|
| Non-interest-bearing deposits |
3,193,172 |
|
— |
|
— |
% |
|
3,120,279 |
|
— |
|
— |
% |
|
2,665,676 |
|
— |
|
— |
% |
|
| Total deposits |
8,171,219 |
|
2,604 |
|
0.13 |
% |
|
8,068,656 |
|
2,784 |
|
0.14 |
% |
|
8,118,825 |
|
3,146 |
|
0.15 |
% |
|
| Other
interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FHLB advances |
32,932 |
|
79 |
|
0.95 |
% |
|
152,198 |
|
256 |
|
0.67 |
% |
|
178,399 |
|
287 |
|
0.64 |
% |
|
| Other borrowings |
107,819 |
|
76 |
|
0.28 |
% |
|
111,016 |
|
82 |
|
0.29 |
% |
|
99,515 |
|
73 |
|
0.29 |
% |
|
| Junior subordinated debentures |
140,212 |
|
1,077 |
|
3.06 |
% |
|
140,212 |
|
1,019 |
|
2.89 |
% |
|
140,212 |
|
890 |
|
2.52 |
% |
|
| Total borrowings |
280,963 |
|
1,232 |
|
1.74 |
% |
|
403,426 |
|
1,357 |
|
1.34 |
% |
|
418,126 |
|
1,250 |
|
1.19 |
% |
|
| Total funding liabilities |
8,452,182 |
|
3,836 |
|
0.18 |
% |
|
8,472,082 |
|
4,141 |
|
0.19 |
% |
|
8,536,951 |
|
4,396 |
|
0.20 |
% |
|
| Other
non-interest-bearing liabilities(2) |
67,536 |
|
|
|
|
68,566 |
|
|
|
|
54,967 |
|
|
|
|
| Total liabilities |
8,519,718 |
|
|
|
|
8,540,648 |
|
|
|
|
8,591,918 |
|
|
|
|
|
Shareholders' equity |
1,325,469 |
|
|
|
|
1,351,312 |
|
|
|
|
1,306,479 |
|
|
|
|
| Total liabilities and shareholders' equity |
$ |
9,845,187 |
|
|
|
|
$ |
9,891,960 |
|
|
|
|
$ |
9,898,397 |
|
|
|
|
| Net
interest income/rate spread |
|
$ |
97,171 |
|
4.31 |
% |
|
|
$ |
93,708 |
|
4.15 |
% |
|
|
$ |
92,099 |
|
4.04 |
% |
|
| Net
interest margin |
|
|
4.32 |
% |
|
|
|
4.15 |
% |
|
|
|
4.05 |
% |
|
|
Additional Key Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on
average assets |
|
|
0.92 |
% |
|
|
|
0.96 |
% |
|
|
|
0.28 |
% |
|
| Return on
average equity |
|
|
6.84 |
% |
|
|
|
7.02 |
% |
|
|
|
2.09 |
% |
|
| Average
equity/average assets |
|
|
13.46 |
% |
|
|
|
13.66 |
% |
|
|
|
13.20 |
% |
|
| Average
interest-earning assets/average interest-bearing liabilities |
|
|
170.00 |
% |
|
|
|
167.76 |
% |
|
|
|
153.77 |
% |
|
| Average
interest-earning assets/average funding liabilities |
|
|
105.78 |
% |
|
|
|
105.97 |
% |
|
|
|
105.75 |
% |
|
|
Non-interest income/average assets |
|
|
0.79 |
% |
|
|
|
0.95 |
% |
|
|
|
0.74 |
% |
|
|
Non-interest expense/average assets |
|
|
3.23 |
% |
|
|
|
3.18 |
% |
|
|
|
4.02 |
% |
|
| Efficiency
ratio(4) |
|
|
68.47 |
% |
|
|
|
67.47 |
% |
|
|
|
90.76 |
% |
|
| Adjusted
efficiency ratio(5) |
|
|
65.32 |
% |
|
|
|
63.61 |
% |
|
|
|
70.78 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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 FHLB advances
and junior subordinated debentures. |
| (3) Yields and costs have not been adjusted for
the effect of tax-exempt interest. |
| (4) Non-interest expense divided by the total of
net interest income (before provision for loan losses) and
non-interest income. |
| (5) Adjusted non-interest expense divided by
adjusted revenue. Adjusted revenue excludes net gain (loss)
on sale of securities and fair value adjustments. Adjusted
non-interest expense excludes acquisition related costs,
amortization of core deposit intangibles (CDI), real estate
operations expense, and state/municipal business and use
taxes. These represent non-GAAP financial measures. See
also Non-GAAP Financial Measures reconciliation tables on the last
four pages of the press release tables. |
|
ADDITIONAL FINANCIAL INFORMATION |
| (dollars
in thousands) |
| (rates /
ratios annualized) |
| |
|
|
|
|
|
|
|
|
ANALYSIS OF NET INTEREST SPREAD |
Twelve months ended |
| |
December 31, 2016 |
|
December 31, 2015 |
| |
Average Balance |
Interest and Dividends |
Yield/Cost(3) |
|
Average Balance |
Interest and Dividends |
Yield/Cost(3) |
|
Interest-earning assets: |
|
|
|
|
|
|
|
| Mortgage loans |
$ |
5,807,397 |
|
$ |
282,419 |
|
4.86 |
% |
|
$ |
3,754,386 |
|
$ |
183,260 |
|
4.88 |
% |
| Commercial/agricultural loans |
1,485,390 |
|
68,405 |
|
4.61 |
% |
|
1,076,440 |
|
46,053 |
|
4.28 |
% |
| Consumer and other loans |
141,460 |
|
8,788 |
|
6.21 |
% |
|
130,367 |
|
7,979 |
|
6.12 |
% |
| Total loans(1) |
7,434,247 |
|
359,612 |
|
4.84 |
% |
|
4,961,193 |
|
237,292 |
|
4.78 |
% |
| Mortgage-backed securities |
931,111 |
|
19,328 |
|
2.08 |
% |
|
490,002 |
|
9,049 |
|
1.85 |
% |
| Other securities |
454,977 |
|
11,814 |
|
2.60 |
% |
|
311,701 |
|
7,646 |
|
2.45 |
% |
| Interest-bearing deposits with banks |
94,456 |
|
395 |
|
0.42 |
% |
|
122,479 |
|
334 |
|
0.27 |
% |
| FHLB stock |
16,119 |
|
328 |
|
2.03 |
% |
|
16,768 |
|
112 |
|
0.67 |
% |
| Total investment securities |
1,496,663 |
|
31,865 |
|
2.13 |
% |
|
940,950 |
|
17,141 |
|
1.82 |
% |
| Total interest-earning assets |
8,930,910 |
|
391,477 |
|
4.38 |
% |
|
5,902,143 |
|
254,433 |
|
4.31 |
% |
|
Non-interest-earning assets |
904,181 |
|
|
|
|
413,503 |
|
|
|
| Total assets |
$ |
9,835,091 |
|
|
|
|
$ |
6,315,646 |
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
| Interest-bearing checking accounts |
$ |
859,621 |
|
767 |
|
0.09 |
% |
|
$ |
634,398 |
|
518 |
|
0.08 |
% |
| Savings accounts |
1,370,014 |
|
1,796 |
|
0.13 |
% |
|
1,134,849 |
|
1,511 |
|
0.13 |
% |
| Money market accounts |
1,575,877 |
|
3,098 |
|
0.20 |
% |
|
747,019 |
|
1,538 |
|
0.21 |
% |
| Certificates of deposit |
1,208,702 |
|
5,444 |
|
0.45 |
% |
|
928,545 |
|
4,818 |
|
0.52 |
% |
| Total interest-bearing deposits |
5,014,214 |
|
11,105 |
|
0.22 |
% |
|
3,444,811 |
|
8,385 |
|
0.24 |
% |
| Non-interest-bearing deposits |
3,033,604 |
|
— |
|
— |
% |
|
1,764,539 |
|
— |
|
— |
% |
| Total deposits |
8,047,818 |
|
11,105 |
|
0.14 |
% |
|
5,209,350 |
|
8,385 |
|
0.16 |
% |
| Other
interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| FHLB advances |
141,885 |
|
953 |
|
0.67 |
% |
|
49,808 |
|
311 |
|
0.62 |
% |
| Other borrowings |
108,427 |
|
310 |
|
0.29 |
% |
|
94,176 |
|
211 |
|
0.22 |
% |
| Junior subordinated debentures |
140,212 |
|
4,040 |
|
2.88 |
% |
|
132,597 |
|
3,247 |
|
2.45 |
% |
| Total borrowings |
390,524 |
|
5,303 |
|
1.36 |
% |
|
276,581 |
|
3,769 |
|
1.36 |
% |
| Total funding liabilities |
8,438,342 |
|
16,408 |
|
0.19 |
% |
|
5,485,931 |
|
12,154 |
|
0.22 |
% |
| Other
non-interest-bearing liabilities(2) |
65,508 |
|
|
|
|
17,051 |
|
|
|
| Total liabilities |
8,503,850 |
|
|
|
|
5,502,982 |
|
|
|
|
Shareholders' equity |
1,331,241 |
|
|
|
|
812,664 |
|
|
|
| Total liabilities and shareholders' equity |
$ |
9,835,091 |
|
|
|
|
$ |
6,315,646 |
|
|
|
| Net
interest income/rate spread |
|
$ |
375,069 |
|
4.19 |
% |
|
|
$ |
242,279 |
|
4.09 |
% |
| Net
interest margin |
|
|
4.20 |
% |
|
|
|
4.10 |
% |
|
Additional Key Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on
average assets |
|
|
0.87 |
% |
|
|
|
0.72 |
% |
| Return on
average equity |
|
|
6.41 |
% |
|
|
|
5.56 |
% |
| Average
equity/average assets |
|
|
13.54 |
% |
|
|
|
12.87 |
% |
| Average
interest-earning assets/average interest-bearing liabilities |
|
|
165.24 |
% |
|
|
|
158.60 |
% |
| Average
interest-earning assets/average funding liabilities |
|
|
105.84 |
% |
|
|
|
107.59 |
% |
|
Non-interest income/average assets |
|
|
0.85 |
% |
|
|
|
0.99 |
% |
|
Non-interest expense/average assets |
|
|
3.28 |
% |
|
|
|
3.75 |
% |
| Efficiency
ratio(4) |
|
|
70.41 |
% |
|
|
|
77.68 |
% |
| Adjusted
efficiency ratio(5) |
|
|
65.26 |
% |
|
|
|
67.02 |
% |
| |
|
|
|
|
|
|
|
|
|
| (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 FHLB advances
and junior subordinated debentures. |
| (3) Yields and costs have not been adjusted for
the effect of tax-exempt interest. |
| (4) Non-interest expense divided by the total of
net interest income (before provision for loan losses) and
non-interest income. |
| (5) Adjusted non-interest expense divided by
adjusted revenue. Adjusted revenue excludes net gain (loss)
on sale of securities and fair value adjustments. Adjusted
non-interest expense excludes acquisition related costs,
amortization of CDI, real estate operations expense, and
state/municipal business and use taxes. These represent
non-GAAP financial measures. See also Non-GAAP Financial
Measures reconciliation tables on the last four 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. Where applicable,
comparable earnings information using GAAP financial measures is
also presented. |
| |
|
|
|
|
|
|
|
|
|
| REVENUE FROM
CORE OPERATIONS |
Quarters Ended |
|
Twelve months ended |
| |
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| Net interest income
before provision for loan losses |
$ |
97,171 |
|
|
$ |
93,708 |
|
|
$ |
92,099 |
|
|
$ |
375,069 |
|
|
$ |
242,279 |
|
| Total non-interest
income |
19,463 |
|
|
23,512 |
|
|
18,356 |
|
|
83,470 |
|
|
62,292 |
|
| Total GAAP revenue |
116,634 |
|
|
117,220 |
|
|
110,455 |
|
|
458,539 |
|
|
304,571 |
|
| Exclude
net (gain) loss on sale of securities |
(311 |
) |
|
(891 |
) |
|
3 |
|
|
(843 |
) |
|
540 |
|
| Exclude
change in valuation of financial instruments carried at fair
value |
1,148 |
|
|
1,124 |
|
|
1,547 |
|
|
2,620 |
|
|
813 |
|
| Revenue from core
operations (non-GAAP) |
$ |
117,471 |
|
|
$ |
117,453 |
|
|
$ |
112,005 |
|
|
$ |
460,316 |
|
|
$ |
305,924 |
|
| INCOME FROM
CORE OPERATIONS |
Quarters Ended |
|
Twelve months ended |
| |
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| Income before provision
for taxes (GAAP) |
$ |
34,747 |
|
|
$ |
36,128 |
|
|
$ |
10,201 |
|
|
$ |
129,640 |
|
|
$ |
67,971 |
|
| Exclude
net (gain) loss on sale of securities |
(311 |
) |
|
(891 |
) |
|
3 |
|
|
(843 |
) |
|
540 |
|
| Exclude
change in valuation of financial instruments carried at fair
value |
1,148 |
|
|
1,124 |
|
|
1,547 |
|
|
2,620 |
|
|
813 |
|
| Exclude
acquisition costs |
788 |
|
|
1,720 |
|
|
18,369 |
|
|
11,733 |
|
|
26,110 |
|
| Income from core
operations before provision for taxes (non-GAAP) |
$ |
36,372 |
|
|
$ |
38,081 |
|
|
$ |
30,120 |
|
|
$ |
143,150 |
|
|
$ |
95,434 |
|
| ACQUISITION
ACCOUNTING IMPACT ON NET INTEREST MARGIN |
Quarters Ended |
|
Twelve months ended |
| |
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| Net interest income
before provision for loan losses (GAAP) |
$ |
97,171 |
|
|
$ |
93,708 |
|
|
$ |
92,099 |
|
|
$ |
375,069 |
|
|
$ |
242,279 |
|
| Exclude
discount accretion on purchased loans |
(3,635 |
) |
|
(2,446 |
) |
|
(2,579 |
) |
|
(10,984 |
) |
|
(3,566 |
) |
| Exclude
premium amortization on acquired certificates of deposit |
(315 |
) |
|
(316 |
) |
|
(572 |
) |
|
(1,552 |
) |
|
(748 |
) |
| Net interest income
before acquisition accounting impact (non-GAAP) |
$ |
93,221 |
|
|
$ |
90,946 |
|
|
$ |
88,948 |
|
|
$ |
362,533 |
|
|
$ |
237,965 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average
interest-earning assets (GAAP) |
$ |
8,940,341 |
|
|
$ |
8,977,969 |
|
|
$ |
9,028,228 |
|
|
$ |
8,930,910 |
|
|
$ |
5,902,143 |
|
| Exclude
average net loan discount on acquired loans |
32,773 |
|
|
36,958 |
|
|
43,109 |
|
|
38,561 |
|
|
17,615 |
|
| Average
interest-earning assets before acquired loan discount
(non-GAAP) |
$ |
8,973,114 |
|
|
$ |
9,014,927 |
|
|
$ |
9,071,337 |
|
|
$ |
8,969,471 |
|
|
$ |
5,919,758 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest margin
(GAAP) |
4.32 |
% |
|
4.15 |
% |
|
4.05 |
% |
|
4.20 |
% |
|
4.10 |
% |
| Exclude
impact on net interest margin from discount accretion |
(0.16 |
) |
|
(0.11 |
) |
|
(0.11 |
) |
|
(0.12 |
) |
|
(0.06 |
) |
| Exclude
impact on net interest margin from CD premium amortization |
(0.01 |
) |
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.01 |
) |
| Exclude
impact of net loan discount on average earning assets |
(0.02 |
) |
|
(0.02 |
) |
|
(0.03 |
) |
|
(0.02 |
) |
|
(0.01 |
) |
| Net margin before
acquisition accounting impact (non-GAAP) |
4.13 |
% |
|
4.01 |
% |
|
3.89 |
% |
|
4.04 |
% |
|
4.02 |
% |
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands
except shares and per share data) |
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters Ended |
|
Twelve months ended |
| |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| NON-INTEREST
INCOME/EXPENSE FROM CORE OPERATIONS |
|
|
|
|
|
|
|
|
|
|
| Total non-interest
income (GAAP) |
|
$ |
19,463 |
|
|
$ |
23,512 |
|
|
$ |
18,356 |
|
|
$ |
83,470 |
|
|
$ |
62,292 |
|
| Exclude
net (gain) loss on sale of securities |
|
(311 |
) |
|
(891 |
) |
|
3 |
|
|
(843 |
) |
|
540 |
|
| Exclude
change in valuation of financial instruments carried at fair
value |
|
1,148 |
|
|
1,124 |
|
|
1,547 |
|
|
2,620 |
|
|
813 |
|
| Non-interest income
from core operations (non-GAAP) |
|
$ |
20,300 |
|
|
$ |
23,745 |
|
|
$ |
19,906 |
|
|
$ |
85,247 |
|
|
$ |
63,645 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Total non-interest
expense (GAAP) |
|
$ |
79,857 |
|
|
$ |
79,092 |
|
|
$ |
100,254 |
|
|
$ |
322,869 |
|
|
$ |
236,600 |
|
| Exclude
acquisition related costs |
|
(788 |
) |
|
(1,720 |
) |
|
(18,369 |
) |
|
(11,733 |
) |
|
(26,110 |
) |
| Non-interest expense
from core operations (non-GAAP) |
|
$ |
79,069 |
|
|
$ |
77,372 |
|
|
$ |
81,885 |
|
|
$ |
311,136 |
|
|
$ |
210,490 |
|
| |
|
Quarters Ended |
|
Twelve months ended |
| |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| EARNINGS FROM
CORE OPERATIONS |
|
|
|
|
|
|
|
|
|
|
| Net income (GAAP) |
|
$ |
22,804 |
|
|
$ |
23,851 |
|
|
$ |
6,893 |
|
|
$ |
85,385 |
|
|
$ |
45,222 |
|
| Exclude
net (gain) loss on sale of securities |
|
(311 |
) |
|
(891 |
) |
|
3 |
|
|
(843 |
) |
|
540 |
|
| Exclude
change in valuation of financial instruments carried at fair
value |
|
1,148 |
|
|
1,124 |
|
|
1,547 |
|
|
2,620 |
|
|
813 |
|
| Exclude
acquisition-related costs |
|
788 |
|
|
1,720 |
|
|
18,369 |
|
|
11,733 |
|
|
26,110 |
|
| Exclude
related tax expense (benefit) |
|
(585 |
) |
|
(703 |
) |
|
(6,425 |
) |
|
(4,857 |
) |
|
(8,552 |
) |
| Total earnings from
core operations (non-GAAP) |
|
$ |
23,844 |
|
|
$ |
25,101 |
|
|
$ |
20,387 |
|
|
$ |
94,038 |
|
|
$ |
64,133 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per
share (GAAP) |
|
$ |
0.69 |
|
|
$ |
0.70 |
|
|
$ |
0.20 |
|
|
$ |
2.52 |
|
|
$ |
1.89 |
|
| Diluted core earnings
per share (non-GAAP) |
|
$ |
0.72 |
|
|
$ |
0.74 |
|
|
$ |
0.60 |
|
|
$ |
2.78 |
|
|
$ |
2.69 |
|
| |
|
|
|
|
|
|
|
|
|
|
| NET EFFECT OF
ACQUISITION-RELATED COSTS ON EARNINGS |
|
|
|
|
|
|
|
|
|
|
| Acquisition-related
costs |
|
$ |
(788 |
) |
|
$ |
(1,720 |
) |
|
$ |
(18,369 |
) |
|
$ |
(11,733 |
) |
|
$ |
(26,110 |
) |
| Related tax
benefit |
|
284 |
|
|
619 |
|
|
5,867 |
|
|
4,217 |
|
|
8,065 |
|
| Total net effect of
acquisition-related costs on earnings |
|
$ |
(504 |
) |
|
$ |
(1,101 |
) |
|
$ |
(12,502 |
) |
|
$ |
(7,516 |
) |
|
$ |
(18,045 |
) |
| |
|
|
|
|
|
|
|
|
|
|
| Diluted weighted
average shares outstanding |
|
33,201,333 |
|
|
34,124,611 |
|
|
33,934,426 |
|
|
33,853,511 |
|
|
23,866,621 |
|
| Total net effect of
acquisition-related costs on diluted weighted average earnings per
share |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.76 |
) |
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
Quarters Ended |
|
Twelve months ended |
| |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
| ADJUSTED
EFFICIENCY RATIO |
|
|
|
|
|
|
|
|
|
|
| Non-interest expense
(GAAP) |
|
$ |
79,857 |
|
|
$ |
79,092 |
|
|
$ |
100,254 |
|
|
$ |
322,869 |
|
|
$ |
236,600 |
|
| Exclude
acquisition-related costs |
|
(788 |
) |
|
(1,720 |
) |
|
(18,369 |
) |
|
(11,733 |
) |
|
(26,110 |
) |
| Exclude
CDI amortization |
|
(1,722 |
) |
|
(1,724 |
) |
|
(1,896 |
) |
|
(7,061 |
) |
|
(3,164 |
) |
| Exclude
state/municipal tax expense |
|
(952 |
) |
|
(956 |
) |
|
(505 |
) |
|
(3,516 |
) |
|
(1,889 |
) |
| Exclude
REO gain (loss) |
|
338 |
|
|
21 |
|
|
(207 |
) |
|
(175 |
) |
|
(397 |
) |
| Adjusted non-interest
expense (non-GAAP) |
|
$ |
76,733 |
|
|
$ |
74,713 |
|
|
$ |
79,277 |
|
|
$ |
300,384 |
|
|
$ |
205,040 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income
before provision for loan losses (GAAP) |
|
$ |
97,171 |
|
|
$ |
93,708 |
|
|
$ |
92,099 |
|
|
$ |
375,069 |
|
|
$ |
242,279 |
|
| Non-interest income
(GAAP) |
|
19,463 |
|
|
23,512 |
|
|
18,356 |
|
|
83,470 |
|
|
62,292 |
|
| Total revenue |
|
116,634 |
|
|
117,220 |
|
|
110,455 |
|
|
458,539 |
|
|
304,571 |
|
| Exclude
net (gain) loss on sale of securities |
|
(311 |
) |
|
(891 |
) |
|
3 |
|
|
(843 |
) |
|
540 |
|
| Exclude
net change in valuation of financial instruments carried at fair
value |
|
1,148 |
|
|
1,124 |
|
|
1,547 |
|
|
2,620 |
|
|
813 |
|
| Adjusted revenue
(non-GAAP) |
|
$ |
117,471 |
|
|
$ |
117,453 |
|
|
$ |
112,005 |
|
|
$ |
460,316 |
|
|
$ |
305,924 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio
(GAAP) |
|
68.47 |
% |
|
67.47 |
% |
|
90.76 |
% |
|
70.41 |
% |
|
77.68 |
% |
| Adjusted efficiency
ratio (non-GAAP) |
|
65.32 |
% |
|
63.61 |
% |
|
70.78 |
% |
|
65.26 |
% |
|
67.02 |
% |
| |
|
|
|
|
|
|
| |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| TANGIBLE COMMON
SHAREHOLDERS' EQUITY TO TANGIBLE ASSETS |
|
|
|
|
|
|
| Shareholders' equity
(GAAP) |
|
$ |
1,305,710 |
|
|
$ |
1,331,271 |
|
|
$ |
1,300,059 |
|
| Exclude
goodwill and other intangible assets, net |
|
274,745 |
|
|
276,517 |
|
|
285,210 |
|
| Tangible common
shareholders' equity (non-GAAP) |
|
$ |
1,030,965 |
|
|
$ |
1,054,754 |
|
|
$ |
1,014,849 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total assets
(GAAP) |
|
$ |
9,793,668 |
|
|
$ |
9,841,028 |
|
|
$ |
9,796,298 |
|
| Exclude
goodwill and other intangible assets, net |
|
274,745 |
|
|
276,517 |
|
|
285,210 |
|
| Total tangible assets
(non-GAAP) |
|
$ |
9,518,923 |
|
|
$ |
9,564,511 |
|
|
$ |
9,511,088 |
|
| Common shareholders'
equity to total assets (GAAP) |
|
13.33 |
% |
|
13.53 |
% |
|
13.27 |
% |
| Tangible common
shareholders' equity to tangible assets (non-GAAP) |
|
10.83 |
% |
|
11.03 |
% |
|
10.67 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TANGIBLE COMMON
SHAREHOLDERS' EQUITY PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
| Tangible common
shareholders' equity |
|
$ |
1,030,965 |
|
|
$ |
1,054,754 |
|
|
$ |
1,014,849 |
|
| Common shares
outstanding at end of period |
|
33,193,387 |
|
|
33,867,311 |
|
|
34,242,255 |
|
| Common shareholders'
equity (book value) per share (GAAP) |
|
$ |
39.34 |
|
|
$ |
39.31 |
|
|
$ |
37.97 |
|
| Tangible common
shareholders' equity (tangible book value) per share
(non-GAAP) |
|
$ |
31.06 |
|
|
$ |
31.14 |
|
|
$ |
29.64 |
|
| ADDITIONAL
FINANCIAL INFORMATION |
|
|
|
|
|
|
| (dollars in
thousands) |
|
|
|
|
|
|
| |
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Dec 31, 2015 |
| RATIO OF
ADJUSTED ALLOWANCE FOR LOAN LOSSES TO ADJUSTED LOANS |
|
|
|
|
|
|
| Loans receivable
(GAAP) |
|
$ |
7,451,148 |
|
|
$ |
7,398,637 |
|
|
$ |
7,314,504 |
|
| Net loan discount on
acquired loans |
|
31,110 |
|
|
34,867 |
|
|
43,657 |
|
| Adjusted loans
(non-GAAP) |
|
$ |
7,482,258 |
|
|
$ |
7,433,504 |
|
|
$ |
7,358,161 |
|
| |
|
|
|
|
|
|
| Allowance for loan
losses (GAAP) |
|
$ |
85,997 |
|
|
$ |
84,220 |
|
|
$ |
78,008 |
|
| Net loan discount on
acquired loans |
|
31,110 |
|
|
34,867 |
|
|
43,657 |
|
| Adjusted allowance for
loan losses (non-GAAP) |
|
$ |
117,107 |
|
|
$ |
119,087 |
|
|
$ |
121,665 |
|
| |
|
|
|
|
|
|
| Allowance for loan
losses / Total loans (GAAP) |
|
1.15 |
% |
|
1.14 |
% |
|
1.07 |
% |
| Adjusted allowance for
loan losses / Adjusted loans (non-GAAP) |
|
1.57 |
% |
|
1.60 |
% |
|
1.65 |
% |
CONTACT:
MARK J. GRESCOVICH,
PRESIDENT & CEO
LLOYD W. BAKER, CFO
(509) 527-3636
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