Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent
company of Banner Bank, today reported net income of $39.6 million,
or $1.15 per diluted share, for the second quarter of 2023, a 29%
decrease compared to $55.6 million, or $1.61 per diluted share, for
the preceding quarter and a 17% decrease compared to $48.0 million,
or $1.39 per diluted share, for the second quarter of 2022. Net
interest income was $142.5 million in the second quarter of 2023,
compared to $153.3 million in the preceding quarter and $129.0
million in the second quarter a year ago. The decrease in net
interest income compared to the preceding quarter reflects an
increase in funding costs, while the increase from the prior year
quarter reflects an increase in yields on earning assets. Banner’s
second quarter 2023 results include $6.8 million in provision for
credit losses, compared to $524,000 recapture of provision for
credit losses in the preceding quarter and $4.5 million in
provision for credit losses in the second quarter of 2022. In
addition, the second quarter of 2022 included a $7.8 million gain
related to the sale of four branches. For the six months ended
June 30, 2023, net income increased 4% to $95.1 million, or
$2.76 per diluted share, compared to net income of $91.9 million,
or $2.66 per diluted share for the prior year. Banner’s results for
the first six months of 2023 include $6.2 million in provision for
credit losses, compared to $2.4 million in recapture of provision
for credit losses in 2022.
Banner announced that its Board of Directors
declared a regular quarterly cash dividend of $0.48 per share. The
dividend will be payable August 11, 2023, to common shareholders of
record on August 1, 2023.
“Our business model, which emphasizes moderate
risk and strong relationship banking, continues to serve us well in
these uncertain economic times,” said Mark Grescovich, President
and CEO. “Our performance for the second quarter of 2023 benefited
from loan growth and higher yields on interest-earning assets.
However, the higher interest rate environment and its effect on
funding costs impacted our net interest margin during the quarter.
Our continued focus on growing client relationships is serving us
well, with core deposits representing 90% of total deposits at
quarter end. Banner’s overarching goals continue to be to do the
right thing for our clients, communities, colleagues, our company
and shareholders; and to provide a consistent and reliable source
of commerce and capital through all economic cycles and change
events,” concluded Grescovich.
At June 30, 2023, Banner Corporation had
$15.58 billion in assets, $10.33 billion in net loans and $13.10
billion in deposits. Banner operates 137 full service branch
offices, including branches located in eight of the top 20 largest
western Metropolitan Statistical Areas by population.
Second Quarter
2023 Highlights
- Revenues decreased 7% to $150.9
million, compared to $162.6 million in the preceding quarter, and
decreased 3% compared to $156.2 million in the second quarter a
year ago.
- Adjusted revenue* (the total of net
interest income and total non-interest income adjusted for the net
gain or loss on the sale of securities and the net change in
valuation of financial instruments) was $158.6 million in the
second quarter of 2023, compared to $170.4 million in the preceding
quarter and $148.3 million in the second quarter a year ago.
- Net interest income decreased 7% to
$142.5 million in the second quarter of 2023, compared to $153.3
million in the preceding quarter and increased 10% compared to
$129.0 million in the second quarter a year ago.
- Net interest margin, on a tax
equivalent basis, was 4.00%, compared to 4.30% in the preceding
quarter and 3.44% in the second quarter a year ago.
- Mortgage banking revenues decreased
37% to $1.7 million, compared to $2.7 million in the preceding
quarter, and decreased 58% compared to $4.0 million in the second
quarter a year ago.
- Return on average assets was 1.02%,
compared to 1.44% in the preceding quarter and 1.16% in the second
quarter a year ago.
- Net loans receivable increased 3%
to $10.33 billion at June 30, 2023, compared to $10.02 billion
at March 31, 2023, and increased 11% compared to $9.33 billion at
June 30, 2022.
- Non-performing assets increased to
$28.7 million, or 0.18% of total assets, at June 30, 2023,
compared to $27.1 million, or 0.17% of total assets at March 31,
2023, and $19.1 million, or 0.12% of total assets, at June 30,
2022.
- The allowance for credit losses -
loans was $144.7 million, or 1.38% of total loans receivable, as of
June 30, 2023, compared to $141.5 million, or 1.39% of total
loans receivable as of March 31, 2023 and $128.7 million, or 1.36%
of total loans receivable as of June 30, 2022.
- Core deposits (non-interest-bearing
and interest-bearing transaction and savings accounts) decreased to
$11.74 billion at June 30, 2023, compared to $12.20 billion at
March 31, 2023, and to $13.46 billion a year ago. Core deposits
represented 90% of total deposits at June 30, 2023.
- Banner Bank’s uninsured deposits
were 31% of total deposits at June 30, 2023, compared to 33%
at March 31, 2023.
- Banner Bank’s uninsured deposits
excluding collateralized public deposits and affiliate deposits
were 28% of total deposits at June 30, 2023, compared to 31%
at March 31, 2023.
- Available borrowing capacity was
$4.02 billion at June 30, 2023, compared to $4.25 billion at
March 31, 2023.
- On balance sheet liquidity was
$3.07 billion at June 30, 2023, compared to $3.40 billion at
March 31, 2023.
- Dividends paid to shareholders were
$0.48 per share in the quarter ended June 30, 2023.
- Common shareholders’ equity per
share increased 1% to $44.91 at June 30, 2023, compared to
$44.64 at the preceding quarter end, and increased 3% from $43.46 a
year ago.
- Tangible common shareholders’
equity per share* increased 1% to $33.83 at June 30, 2023,
compared to $33.52 at the preceding quarter end, and increased 5%
from $32.20 a year ago.
*Non-GAAP (Generally Accepted Accounting
Principles) measure; See, “Additional Financial Information -
Non-GAAP Financial Measures” on the final two pages of this press
release for a discussion and reconciliation of non-GAAP financial
measures.
Income Statement Review
Net interest income was $142.5 million in the
second quarter of 2023, compared to $153.3 million in the preceding
quarter and $129.0 million in the second quarter a year ago. Net
interest margin on a tax equivalent basis was 4.00% for the second
quarter of 2023, a 30 basis-point decrease compared to 4.30% in the
preceding quarter and a 56 basis-point increase compared to 3.44%
in the second quarter a year ago. Net interest margin for the
current quarter was impacted by an increase in funding costs due to
an increase in the mix of higher cost CDs and the lag effect of
prior market rate increases on current period deposit costs,
partially offset by increased yields on loans due to the rising
interest rates during the quarter.
Average yields on interest-earning assets
increased 12 basis points to 4.80% for the second quarter of 2023,
compared to 4.68% for the preceding quarter and increased 126 basis
points compared to 3.54% in the second quarter a year ago. Since
March 2022, in response to inflation, the Federal Open Market
Committee (“FOMC”) of the Federal Reserve System has increased the
target range for the federal funds rate by 500 basis points,
including 25 basis points during the second quarter of 2023, to a
range of 5.00% to 5.25%. The increase in average yields on
interest-earning assets during the current quarter reflects the
benefit of variable rate interest-earning assets repricing higher,
as well as new loans being originated at higher interest rates.
Average loan yields increased 13 basis points to 5.51% compared to
5.38% in the preceding quarter and increased 97 basis points
compared to 4.54% in the second quarter a year ago. The increase in
average loan yields during the current quarter compared to the
preceding and prior year quarters was primarily the result of
rising interest rates. Total deposit costs were 0.64% in the second
quarter of 2023, which was a 36 basis-point increase compared to
the preceding quarter and a 58 basis-point increase compared to the
second quarter a year ago. The increase in the costs of deposits
was due to elevated competition for deposits, an increase in the
mix of higher cost CDs and the lag effect of prior market rate
increases on current period deposit costs. The average rate paid on
FHLB advances was 5.29% in the second quarter of 2023, which was a
45 basis-point increase compared to 4.84% in the preceding quarter.
There were no FHLB advances during second quarter a year ago. The
average rate paid on other borrowings in the second quarter of 2023
was 1.64%, which was a 97 basis-point increase compared to 0.67% in
the preceding quarter and a 151 basis-point increase compared to
0.13% in the second quarter a year ago. The total cost of funding
liabilities was 0.86% during the second quarter of 2023, a 46
basis-point increase compared to 0.40% in the preceding quarter and
a 75 basis-point increase compared to 0.11% in the second quarter a
year ago.
A $6.8 million provision for credit losses was
recorded in the current quarter (comprised of a $3.6 million
provision for credit losses - loans, a $1.2 million provision for
credit losses - unfunded loan commitments, a $2.0 million
provision for credit losses - available for sale securities and a
$16,000 recapture of provision for credit losses - held-to-maturity
debt securities). This compares to a $524,000 recapture of
provision for credit losses in the prior quarter (comprised of a
$774,000 provision for credit losses - loans, a $1.3 million
recapture of provision for credit losses - unfunded loan
commitments and a $20,000 recapture of provision for credit losses
- held-to-maturity debt securities) and a $4.5 million provision
for credit losses in the second quarter a year ago (comprised of a
$3.1 million provision for credit losses - loans, a $1.4 million
provision for credit losses - unfunded loan commitments and a
$4,000 provision for credit losses - held-to-maturity debt
securities). The provision for credit losses for the current
quarter primarily reflects increased loan balances and unfunded
loan commitments, a deterioration in forecasted economic conditions
and rating downgrades on bank subordinated debt investments. The
recapture of provision for credit losses for the preceding quarter
primarily reflected a decrease in unfunded construction loan
commitments, which was partially offset by higher net loan
charge-offs during the preceding quarter.
Total non-interest income was $8.4 million in
the second quarter of 2023, compared to $9.3 million in the
preceding quarter and $27.2 million in the second quarter a year
ago. The decrease in non-interest income during the current quarter
compared to the prior quarter was primarily due to a $1.0 million
decrease in mortgage banking revenues. The decrease in non-interest
income during the current quarter compared to the prior year
quarter was primarily due to a $2.3 million decrease in mortgage
banking revenues, a $4.5 million net loss recognized on the sale of
securities during the current quarter, a $3.2 million net loss for
fair value adjustments on financial instruments carried at fair
value in the current quarter, and a $7.8 million gain recognized on
the sale of four branches in the second quarter of 2022. Total
non-interest income was $17.7 million for the six months ended
June 30, 2023, compared to $46.6 million for the same period a
year earlier.
Mortgage banking revenues, including gains on
one- to four-family and multifamily loan sales and loan servicing
fees, were $1.7 million in the second quarter of 2023, compared to
$2.7 million in the preceding quarter and $4.0 million in the
second quarter a year ago. The decrease from the preceding quarter
primarily reflects a downward lower of cost or market adjustment on
multifamily held for sale loans. The decrease from the second
quarter of 2022 primarily reflects a reduction in the volume and a
decrease in the gain on sale margin for one- to four-family loans
sold. The reduction in the volume of one- to four-family loans sold
compared to the prior year quarter primarily reflects reduced
refinancing activity, as well as decreased purchase activity as
interest rates increased. Home purchase activity accounted for 93%
of one- to four-family mortgage loan originations in the second
quarter of 2023, compared to 88% in the preceding quarter and 82%
in the second quarter of 2022. Mortgage banking revenue included a
$757,000 lower of cost or market downward adjustment on multifamily
held for sale loans for the current quarter due to increases in
market interest rates during the second quarter. There were no
multifamily loans sold during the second quarter of 2023. This
compares to a $295,000 lower of cost or market upward adjustment
recorded during the preceding quarter due to decreases in market
interest rates during the first quarter as well as $87,000 of gain
recognized on the sale of multifamily loans. During the second
quarter of 2022, a $458,000 lower of cost or market downward
adjustment was recorded due to increases in market rates. There
were no multifamily loans sold during the second quarter of
2022.
Second quarter 2023 non-interest income also
included a $3.2 million net loss for fair value adjustments as a
result of changes in the valuation of financial instruments carried
at fair value, principally comprised of certain investment
securities held for trading and limited partnership investments,
and a $4.5 million net loss on the sale of securities. In the
preceding quarter, results included a $552,000 net loss for fair
value adjustments and a $7.3 million net loss on the sale of
securities. In the second quarter a year ago, results included a
$69,000 net gain for fair value adjustments and a $32,000 net gain
on the sale of securities.
Total revenue decreased 7% to $150.9 million for
the second quarter of 2023, compared to $162.6 million in the
preceding quarter, and 3% compared to $156.2 million in the second
quarter of 2022. Adjusted revenue* (the total of net interest
income and total non-interest income adjusted for the net gain or
loss on the sale of securities and the net change in valuation of
financial instruments) was $158.6 million in the second quarter of
2023, compared to $170.4 million in the preceding quarter and
$148.3 million in the second quarter a year ago. In the first six
months of the year, adjusted revenue* was $329.0 million, compared
to $285.9 million in the first six months of 2022.
Total non-interest expense was $95.4 million in
the second quarter of 2023, compared to $94.6 million in the
preceding quarter and $92.1 million in the second quarter of 2022.
The increase in non-interest expense for the current quarter
compared to the prior quarter primarily reflects a $583,000
increase in salary and employee benefits expense and a $949,000
increase in deposit insurance expense, partially offset by a $1.0
million increase in capitalized loan origination costs, primarily
due to increased loan production. The increase in non-interest
expense for the current quarter compared to the same quarter a year
ago primarily reflects an increase in salary and employee benefits
expense, a decrease in capitalized loan origination costs, an
increase in information and computer data services expense and an
increase in deposit insurance expense, partially offset by
decreases in occupancy and equipment expenses and payment and card
processing services expense. Year-to-date, total non-interest
expense was $190.0 million, compared to $183.2 million in the same
period a year earlier. Banner’s efficiency ratio was 63.21% for the
second quarter, compared to 58.20% in the preceding quarter and
58.94% in the same quarter a year ago. Banner’s adjusted efficiency
ratio* was 58.58% for the second quarter, compared to 54.23% in the
preceding quarter and 59.46% in the year ago quarter.
Federal and state income tax expense totaled
$9.2 million for the second quarter of 2023 resulting in an
effective tax rate of 18.8%, reflecting the benefits from tax
exempt income. Banner’s statutory income tax rate for the quarter
ended June 30, 2023, was 23.5%, representing a blend of the
statutory federal income tax rate of 21.0% and apportioned effects
of the state income tax rates.
*Non-GAAP financial measures. See, “Additional
Financial Information - Non-GAAP Financial Measures” on the final
two pages of this press release for a discussion and reconciliation
of non-GAAP financial measures.
Balance Sheet Review
Total assets increased to $15.58 billion at
June 30, 2023, compared to $15.53 billion at March 31, 2023,
and decreased 5% from $16.39 billion at June 30, 2022. The
total of securities and interest-bearing deposits held at other
banks totaled $3.64 billion at June 30, 2023, compared to
$3.99 billion at March 31, 2023 and $5.45 billion at June 30,
2022. The decrease compared to the prior quarter was primarily due
to the sale of $127.4 million of securities as well as
$150.0 million of reverse repurchase agreements maturing
during the current quarter. The decrease compared to the prior year
quarter was primarily due to an additional $150.0 million of
reverse repurchase agreements maturing during the first quarter of
2023, the sale of securities and a decrease in interest-bearing
deposits held at other banks. The average effective duration of the
securities portfolio was approximately 6.8 years at June 30,
2023, compared to 6.5 years at June 30, 2022.
Total loans receivable increased to $10.47
billion at June 30, 2023, compared to $10.16 billion at March
31, 2023, and $9.46 billion at June 30, 2022. Commercial real
estate loans increased $60.2 million to $3.63 billion at
June 30, 2023, compared to $3.57 billion at March 31, 2023.
One- to four-family residential loans increased 7% to $1.34 billion
at June 30, 2023, compared to $1.25 billion at March 31, 2023,
and increased 54% compared to $868.2 million a year ago. The
increase in one- to four-family residential loans was primarily the
result of one- to four-family construction loans converting to one-
to four-family portfolio loans upon the completion of the
construction phase and new production. Commercial business loans
increased 3% to $2.30 billion at June 30, 2023, compared to
$2.23 billion at March 31, 2023, and increased 11% compared to
$2.07 billion a year ago, primarily due to new loan production.
Multifamily real estate loans increased to $699.8 million at
June 30, 2023, compared to $696.9 million at March 31, 2023,
and increased 22% compared to $575.2 million a year ago. The
increase in multifamily loans compared to a year ago was primarily
due to growth in affordable housing loan balances as well as the
transfer of $54.0 million of multifamily held for sale loans
to the held for investment loan portfolio during the fourth quarter
of 2022.
Loans held for sale were $60.6 million at
June 30, 2023, compared to $49.0 million at March 31, 2023,
and $69.2 million at June 30, 2022. One- to four- family
residential mortgage loans sold totaled $62.6 million in the
current quarter, compared to $40.5 million in the preceding
quarter and $88.6 million in the second quarter a year ago,
while there were no multifamily loans sold during the second
quarter of 2023, compared to $7.6 million sold in the
preceding quarter and none sold in the second quarter a year
ago.
Total deposits decreased to $13.10 billion at
June 30, 2023, compared to $13.15 billion at March 31, 2023,
and $14.21 billion a year ago. The decline in deposits was
primarily due to interest rate sensitive clients moving a portion
of their non-operating deposit balances to higher yielding
investments as well as seasonal outflows for tax payments.
Non-interest-bearing account balances decreased 7% to $5.37 billion
at June 30, 2023, compared to $5.76 billion at March 31, 2023,
and 16% compared to $6.39 billion a year ago. Core deposits were
90% of total deposits at June 30, 2023, 93% of total deposits
at March 31, 2023 and 95% of total deposits at June 30, 2022.
Certificates of deposit increased 43% to $1.36 billion at
June 30, 2023, compared to $949.9 million at March 31, 2023,
and increased 79% compared to $756.3 million a year earlier. The
increase in certificates of deposits during the current quarter was
principally due to a $203.6 million increase in brokered deposits
and clients seeking higher yields moving funds from core deposit
accounts to higher yielding certificates of deposits.
Banner Bank’s uninsured deposits were $4.06
billion or 31% of total deposits at June 30, 2023, compared to
$4.42 billion or 33% of total deposits at March 31, 2023. The
uninsured deposit calculation includes $309.7 million and $277.7
million of collateralized public deposits at June 30, 2023 and
March 31, 2023, respectively. Uninsured deposits also include cash
held by the holding company of $95.0 million and $88.0 million at
June 30, 2023 and March 31, 2023, respectively. Banner Bank’s
uninsured deposits, excluding collateralized public deposits and
cash held at the holding company, were 28% of deposits at
June 30, 2023, compared to 31% of total deposits at March 31,
2023.
Banner had $270.0 million of FHLB borrowings at
June 30, 2023, compared to $170.0 million at March 31,
2023 and none a year ago. At June 30, 2023, Banner’s
off-balance sheet liquidity included additional borrowing capacity
of $2.64 billion at the FHLB and $1.26 billion at the Federal
Reserve as well as federal funds line of credit agreements with
other financial institutions of $125.0 million.
Subordinated notes, net of issuance costs, were
$92.6 million at June 30, 2023 compared to
$99.0 million at March 31, 2023 and $98.8 million a year
ago. The decrease in subordinated notes was due to Banner Bank’s
purchase of $6.5 million of Banner’s subordinated debt during
the second quarter of 2023.
At June 30, 2023, total common
shareholders’ equity was $1.54 billion, or 9.90% of assets,
compared to $1.53 billion or 9.86% of assets at March 31, 2023, and
$1.49 billion or 9.07% of assets a year ago. The increase in total
common shareholders’ equity at June 30, 2023 compared to March
31, 2023 was primarily due to a $22.9 million increase in retained
earnings as a result of $39.6 million in net income during the
second quarter of 2023, partially offset by a $13.8 million
increase in accumulated other comprehensive loss, primarily due to
a decrease in the fair value of the security portfolio as a result
of an increase in interest rates during the second quarter of 2023,
and the accrual of $16.7 million of cash dividends during the
quarter. The increase in total common shareholders’ equity from
June 30, 2022 reflects a $134.8 million increase in retained
earnings, partially offset by an $83.5 million increase in
accumulated other comprehensive loss, primarily due to a decrease
in the fair value of the security portfolio as a result of an
increase in interest rates during 2022, and the payment of cash
dividends. At June 30, 2023, tangible common shareholders’
equity*, which excludes goodwill and other intangible assets, net,
was $1.16 billion, or 7.64% of tangible assets*, compared to $1.15
billion, or 7.59% of tangible assets, at March 31, 2023, and $1.10
billion, or 6.88% of tangible assets, a year ago.
Banner and Banner Bank continue to maintain
capital levels in excess of the requirements to be categorized as
“well-capitalized.” At June 30, 2023, Banner’s estimated
common equity Tier 1 capital ratio was 11.59%, its estimated Tier 1
leverage capital to average assets ratio was 10.22%, and its
estimated total capital to risk-weighted assets ratio was 14.14%.
These regulatory capital ratios are estimates, pending completion
and filing of Banner’s regulatory reports.
*Non-GAAP financial measures. See, “Additional
Financial Information - Non-GAAP Financial Measures” on the final
two pages of this press release for a discussion and reconciliation
of non-GAAP financial measures.
Credit Quality
The allowance for credit losses - loans was
$144.7 million, or 1.38% of total loans receivable and 513% of
non-performing loans, at June 30, 2023, compared to $141.5
million, or 1.39% of total loans receivable and 528% of
non-performing loans, at March 31, 2023, and $128.7 million, or
1.36% of total loans receivable and 688% of non-performing loans,
at June 30, 2022. In addition to the allowance for credit
losses - loans, Banner maintains an allowance for credit losses -
unfunded loan commitments, which was $14.7 million at June 30,
2023, compared to $13.4 million at March 31, 2023, and $14.2
million at June 30, 2022. Net loan charge-offs totaled
$336,000 in the second quarter of 2023, compared to net loan
charge-offs of $782,000 in the preceding quarter and net loan
recoveries of $87,000 in the second quarter a year ago.
Non-performing loans were $28.2 million at June 30, 2023,
compared to $26.8 million at March 31, 2023, and $18.7 million a
year ago.
Substandard loans were $145.0 million at
June 30, 2023, compared to $148.0 million at March 31, 2023,
and $154.5 million a year ago. The decreases from the prior quarter
and a year ago primarily reflect risk rating upgrades as well as
the payoff of substandard loans.
Total non-performing assets were $28.7 million,
or 0.18% of total assets, at June 30, 2023, compared to $27.1
million, or 0.17% of total assets, at March 31, 2023, and $19.1
million, or 0.12% of total assets, a year ago.
Conference Call
Banner will host a conference call on Thursday
July 20, 2023, at 8:00 a.m. PDT, to discuss its second quarter
results. Interested investors may listen to the call live at
www.bannerbank.com. Investment professionals are invited to dial
(833) 470-1428 using access code 066243 to participate in the call.
A replay will be available for one week at (866) 813-9403 using
access code 362835 or at www.bannerbank.com.
About the Company
Banner Corporation is a $15.58 billion bank
holding company operating one commercial bank in four Western
states through a network of branches offering a full range of
deposit services and business, commercial real estate,
construction, residential, agricultural and consumer loans. Visit
Banner Bank on the Web at www.bannerbank.com.
Forward-Looking Statements
When used in this press release and in other
documents filed with or furnished to the Securities and Exchange
Commission (the “SEC”), in press releases or other public
stockholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases
“may,” “believe,” “will,” “will likely result,” “are expected to,”
“will continue,” “is anticipated,” “estimate,” “project,” “plans,”
“potential,” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. You are cautioned not to
place undue reliance on any forward-looking statements, which speak
only as of the date such statements are made and based only on
information then actually known to Banner. Banner does not
undertake and specifically disclaims any obligation to revise any
forward-looking statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such
statements. These statements may relate to future financial
performance, strategic plans or objectives, revenues or earnings
projections, or other financial information. By their nature, these
statements are subject to numerous uncertainties that could cause
actual results to differ materially from those anticipated in the
statements and could negatively affect Banner’s operating and stock
price performance.
Factors that could cause Banner’s actual results
to differ materially from those described in the forward-looking
statements, include but are not limited to, the following: (1)
potential adverse impacts to economic conditions in our local
market areas, other markets where the Company has lending
relationships, or other aspects of the Company’s business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation, a potential recession or slowed economic growth caused
by increasing political instability from acts of war including
Russia’s invasion of Ukraine, as well as supply chain disruptions;
(2) higher inflation and the impact of current and future monetary
policies of the Federal Reserve in response thereto; (3) the impact
of bank failures or adverse developments at other banks and related
negative press about the banking industry in general on investor
and depositor sentiment; (4) the credit risks of lending
activities, including changes in the level and direction of loan
delinquencies and write-offs and changes in estimates of the
adequacy of the allowance for credit losses, which could
necessitate additional provisions for credit losses, resulting both
from loans originated and loans acquired from other financial
institutions; (5) results of examinations by regulatory
authorities, including the possibility that any such regulatory
authority may, among other things, require increases in the
allowance for credit losses or writing down of assets or impose
restrictions or penalties with respect to Banner’s activities; (6)
competitive pressures among depository institutions; (7) the effect
of inflation on interest rate movements and their impact on client
behavior and net interest margin; (8) the transition away from the
London Interbank Offered Rate (LIBOR) toward new interest rate
benchmarks; (9) the impact of repricing and competitors’ pricing
initiatives on loan and deposit products; (10) fluctuations in real
estate values; (11) the ability to adapt successfully to
technological changes to meet clients’ needs and developments in
the market place; (12) the ability to access cost-effective
funding; (13) disruptions, security breaches or other adverse
events, failures or interruptions in, or attacks on, information
technology systems or on the third-party vendors who perform
critical processing functions; (14) changes in financial markets;
(15) changes in economic conditions in general and in Washington,
Idaho, Oregon and California in particular; (16) the costs, effects
and outcomes of litigation; (17) legislation or regulatory changes,
including but not limited to changes in regulatory policies and
principles, or the interpretation of regulatory capital or other
rules, other governmental initiatives affecting the financial
services industry and changes in federal and/or state tax laws or
interpretations thereof by taxing authorities; (18) changes in
accounting principles, policies or guidelines; (19) future
acquisitions by Banner of other depository institutions or lines of
business; (20) future goodwill impairment due to changes in
Banner’s business or changes in market conditions; (21) the costs
associated with Banner Forward; (22) other economic, competitive,
governmental, regulatory, and technological factors affecting our
operations, pricing, products and services; and (23) other risks
detailed from time to time in Banner’s other reports filed with and
furnished to the Securities and Exchange Commission including
Banner’s Quarterly Reports on Form 10-Q and Annual Reports on Form
10-K.
|
|
| RESULTS OF
OPERATIONS |
|
Quarters Ended |
|
Six Months Ended |
| (in thousands except shares and
per share data) |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
|
Jun 30, 2023 |
|
Jun 30, 2022 |
| INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable |
|
$ |
140,848 |
|
|
$ |
133,257 |
|
|
$ |
104,506 |
|
|
$ |
274,105 |
|
|
$ |
204,856 |
|
|
Mortgage-backed securities |
|
|
18,285 |
|
|
|
18,978 |
|
|
|
16,819 |
|
|
|
37,263 |
|
|
|
30,928 |
|
|
Securities and cash equivalents |
|
|
12,676 |
|
|
|
14,726 |
|
|
|
11,676 |
|
|
|
27,402 |
|
|
|
20,108 |
|
|
Total interest income |
|
|
171,809 |
|
|
|
166,961 |
|
|
|
133,001 |
|
|
|
338,770 |
|
|
|
255,892 |
|
| INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
20,539 |
|
|
|
9,244 |
|
|
|
2,008 |
|
|
|
29,783 |
|
|
|
4,094 |
|
|
Federal Home Loan Bank (FHLB) advances |
|
|
5,157 |
|
|
|
1,264 |
|
|
|
— |
|
|
|
6,421 |
|
|
|
291 |
|
|
Other borrowings |
|
|
771 |
|
|
|
381 |
|
|
|
80 |
|
|
|
1,152 |
|
|
|
164 |
|
|
Subordinated debt |
|
|
2,824 |
|
|
|
2,760 |
|
|
|
1,902 |
|
|
|
5,584 |
|
|
|
3,678 |
|
|
Total interest expense |
|
|
29,291 |
|
|
|
13,649 |
|
|
|
3,990 |
|
|
|
42,940 |
|
|
|
8,227 |
|
|
Net interest income |
|
|
142,518 |
|
|
|
153,312 |
|
|
|
129,011 |
|
|
|
295,830 |
|
|
|
247,665 |
|
| PROVISION (RECAPTURE)
FOR CREDIT LOSSES |
|
|
6,764 |
|
|
|
(524 |
) |
|
|
4,534 |
|
|
|
6,240 |
|
|
|
(2,427 |
) |
|
Net interest income after provision (recapture) for credit
losses |
|
|
135,754 |
|
|
|
153,836 |
|
|
|
124,477 |
|
|
|
289,590 |
|
|
|
250,092 |
|
| NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Deposit fees and other service charges |
|
|
10,600 |
|
|
|
10,562 |
|
|
|
11,000 |
|
|
|
21,162 |
|
|
|
22,189 |
|
|
Mortgage banking operations |
|
|
1,686 |
|
|
|
2,691 |
|
|
|
3,978 |
|
|
|
4,377 |
|
|
|
8,418 |
|
|
Bank-owned life insurance |
|
|
2,386 |
|
|
|
2,188 |
|
|
|
2,239 |
|
|
|
4,574 |
|
|
|
3,870 |
|
|
Miscellaneous |
|
|
1,428 |
|
|
|
1,640 |
|
|
|
2,051 |
|
|
|
3,068 |
|
|
|
3,734 |
|
| |
|
|
16,100 |
|
|
|
17,081 |
|
|
|
19,268 |
|
|
|
33,181 |
|
|
|
38,211 |
|
|
Net (loss) gain on sale of securities |
|
|
(4,527 |
) |
|
|
(7,252 |
) |
|
|
32 |
|
|
|
(11,779 |
) |
|
|
467 |
|
|
Net change in valuation of financial instruments carried at fair
value |
|
|
(3,151 |
) |
|
|
(552 |
) |
|
|
69 |
|
|
|
(3,703 |
) |
|
|
118 |
|
|
Gain on sale of branches, including related deposits |
|
|
— |
|
|
|
— |
|
|
|
7,804 |
|
|
|
— |
|
|
|
7,804 |
|
|
Total non-interest income |
|
|
8,422 |
|
|
|
9,277 |
|
|
|
27,173 |
|
|
|
17,699 |
|
|
|
46,600 |
|
| NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Salary and employee benefits |
|
|
61,972 |
|
|
|
61,389 |
|
|
|
60,832 |
|
|
|
123,361 |
|
|
|
120,318 |
|
|
Less capitalized loan origination costs |
|
|
(4,457 |
) |
|
|
(3,431 |
) |
|
|
(7,222 |
) |
|
|
(7,888 |
) |
|
|
(13,452 |
) |
|
Occupancy and equipment |
|
|
11,994 |
|
|
|
11,970 |
|
|
|
13,284 |
|
|
|
23,964 |
|
|
|
26,504 |
|
|
Information and computer data services |
|
|
7,082 |
|
|
|
7,147 |
|
|
|
5,997 |
|
|
|
14,229 |
|
|
|
12,648 |
|
|
Payment and card processing services |
|
|
4,669 |
|
|
|
4,618 |
|
|
|
5,682 |
|
|
|
9,287 |
|
|
|
10,578 |
|
|
Professional and legal expenses |
|
|
2,400 |
|
|
|
2,121 |
|
|
|
2,878 |
|
|
|
4,521 |
|
|
|
5,058 |
|
|
Advertising and marketing |
|
|
940 |
|
|
|
806 |
|
|
|
822 |
|
|
|
1,746 |
|
|
|
1,283 |
|
|
Deposit insurance |
|
|
2,839 |
|
|
|
1,890 |
|
|
|
1,440 |
|
|
|
4,729 |
|
|
|
2,964 |
|
|
State and municipal business and use taxes |
|
|
1,229 |
|
|
|
1,300 |
|
|
|
1,004 |
|
|
|
2,529 |
|
|
|
2,166 |
|
|
Real estate operations, net |
|
|
75 |
|
|
|
(277 |
) |
|
|
(121 |
) |
|
|
(202 |
) |
|
|
(200 |
) |
|
Amortization of core deposit intangibles |
|
|
991 |
|
|
|
1,050 |
|
|
|
1,425 |
|
|
|
2,041 |
|
|
|
2,849 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
793 |
|
|
Miscellaneous |
|
|
5,671 |
|
|
|
6,038 |
|
|
|
6,032 |
|
|
|
11,709 |
|
|
|
11,739 |
|
|
Total non-interest expense |
|
|
95,405 |
|
|
|
94,621 |
|
|
|
92,053 |
|
|
|
190,026 |
|
|
|
183,248 |
|
|
Income before provision for income taxes |
|
|
48,771 |
|
|
|
68,492 |
|
|
|
59,597 |
|
|
|
117,263 |
|
|
|
113,444 |
|
| PROVISION
FOR INCOME TAXES |
|
|
9,180 |
|
|
|
12,937 |
|
|
|
11,632 |
|
|
|
22,117 |
|
|
|
21,516 |
|
| NET
INCOME |
|
$ |
39,591 |
|
|
$ |
55,555 |
|
|
$ |
47,965 |
|
|
$ |
95,146 |
|
|
$ |
91,928 |
|
| Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.15 |
|
|
$ |
1.62 |
|
|
$ |
1.40 |
|
|
$ |
2.77 |
|
|
$ |
2.68 |
|
|
Diluted |
|
$ |
1.15 |
|
|
$ |
1.61 |
|
|
$ |
1.39 |
|
|
$ |
2.76 |
|
|
$ |
2.66 |
|
| Cumulative dividends declared
per common share |
|
$ |
0.48 |
|
|
$ |
0.48 |
|
|
$ |
0.44 |
|
|
$ |
0.96 |
|
|
$ |
0.88 |
|
| Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
34,373,434 |
|
|
|
34,239,533 |
|
|
|
34,307,001 |
|
|
|
34,306,853 |
|
|
|
34,303,889 |
|
|
Diluted |
|
|
34,409,024 |
|
|
|
34,457,869 |
|
|
|
34,451,740 |
|
|
|
34,435,221 |
|
|
|
34,532,935 |
|
| Increase in common shares
outstanding |
|
|
36,087 |
|
|
|
114,522 |
|
|
|
(181,454 |
) |
|
|
150,609 |
|
|
|
(61,302 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL CONDITION |
|
|
|
|
|
|
|
|
|
Percentage Change |
| (in thousands except shares and
per share data) |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
229,918 |
|
|
$ |
194,629 |
|
|
$ |
198,154 |
|
|
$ |
294,717 |
|
|
18.1 |
% |
|
(22.0 |
)% |
| Interest-bearing deposits |
|
|
51,407 |
|
|
|
48,363 |
|
|
|
44,908 |
|
|
|
876,130 |
|
|
6.3 |
% |
|
(94.1 |
)% |
|
Total cash and cash equivalents |
|
|
281,325 |
|
|
|
242,992 |
|
|
|
243,062 |
|
|
|
1,170,847 |
|
|
15.8 |
% |
|
(76.0 |
)% |
| Securities - trading |
|
|
25,659 |
|
|
|
28,591 |
|
|
|
28,694 |
|
|
|
27,886 |
|
|
(10.3 |
)% |
|
(8.0 |
)% |
| Securities - available for
sale, amortized cost $2,879,179, $3,040,211, $3,218,777 and
$3,391,472, respectively |
|
|
2,465,960 |
|
|
|
2,653,860 |
|
|
|
2,789,031 |
|
|
|
3,094,422 |
|
|
(7.1 |
)% |
|
(20.3 |
)% |
| Securities - held to maturity,
fair value $933,116, $957,062, $942,180 and $1,036,301,
respectively |
|
|
1,098,570 |
|
|
|
1,109,595 |
|
|
|
1,117,588 |
|
|
|
1,151,765 |
|
|
(1.0 |
)% |
|
(4.6 |
)% |
|
Total securities |
|
|
3,590,189 |
|
|
|
3,792,046 |
|
|
|
3,935,313 |
|
|
|
4,274,073 |
|
|
(5.3 |
)% |
|
(16.0 |
)% |
|
FHLB stock |
|
|
20,800 |
|
|
|
16,800 |
|
|
|
12,000 |
|
|
|
10,000 |
|
|
23.8 |
% |
|
108.0 |
% |
| Securities purchased under
agreements to resell |
|
|
— |
|
|
|
150,000 |
|
|
|
300,000 |
|
|
|
300,000 |
|
|
(100.0 |
)% |
|
(100.0 |
)% |
| Loans held for sale |
|
|
60,612 |
|
|
|
49,016 |
|
|
|
56,857 |
|
|
|
69,161 |
|
|
23.7 |
% |
|
(12.4 |
)% |
| Loans receivable |
|
|
10,472,407 |
|
|
|
10,160,684 |
|
|
|
10,146,724 |
|
|
|
9,456,829 |
|
|
3.1 |
% |
|
10.7 |
% |
| Allowance for credit losses –
loans |
|
|
(144,680 |
) |
|
|
(141,457 |
) |
|
|
(141,465 |
) |
|
|
(128,702 |
) |
|
2.3 |
% |
|
12.4 |
% |
|
Net loans receivable |
|
|
10,327,727 |
|
|
|
10,019,227 |
|
|
|
10,005,259 |
|
|
|
9,328,127 |
|
|
3.1 |
% |
|
10.7 |
% |
| Accrued interest
receivable |
|
|
57,007 |
|
|
|
52,094 |
|
|
|
57,284 |
|
|
|
45,408 |
|
|
9.4 |
% |
|
25.5 |
% |
| Property and equipment,
net |
|
|
135,414 |
|
|
|
136,362 |
|
|
|
138,754 |
|
|
|
141,114 |
|
|
(0.7 |
)% |
|
(4.0 |
)% |
| Goodwill |
|
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
— |
% |
|
— |
% |
| Other intangibles, net |
|
|
7,399 |
|
|
|
8,390 |
|
|
|
9,440 |
|
|
|
11,870 |
|
|
(11.8 |
)% |
|
(37.7 |
)% |
| Bank-owned life insurance |
|
|
301,260 |
|
|
|
299,754 |
|
|
|
297,565 |
|
|
|
293,631 |
|
|
0.5 |
% |
|
2.6 |
% |
| Operating lease right-of-use
assets |
|
|
45,812 |
|
|
|
47,106 |
|
|
|
49,283 |
|
|
|
49,792 |
|
|
(2.7 |
)% |
|
(8.0 |
)% |
| Other assets |
|
|
384,070 |
|
|
|
346,695 |
|
|
|
355,493 |
|
|
|
318,053 |
|
|
10.8 |
% |
|
20.8 |
% |
|
Total assets |
|
$ |
15,584,736 |
|
|
$ |
15,533,603 |
|
|
$ |
15,833,431 |
|
|
$ |
16,385,197 |
|
|
0.3 |
% |
|
(4.9 |
)% |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
5,369,187 |
|
|
$ |
5,764,009 |
|
|
$ |
6,176,998 |
|
|
$ |
6,388,815 |
|
|
(6.8 |
)% |
|
(16.0 |
)% |
|
Interest-bearing transaction and savings accounts |
|
|
6,373,269 |
|
|
|
6,440,261 |
|
|
|
6,719,531 |
|
|
|
7,067,437 |
|
|
(1.0 |
)% |
|
(9.8 |
)% |
|
Interest-bearing certificates |
|
|
1,356,600 |
|
|
|
949,932 |
|
|
|
723,530 |
|
|
|
756,312 |
|
|
42.8 |
% |
|
79.4 |
% |
|
Total deposits |
|
|
13,099,056 |
|
|
|
13,154,202 |
|
|
|
13,620,059 |
|
|
|
14,212,564 |
|
|
(0.4 |
)% |
|
(7.8 |
)% |
| Advances from FHLB |
|
|
270,000 |
|
|
|
170,000 |
|
|
|
50,000 |
|
|
|
— |
|
|
58.8 |
% |
|
nm |
|
| Other borrowings |
|
|
193,019 |
|
|
|
214,564 |
|
|
|
232,799 |
|
|
|
234,737 |
|
|
(10.0 |
)% |
|
(17.8 |
)% |
| Subordinated notes, net |
|
|
92,646 |
|
|
|
99,046 |
|
|
|
98,947 |
|
|
|
98,752 |
|
|
(6.5 |
)% |
|
(6.2 |
)% |
| Junior subordinated debentures
at fair value |
|
|
67,237 |
|
|
|
74,703 |
|
|
|
74,857 |
|
|
|
72,229 |
|
|
(10.0 |
)% |
|
(6.9 |
)% |
| Operating lease
liabilities |
|
|
51,234 |
|
|
|
52,772 |
|
|
|
55,205 |
|
|
|
55,746 |
|
|
(2.9 |
)% |
|
(8.1 |
)% |
| Accrued expenses and other
liabilities |
|
|
223,565 |
|
|
|
191,326 |
|
|
|
200,839 |
|
|
|
180,999 |
|
|
16.9 |
% |
|
23.5 |
% |
| Deferred compensation |
|
|
45,466 |
|
|
|
45,295 |
|
|
|
44,293 |
|
|
|
44,340 |
|
|
0.4 |
% |
|
2.5 |
% |
|
Total liabilities |
|
|
14,042,223 |
|
|
|
14,001,908 |
|
|
|
14,376,999 |
|
|
|
14,899,367 |
|
|
0.3 |
% |
|
(5.8 |
)% |
| SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
1,294,934 |
|
|
|
1,293,225 |
|
|
|
1,293,959 |
|
|
|
1,289,499 |
|
|
0.1 |
% |
|
0.4 |
% |
| Retained earnings |
|
|
587,027 |
|
|
|
564,106 |
|
|
|
525,242 |
|
|
|
452,246 |
|
|
4.1 |
% |
|
29.8 |
% |
| Accumulated other
comprehensive loss |
|
|
(339,448 |
) |
|
|
(325,636 |
) |
|
|
(362,769 |
) |
|
|
(255,915 |
) |
|
4.2 |
% |
|
32.6 |
% |
|
Total shareholders’ equity |
|
|
1,542,513 |
|
|
|
1,531,695 |
|
|
|
1,456,432 |
|
|
|
1,485,830 |
|
|
0.7 |
% |
|
3.8 |
% |
|
Total liabilities and shareholders’ equity |
|
$ |
15,584,736 |
|
|
$ |
15,533,603 |
|
|
$ |
15,833,431 |
|
|
$ |
16,385,197 |
|
|
0.3 |
% |
|
(4.9 |
)% |
| Common Shares
Issued: |
|
|
|
|
|
|
|
|
|
|
|
|
| Shares outstanding at end of
period |
|
|
34,344,627 |
|
|
|
34,308,540 |
|
|
|
34,194,018 |
|
|
|
34,191,330 |
|
|
|
|
|
| Common shareholders’ equity
per share (1) |
|
$ |
44.91 |
|
|
$ |
44.64 |
|
|
$ |
42.59 |
|
|
$ |
43.46 |
|
|
|
|
|
| Common shareholders’ tangible
equity per share (1) (2) |
|
$ |
33.83 |
|
|
$ |
33.52 |
|
|
$ |
31.41 |
|
|
$ |
32.20 |
|
|
|
|
|
| Common shareholders’ tangible
equity to tangible assets (2) |
|
|
7.64 |
% |
|
|
7.59 |
% |
|
|
6.95 |
% |
|
|
6.88 |
% |
|
|
|
|
| Consolidated Tier 1 leverage
capital ratio |
|
|
10.20 |
% |
|
|
9.96 |
% |
|
|
9.45 |
% |
|
|
8.74 |
% |
|
|
|
|
|
(1) |
|
Calculation is based on number of common shares outstanding at the
end of the period rather than weighted average
shares outstanding. |
|
(2) |
|
Common shareholders’ tangible equity and tangible assets exclude
goodwill and other intangible assets. These ratios represent
non-GAAP financial measures. See, “Additional Financial Information
- Non-GAAP Financial Measures” on the final two pages of this press
release for a discussion and reconciliation of non-GAAP financial
measures. |
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Percentage Change |
| LOANS |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial real estate
(CRE): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner-occupied |
|
$ |
894,876 |
|
|
$ |
865,705 |
|
|
$ |
845,320 |
|
|
$ |
845,184 |
|
|
3.4 |
% |
|
5.9 |
% |
|
Investment properties |
|
|
1,558,176 |
|
|
|
1,520,261 |
|
|
|
1,589,975 |
|
|
|
1,628,105 |
|
|
2.5 |
% |
|
(4.3 |
)% |
|
Small balance CRE |
|
|
1,172,825 |
|
|
|
1,179,749 |
|
|
|
1,200,251 |
|
|
|
1,191,903 |
|
|
(0.6 |
)% |
|
(1.6 |
)% |
| Multifamily real estate |
|
|
699,830 |
|
|
|
696,864 |
|
|
|
645,071 |
|
|
|
575,183 |
|
|
0.4 |
% |
|
21.7 |
% |
| Construction, land and land
development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial construction |
|
|
183,765 |
|
|
|
191,051 |
|
|
|
184,876 |
|
|
|
193,984 |
|
|
(3.8 |
)% |
|
(5.3 |
)% |
|
Multifamily construction |
|
|
433,868 |
|
|
|
362,425 |
|
|
|
325,816 |
|
|
|
256,952 |
|
|
19.7 |
% |
|
68.9 |
% |
|
One- to four-family construction |
|
|
547,200 |
|
|
|
584,655 |
|
|
|
647,329 |
|
|
|
625,488 |
|
|
(6.4 |
)% |
|
(12.5 |
)% |
|
Land and land development |
|
|
345,053 |
|
|
|
329,438 |
|
|
|
328,475 |
|
|
|
320,041 |
|
|
4.7 |
% |
|
7.8 |
% |
| Commercial business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
|
1,308,685 |
|
|
|
1,260,478 |
|
|
|
1,275,813 |
|
|
|
1,176,287 |
|
|
3.8 |
% |
|
11.3 |
% |
|
SBA PPP |
|
|
4,541 |
|
|
|
5,569 |
|
|
|
7,594 |
|
|
|
30,651 |
|
|
(18.5 |
)% |
|
(85.2 |
)% |
|
Small business scored |
|
|
982,283 |
|
|
|
960,650 |
|
|
|
947,092 |
|
|
|
865,828 |
|
|
2.3 |
% |
|
13.5 |
% |
| Agricultural business,
including secured by farmland: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural business, including secured by farmland |
|
|
310,100 |
|
|
|
272,377 |
|
|
|
294,743 |
|
|
|
283,059 |
|
|
13.8 |
% |
|
9.6 |
% |
|
SBA PPP |
|
|
20 |
|
|
|
330 |
|
|
|
334 |
|
|
|
356 |
|
|
(93.9 |
)% |
|
(94.4 |
)% |
| One- to four-family
residential |
|
|
1,340,126 |
|
|
|
1,252,104 |
|
|
|
1,173,112 |
|
|
|
868,175 |
|
|
7.0 |
% |
|
54.4 |
% |
| Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer—home equity revolving lines of credit |
|
|
577,725 |
|
|
|
564,334 |
|
|
|
566,291 |
|
|
|
506,524 |
|
|
2.4 |
% |
|
14.1 |
% |
|
Consumer—other |
|
|
113,334 |
|
|
|
114,694 |
|
|
|
114,632 |
|
|
|
89,109 |
|
|
(1.2 |
)% |
|
27.2 |
% |
|
Total loans receivable |
|
$ |
10,472,407 |
|
|
$ |
10,160,684 |
|
|
$ |
10,146,724 |
|
|
$ |
9,456,829 |
|
|
3.1 |
% |
|
10.7 |
% |
| Loans 30 - 89 days past due
and on accrual |
|
$ |
6,259 |
|
|
$ |
14,037 |
|
|
$ |
17,186 |
|
|
$ |
8,336 |
|
|
|
|
|
| Total delinquent loans
(including loans on non-accrual), net |
|
$ |
29,135 |
|
|
$ |
37,251 |
|
|
$ |
32,371 |
|
|
$ |
18,123 |
|
|
|
|
|
| Total delinquent
loans / Total loans receivable |
|
|
0.28 |
% |
|
|
0.37 |
% |
|
|
0.32 |
% |
|
|
0.19 |
% |
|
|
|
|
| |
| LOANS BY GEOGRAPHIC
LOCATION |
|
|
|
|
|
|
|
|
|
|
|
Percentage Change |
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Amount |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington |
|
$ |
4,945,074 |
|
47.2 |
% |
|
$ |
4,808,821 |
|
$ |
4,777,546 |
|
$ |
4,436,092 |
|
2.8 |
% |
|
11.5 |
% |
| California |
|
|
2,537,121 |
|
24.2 |
% |
|
|
2,490,666 |
|
|
2,484,980 |
|
|
2,227,532 |
|
1.9 |
% |
|
13.9 |
% |
| Oregon |
|
|
1,913,929 |
|
18.3 |
% |
|
|
1,823,057 |
|
|
1,826,743 |
|
|
1,699,238 |
|
5.0 |
% |
|
12.6 |
% |
| Idaho |
|
|
595,065 |
|
5.7 |
% |
|
|
565,335 |
|
|
565,586 |
|
|
562,464 |
|
5.3 |
% |
|
5.8 |
% |
| Utah |
|
|
62,720 |
|
0.6 |
% |
|
|
67,085 |
|
|
75,967 |
|
|
94,508 |
|
(6.5 |
)% |
|
(33.6 |
)% |
| Other |
|
|
418,498 |
|
4.0 |
% |
|
|
405,720 |
|
|
415,902 |
|
|
436,995 |
|
3.1 |
% |
|
(4.2 |
)% |
| Total loans receivable |
|
$ |
10,472,407 |
|
100.0 |
% |
|
$ |
10,160,684 |
|
$ |
10,146,724 |
|
$ |
9,456,829 |
|
3.1 |
% |
|
10.7 |
% |
| |
ADDITIONAL FINANCIAL INFORMATION(dollars in
thousands)
| LOAN
ORIGINATIONS |
|
Quarters Ended |
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
|
Commercial real estate |
|
$ |
94,640 |
|
$ |
75,768 |
|
$ |
121,365 |
| Multifamily real estate |
|
|
3,441 |
|
|
35,520 |
|
|
2,959 |
| Construction and land |
|
|
488,980 |
|
|
247,842 |
|
|
643,832 |
| Commercial business |
|
|
128,404 |
|
|
131,826 |
|
|
245,997 |
| Agricultural business |
|
|
28,367 |
|
|
23,181 |
|
|
26,786 |
| One-to four-family
residential |
|
|
52,618 |
|
|
34,265 |
|
|
126,963 |
| Consumer |
|
|
112,555 |
|
|
60,888 |
|
|
193,853 |
| Total loan originations
(excluding loans held for sale) |
|
$ |
909,005 |
|
$ |
609,290 |
|
$ |
1,361,755 |
| |
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
| |
|
Quarters Ended |
| CHANGE IN
THE |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
| ALLOWANCE FOR CREDIT
LOSSES – LOANS |
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
141,457 |
|
|
$ |
141,465 |
|
|
$ |
125,471 |
|
| Provision for credit losses –
loans |
|
|
3,559 |
|
|
|
774 |
|
|
|
3,144 |
|
| Recoveries of loans previously
charged off: |
|
|
|
|
|
|
|
Commercial real estate |
|
|
74 |
|
|
|
184 |
|
|
|
129 |
|
|
One- to four-family real estate |
|
|
36 |
|
|
|
117 |
|
|
|
98 |
|
|
Commercial business |
|
|
524 |
|
|
|
119 |
|
|
|
234 |
|
|
Agricultural business, including secured by farmland |
|
|
2 |
|
|
|
109 |
|
|
|
14 |
|
|
Consumer |
|
|
117 |
|
|
|
169 |
|
|
|
112 |
|
| |
|
|
753 |
|
|
|
698 |
|
|
|
587 |
|
| Loans charged off: |
|
|
|
|
|
|
|
Construction and land |
|
|
(156 |
) |
|
|
— |
|
|
|
— |
|
|
One- to four-family real estate |
|
|
(4 |
) |
|
|
(30 |
) |
|
|
— |
|
|
Commercial business |
|
|
(566 |
) |
|
|
(1,158 |
) |
|
|
(248 |
) |
|
Consumer |
|
|
(363 |
) |
|
|
(292 |
) |
|
|
(252 |
) |
| |
|
|
(1,089 |
) |
|
|
(1,480 |
) |
|
|
(500 |
) |
|
Net (charge-offs) recoveries |
|
|
(336 |
) |
|
|
(782 |
) |
|
|
87 |
|
| Balance, end of period |
|
$ |
144,680 |
|
|
$ |
141,457 |
|
|
$ |
128,702 |
|
| Net (charge-offs) recoveries /
Average loans receivable |
|
|
(0.003 |
)% |
|
|
(0.008 |
)% |
|
|
0.001 |
% |
| |
|
|
|
|
|
|
| ALLOCATION
OF |
|
|
|
|
|
|
| ALLOWANCE FOR CREDIT
LOSSES – LOANS |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
|
Commercial real estate |
|
$ |
43,636 |
|
|
$ |
42,975 |
|
|
$ |
46,373 |
|
|
Multifamily real estate |
|
|
8,039 |
|
|
|
8,475 |
|
|
|
6,906 |
|
|
Construction and land |
|
|
29,844 |
|
|
|
28,433 |
|
|
|
26,939 |
|
|
One- to four-family real estate |
|
|
16,737 |
|
|
|
15,736 |
|
|
|
9,573 |
|
|
Commercial business |
|
|
33,880 |
|
|
|
33,735 |
|
|
|
28,673 |
|
|
Agricultural business, including secured by farmland |
|
|
3,573 |
|
|
|
3,094 |
|
|
|
3,002 |
|
|
Consumer |
|
|
8,971 |
|
|
|
9,009 |
|
|
|
7,236 |
|
|
Total allowance for credit losses – loans |
|
$ |
144,680 |
|
|
$ |
141,457 |
|
|
$ |
128,702 |
|
| Allowance for credit losses -
loans / Total loans receivable |
|
|
1.38 |
% |
|
|
1.39 |
% |
|
|
1.36 |
% |
| Allowance for credit losses -
loans / Non-performing loans |
|
|
513 |
% |
|
|
528 |
% |
|
|
688 |
% |
| |
|
Quarters Ended |
| CHANGE IN
THE |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
| ALLOWANCE FOR CREDIT
LOSSES - UNFUNDED LOAN COMMITMENTS |
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
13,443 |
|
$ |
14,721 |
|
|
$ |
12,860 |
| Provision (recapture) for
credit losses - unfunded loan commitments |
|
|
1,221 |
|
|
(1,278 |
) |
|
|
1,386 |
| Balance, end of period |
|
$ |
14,664 |
|
$ |
13,443 |
|
|
$ |
14,246 |
| |
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
| NON-PERFORMING
ASSETS |
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
| Loans on non-accrual
status: |
|
|
|
|
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
2,478 |
|
|
$ |
2,815 |
|
|
$ |
3,683 |
|
|
$ |
10,041 |
|
|
Construction and land |
|
|
2,280 |
|
|
|
172 |
|
|
|
181 |
|
|
|
200 |
|
|
One- to four-family |
|
|
7,605 |
|
|
|
6,789 |
|
|
|
5,236 |
|
|
|
2,002 |
|
|
Commercial business |
|
|
8,439 |
|
|
|
9,365 |
|
|
|
9,886 |
|
|
|
1,521 |
|
|
Agricultural business, including secured by farmland |
|
|
3,997 |
|
|
|
4,074 |
|
|
|
594 |
|
|
|
1,022 |
|
|
Consumer |
|
|
3,272 |
|
|
|
2,247 |
|
|
|
2,126 |
|
|
|
1,874 |
|
| |
|
|
28,071 |
|
|
|
25,462 |
|
|
|
21,706 |
|
|
|
16,660 |
|
| Loans more than 90 days
delinquent, still on accrual: |
|
|
|
|
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
|
|
|
|
Commercial |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
899 |
|
|
One- to four-family |
|
|
60 |
|
|
|
445 |
|
|
|
1,023 |
|
|
|
1,053 |
|
|
Commercial business |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20 |
|
|
Consumer |
|
|
49 |
|
|
|
865 |
|
|
|
264 |
|
|
|
83 |
|
| |
|
|
109 |
|
|
|
1,310 |
|
|
|
1,287 |
|
|
|
2,055 |
|
| Total non-performing
loans |
|
|
28,180 |
|
|
|
26,772 |
|
|
|
22,993 |
|
|
|
18,715 |
|
| REO |
|
|
546 |
|
|
|
340 |
|
|
|
340 |
|
|
|
340 |
|
| Other repossessed assets |
|
|
— |
|
|
|
17 |
|
|
|
17 |
|
|
|
17 |
|
|
Total non-performing assets |
|
$ |
28,726 |
|
|
$ |
27,129 |
|
|
$ |
23,350 |
|
|
$ |
19,072 |
|
| Total non-performing
assets to total assets |
|
|
0.18 |
% |
|
|
0.17 |
% |
|
|
0.15 |
% |
|
|
0.12 |
% |
| |
| LOANS BY CREDIT RISK
RATING |
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Pass |
|
$ |
10,315,687 |
|
$ |
10,008,385 |
|
$ |
10,000,493 |
|
$ |
9,274,655 |
| Special Mention |
|
|
11,745 |
|
|
4,251 |
|
|
9,081 |
|
|
27,711 |
| Substandard |
|
|
144,975 |
|
|
148,048 |
|
|
137,150 |
|
|
154,463 |
| Total |
|
$ |
10,472,407 |
|
$ |
10,160,684 |
|
$ |
10,146,724 |
|
$ |
9,456,829 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| DEPOSIT
COMPOSITION |
|
|
|
|
|
|
|
|
|
Percentage Change |
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
|
Non-interest-bearing |
|
$ |
5,369,187 |
|
$ |
5,764,009 |
|
$ |
6,176,998 |
|
$ |
6,388,815 |
|
(6.8 |
)% |
|
(16.0 |
)% |
| Interest-bearing checking |
|
|
1,908,402 |
|
|
1,794,477 |
|
|
1,811,153 |
|
|
1,859,582 |
|
6.3 |
% |
|
2.6 |
% |
| Regular savings accounts |
|
|
2,588,298 |
|
|
2,502,084 |
|
|
2,710,090 |
|
|
2,801,177 |
|
3.4 |
% |
|
(7.6 |
)% |
| Money market accounts |
|
|
1,876,569 |
|
|
2,143,700 |
|
|
2,198,288 |
|
|
2,406,678 |
|
(12.5 |
)% |
|
(22.0 |
)% |
|
Total interest-bearing transaction and savings accounts |
|
|
6,373,269 |
|
|
6,440,261 |
|
|
6,719,531 |
|
|
7,067,437 |
|
(1.0 |
)% |
|
(9.8 |
)% |
|
Total core deposits |
|
|
11,742,456 |
|
|
12,204,270 |
|
|
12,896,529 |
|
|
13,456,252 |
|
(3.8 |
)% |
|
(12.7 |
)% |
| Interest-bearing
certificates |
|
|
1,356,600 |
|
|
949,932 |
|
|
723,530 |
|
|
756,312 |
|
42.8 |
% |
|
79.4 |
% |
|
Total deposits |
|
$ |
13,099,056 |
|
$ |
13,154,202 |
|
$ |
13,620,059 |
|
$ |
14,212,564 |
|
(0.4 |
)% |
|
(7.8 |
)% |
| |
|
|
|
|
|
|
|
|
| GEOGRAPHIC
CONCENTRATION OF DEPOSITS |
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Percentage Change |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Amount |
|
Prior Qtr |
|
Prior Yr Qtr |
|
Washington |
|
$ |
7,255,731 |
|
55.5 |
% |
|
$ |
7,237,499 |
|
$ |
7,563,056 |
|
$ |
7,820,321 |
|
0.3 |
% |
|
(7.2 |
)% |
| Oregon |
|
|
2,914,267 |
|
22.2 |
% |
|
|
2,911,788 |
|
|
2,998,572 |
|
|
3,123,110 |
|
0.1 |
% |
|
(6.7 |
)% |
| California |
|
|
2,257,247 |
|
17.2 |
% |
|
|
2,309,174 |
|
|
2,331,524 |
|
|
2,520,493 |
|
(2.2 |
)% |
|
(10.4 |
)% |
| Idaho |
|
|
671,811 |
|
5.1 |
% |
|
|
695,741 |
|
|
726,907 |
|
|
748,640 |
|
(3.4 |
)% |
|
(10.3 |
)% |
| Total deposits |
|
$ |
13,099,056 |
|
100.0 |
% |
|
$ |
13,154,202 |
|
$ |
13,620,059 |
|
$ |
14,212,564 |
|
(0.4 |
)% |
|
(7.8 |
)% |
| |
|
|
|
|
|
|
|
|
| INCLUDED IN TOTAL
DEPOSITS |
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Public non-interest-bearing accounts |
|
$ |
191,591 |
|
$ |
177,913 |
|
$ |
212,533 |
|
$ |
220,694 |
| Public interest-bearing
transaction & savings accounts |
|
|
189,140 |
|
|
183,924 |
|
|
180,326 |
|
|
179,930 |
| Public interest-bearing
certificates |
|
|
45,840 |
|
|
26,857 |
|
|
26,810 |
|
|
37,415 |
|
Total public deposits |
|
$ |
426,571 |
|
$ |
388,694 |
|
$ |
419,669 |
|
$ |
438,039 |
| Collateralized public
deposits |
|
$ |
309,665 |
|
$ |
277,725 |
|
$ |
304,244 |
|
$ |
328,589 |
| Total brokered deposits |
|
$ |
203,649 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
| AVERAGE ACCOUNT
BALANCE PER DEPOSIT ACCOUNT |
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
| Number of deposit
accounts |
|
|
467,490 |
|
$ |
462,880 |
|
$ |
471,140 |
|
$ |
495,249 |
| Average account balance per
account |
|
$ |
28 |
|
$ |
28 |
|
$ |
29 |
|
$ |
29 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| ESTIMATED REGULATORY
CAPITAL RATIOS AS OF JUNE 30, 2023 |
|
Actual |
|
Minimum to becategorized as"Adequately
Capitalized" |
|
Minimum to becategorized
as"Well Capitalized" |
| |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Banner
Corporation-consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
$ |
1,832,222 |
|
14.14 |
% |
|
$ |
1,036,732 |
|
8.00 |
% |
|
$ |
1,295,915 |
|
10.00 |
% |
|
Tier 1 capital to risk-weighted assets |
|
|
1,587,820 |
|
12.25 |
% |
|
|
777,549 |
|
6.00 |
% |
|
|
777,549 |
|
6.00 |
% |
|
Tier 1 leverage capital to average assets |
|
|
1,587,820 |
|
10.22 |
% |
|
|
621,427 |
|
4.00 |
% |
|
|
n/a |
|
n/a |
|
|
Common equity tier 1 capital to risk-weighted assets |
|
|
1,501,320 |
|
11.59 |
% |
|
|
583,162 |
|
4.50 |
% |
|
|
n/a |
|
n/a |
|
| Banner Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total capital to risk-weighted
assets |
|
|
1,734,777 |
|
13.39 |
% |
|
|
1,036,372 |
|
8.00 |
% |
|
|
1,295,465 |
|
10.00 |
% |
|
Tier 1 capital to risk-weighted assets |
|
|
1,583,875 |
|
12.23 |
% |
|
|
777,279 |
|
6.00 |
% |
|
|
1,036,372 |
|
8.00 |
% |
|
Tier 1 leverage capital to average assets |
|
|
1,583,875 |
|
10.20 |
% |
|
|
621,054 |
|
4.00 |
% |
|
|
776,318 |
|
5.00 |
% |
|
Common equity tier 1 capital to risk-weighted assets |
|
|
1,583,875 |
|
12.23 |
% |
|
|
582,959 |
|
4.50 |
% |
|
|
842,052 |
|
6.50 |
% |
These regulatory capital ratios are estimates,
pending completion and filing of Banner’s regulatory reports.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (rates / ratios
annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ANALYSIS OF NET
INTEREST SPREAD |
|
Quarters Ended |
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
| |
|
AverageBalance |
|
InterestandDividends |
|
Yield /Cost(3) |
|
AverageBalance |
|
Interest andDividends |
|
Yield /Cost(3) |
|
AverageBalance |
|
InterestandDividends |
|
Yield /Cost(3) |
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for sale loans |
|
$ |
56,073 |
|
$ |
738 |
|
|
5.28 |
% |
|
$ |
52,657 |
|
$ |
671 |
|
|
5.17 |
% |
|
$ |
69,338 |
|
$ |
655 |
|
|
3.79 |
% |
|
Mortgage loans |
|
|
8,413,392 |
|
|
112,097 |
|
|
5.34 |
% |
|
|
8,267,386 |
|
|
106,900 |
|
|
5.24 |
% |
|
|
7,565,894 |
|
|
85,408 |
|
|
4.53 |
% |
|
Commercial/agricultural loans |
|
|
1,763,264 |
|
|
27,616 |
|
|
6.28 |
% |
|
|
1,702,553 |
|
|
25,176 |
|
|
6.00 |
% |
|
|
1,572,957 |
|
|
17,153 |
|
|
4.37 |
% |
|
SBA PPP loans |
|
|
5,247 |
|
|
67 |
|
|
5.12 |
% |
|
|
6,792 |
|
|
50 |
|
|
2.99 |
% |
|
|
45,739 |
|
|
1,056 |
|
|
9.26 |
% |
|
Consumer and other loans |
|
|
138,902 |
|
|
2,137 |
|
|
6.17 |
% |
|
|
137,096 |
|
|
2,115 |
|
|
6.26 |
% |
|
|
117,162 |
|
|
1,683 |
|
|
5.76 |
% |
|
Total loans(1) |
|
|
10,376,878 |
|
|
142,655 |
|
|
5.51 |
% |
|
|
10,166,484 |
|
|
134,912 |
|
|
5.38 |
% |
|
|
9,371,090 |
|
|
105,955 |
|
|
4.54 |
% |
|
Mortgage-backed securities |
|
|
2,958,700 |
|
|
18,429 |
|
|
2.50 |
% |
|
|
3,093,860 |
|
|
19,123 |
|
|
2.51 |
% |
|
|
3,170,915 |
|
|
16,965 |
|
|
2.15 |
% |
|
Other securities |
|
|
1,184,503 |
|
|
12,932 |
|
|
4.38 |
% |
|
|
1,404,355 |
|
|
15,095 |
|
|
4.36 |
% |
|
|
1,626,204 |
|
|
10,326 |
|
|
2.55 |
% |
|
Interest-bearing deposits with banks |
|
|
44,922 |
|
|
557 |
|
|
4.97 |
% |
|
|
53,584 |
|
|
608 |
|
|
4.60 |
% |
|
|
1,176,591 |
|
|
2,281 |
|
|
0.78 |
% |
|
FHLB stock |
|
|
25,611 |
|
|
157 |
|
|
2.46 |
% |
|
|
14,236 |
|
|
90 |
|
|
2.56 |
% |
|
|
10,000 |
|
|
100 |
|
|
4.01 |
% |
|
Total investment securities |
|
|
4,213,736 |
|
|
32,075 |
|
|
3.05 |
% |
|
|
4,566,035 |
|
|
34,916 |
|
|
3.10 |
% |
|
|
5,983,710 |
|
|
29,672 |
|
|
1.99 |
% |
|
Total interest-earning assets |
|
|
14,590,614 |
|
|
174,730 |
|
|
4.80 |
% |
|
|
14,732,519 |
|
|
169,828 |
|
|
4.68 |
% |
|
|
15,354,800 |
|
|
135,627 |
|
|
3.54 |
% |
| Non-interest-earning
assets |
|
|
939,100 |
|
|
|
|
|
|
921,217 |
|
|
|
|
|
|
1,282,649 |
|
|
|
|
|
Total assets |
|
$ |
15,529,714 |
|
|
|
|
|
$ |
15,653,736 |
|
|
|
|
|
$ |
16,637,449 |
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
|
$ |
1,870,605 |
|
|
2,331 |
|
|
0.50 |
% |
|
$ |
1,779,664 |
|
|
906 |
|
|
0.21 |
% |
|
$ |
1,924,896 |
|
|
289 |
|
|
0.06 |
% |
|
Savings accounts |
|
|
2,536,713 |
|
|
4,895 |
|
|
0.77 |
% |
|
|
2,615,173 |
|
|
1,884 |
|
|
0.29 |
% |
|
|
2,841,286 |
|
|
352 |
|
|
0.05 |
% |
|
Money market accounts |
|
|
1,957,553 |
|
|
6,007 |
|
|
1.23 |
% |
|
|
2,167,138 |
|
|
3,799 |
|
|
0.71 |
% |
|
|
2,431,456 |
|
|
531 |
|
|
0.09 |
% |
|
Certificates of deposit |
|
|
1,126,647 |
|
|
7,306 |
|
|
2.60 |
% |
|
|
810,821 |
|
|
2,655 |
|
|
1.33 |
% |
|
|
783,536 |
|
|
836 |
|
|
0.43 |
% |
|
Total interest-bearing deposits |
|
|
7,491,518 |
|
|
20,539 |
|
|
1.10 |
% |
|
|
7,372,796 |
|
|
9,244 |
|
|
0.51 |
% |
|
|
7,981,174 |
|
|
2,008 |
|
|
0.10 |
% |
|
Non-interest-bearing deposits |
|
|
5,445,960 |
|
|
— |
|
|
— |
% |
|
|
5,960,791 |
|
|
— |
|
|
— |
% |
|
|
6,456,432 |
|
|
— |
|
|
— |
% |
|
Total deposits |
|
|
12,937,478 |
|
|
20,539 |
|
|
0.64 |
% |
|
|
13,333,587 |
|
|
9,244 |
|
|
0.28 |
% |
|
|
14,437,606 |
|
|
2,008 |
|
|
0.06 |
% |
| Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
|
390,705 |
|
|
5,157 |
|
|
5.29 |
% |
|
|
105,984 |
|
|
1,264 |
|
|
4.84 |
% |
|
|
— |
|
|
— |
|
|
— |
% |
|
Other borrowings |
|
|
188,060 |
|
|
771 |
|
|
1.64 |
% |
|
|
229,459 |
|
|
381 |
|
|
0.67 |
% |
|
|
252,085 |
|
|
80 |
|
|
0.13 |
% |
|
Junior subordinated debentures and subordinated notes |
|
|
185,096 |
|
|
2,824 |
|
|
6.12 |
% |
|
|
189,178 |
|
|
2,760 |
|
|
5.92 |
% |
|
|
189,178 |
|
|
1,902 |
|
|
4.03 |
% |
|
Total borrowings |
|
|
763,861 |
|
|
8,752 |
|
|
4.60 |
% |
|
|
524,621 |
|
|
4,405 |
|
|
3.41 |
% |
|
|
441,263 |
|
|
1,982 |
|
|
1.80 |
% |
|
Total funding liabilities |
|
|
13,701,339 |
|
|
29,291 |
|
|
0.86 |
% |
|
|
13,858,208 |
|
|
13,649 |
|
|
0.40 |
% |
|
|
14,878,869 |
|
|
3,990 |
|
|
0.11 |
% |
| Other non-interest-bearing
liabilities(2) |
|
|
279,232 |
|
|
|
|
|
|
293,205 |
|
|
|
|
|
|
239,676 |
|
|
|
|
|
Total liabilities |
|
|
13,980,571 |
|
|
|
|
|
|
14,151,413 |
|
|
|
|
|
|
15,118,545 |
|
|
|
|
| Shareholders’ equity |
|
|
1,549,143 |
|
|
|
|
|
|
1,502,323 |
|
|
|
|
|
|
1,518,904 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
15,529,714 |
|
|
|
|
|
$ |
15,653,736 |
|
|
|
|
|
$ |
16,637,449 |
|
|
|
|
| Net interest income/rate
spread (tax equivalent) |
|
|
|
$ |
145,439 |
|
|
3.94 |
% |
|
|
|
$ |
156,179 |
|
|
4.28 |
% |
|
|
|
$ |
131,637 |
|
|
3.43 |
% |
| Net interest margin (tax
equivalent) |
|
|
|
|
|
4.00 |
% |
|
|
|
|
|
4.30 |
% |
|
|
|
|
|
3.44 |
% |
| Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjustments for taxable
equivalent basis |
|
|
|
|
(2,921 |
) |
|
|
|
|
|
|
(2,867 |
) |
|
|
|
|
|
|
(2,626 |
) |
|
|
| Net interest income and
margin, as reported |
|
|
|
$ |
142,518 |
|
|
3.92 |
% |
|
|
|
$ |
153,312 |
|
|
4.22 |
% |
|
|
|
$ |
129,011 |
|
|
3.37 |
% |
| Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
|
|
|
1.02 |
% |
|
|
|
|
|
1.44 |
% |
|
|
|
|
|
1.16 |
% |
| Return on average equity |
|
|
|
|
|
10.25 |
% |
|
|
|
|
|
15.00 |
% |
|
|
|
|
|
12.67 |
% |
| Average equity/average
assets |
|
|
|
|
|
9.98 |
% |
|
|
|
|
|
9.60 |
% |
|
|
|
|
|
9.13 |
% |
| Average interest-earning
assets/average interest-bearing liabilities |
|
|
|
|
|
176.74 |
% |
|
|
|
|
|
186.55 |
% |
|
|
|
|
|
182.31 |
% |
| Average interest-earning
assets/average funding liabilities |
|
|
|
|
|
106.49 |
% |
|
|
|
|
|
106.31 |
% |
|
|
|
|
|
103.20 |
% |
| Non-interest income/average
assets |
|
|
|
|
|
0.22 |
% |
|
|
|
|
|
0.24 |
% |
|
|
|
|
|
0.66 |
% |
| Non-interest expense/average
assets |
|
|
|
|
|
2.46 |
% |
|
|
|
|
|
2.45 |
% |
|
|
|
|
|
2.22 |
% |
| Efficiency ratio(4) |
|
|
|
|
|
63.21 |
% |
|
|
|
|
|
58.20 |
% |
|
|
|
|
|
58.94 |
% |
| Adjusted efficiency
ratio(5) |
|
|
|
|
|
58.58 |
% |
|
|
|
|
|
54.23 |
% |
|
|
|
|
|
59.46 |
% |
|
(1) |
|
Average balances include loans accounted for on a nonaccrual basis
and accruing loans 90 days or more past due. Amortization of
net deferred loan fees/costs is included with interest on
loans. |
|
(2) |
|
Average other non-interest-bearing liabilities include fair value
adjustments related to junior subordinated debentures. |
|
(3) |
|
Tax-exempt income is calculated on a tax equivalent basis.
The tax equivalent yield adjustment to interest earned on loans was
$1.8 million, $1.7 million and $1.4 million for the quarters ended
June 30, 2023, March 31, 2023 and June 30, 2022,
respectively. The tax equivalent yield adjustment to interest
earned on tax exempt securities was $1.1 million for the quarter
ended June 30, 2023 and $1.2 million for both the quarters
ended March 31, 2023 and June 30, 2022. |
|
(4) |
|
Non-interest expense divided by the total of net interest income
and non-interest income. |
|
(5) |
|
Adjusted non-interest expense divided by adjusted revenue.
Represent non-GAAP financial measures. See, “Additional
Financial Information - Non-GAAP Financial Measures” on the final
two pages of this press release for a discussion and reconciliation
of non-GAAP financial measures. |
| |
|
|
| |
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| (rates / ratios
annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
| ANALYSIS OF NET
INTEREST SPREAD |
|
Six Months Ended |
| |
|
Jun 30, 2023 |
|
Jun 30, 2022 |
| |
|
Average Balance |
|
Interest and Dividends |
|
Yield/Cost(3) |
|
Average Balance |
|
Interest and Dividends |
|
Yield/Cost(3) |
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for sale loans |
|
$ |
54,375 |
|
$ |
1,409 |
|
|
5.23 |
% |
|
$ |
103,508 |
|
$ |
1,770 |
|
|
3.45 |
% |
|
Mortgage loans |
|
|
8,340,792 |
|
|
218,997 |
|
|
5.29 |
% |
|
|
7,453,483 |
|
|
166,440 |
|
|
4.50 |
% |
|
Commercial/agricultural loans |
|
|
1,733,075 |
|
|
52,792 |
|
|
6.14 |
% |
|
|
1,526,345 |
|
|
32,164 |
|
|
4.25 |
% |
|
SBA PPP loans |
|
|
6,016 |
|
|
117 |
|
|
3.92 |
% |
|
|
67,111 |
|
|
3,840 |
|
|
11.54 |
% |
|
Consumer and other loans |
|
|
138,004 |
|
|
4,252 |
|
|
6.21 |
% |
|
|
116,525 |
|
|
3,383 |
|
|
5.85 |
% |
|
Total loans(1) |
|
|
10,272,262 |
|
|
277,567 |
|
|
5.45 |
% |
|
|
9,266,972 |
|
|
207,597 |
|
|
4.52 |
% |
|
Mortgage-backed securities |
|
|
3,025,907 |
|
|
37,552 |
|
|
2.50 |
% |
|
|
3,073,630 |
|
|
31,200 |
|
|
2.05 |
% |
|
Other securities |
|
|
1,294,743 |
|
|
28,027 |
|
|
4.37 |
% |
|
|
1,600,164 |
|
|
18,755 |
|
|
2.36 |
% |
|
Equity securities |
|
|
— |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
|
|
— |
% |
|
Interest-bearing deposits with banks |
|
|
49,229 |
|
|
1,165 |
|
|
4.77 |
% |
|
|
1,435,629 |
|
|
3,101 |
|
|
0.44 |
% |
|
FHLB stock |
|
|
19,955 |
|
|
247 |
|
|
2.50 |
% |
|
|
10,873 |
|
|
206 |
|
|
3.82 |
% |
|
Total investment securities |
|
|
4,389,834 |
|
|
66,991 |
|
|
3.08 |
% |
|
|
6,120,296 |
|
|
53,262 |
|
|
1.75 |
% |
|
Total interest-earning assets |
|
|
14,662,096 |
|
|
344,558 |
|
|
4.74 |
% |
|
|
15,387,268 |
|
|
260,859 |
|
|
3.42 |
% |
| Non-interest-earning
assets |
|
|
930,208 |
|
|
|
|
|
|
1,327,169 |
|
|
|
|
|
Total assets |
|
$ |
15,592,304 |
|
|
|
|
|
$ |
16,714,437 |
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
|
$ |
1,825,386 |
|
|
3,237 |
|
|
0.36 |
% |
|
$ |
1,941,766 |
|
|
562 |
|
|
0.06 |
% |
|
Savings accounts |
|
|
2,575,726 |
|
|
6,779 |
|
|
0.53 |
% |
|
|
2,829,098 |
|
|
706 |
|
|
0.05 |
% |
|
Money market accounts |
|
|
2,061,767 |
|
|
9,806 |
|
|
0.96 |
% |
|
|
2,411,152 |
|
|
1,037 |
|
|
0.09 |
% |
|
Certificates of deposit |
|
|
969,607 |
|
|
9,961 |
|
|
2.07 |
% |
|
|
804,167 |
|
|
1,789 |
|
|
0.45 |
% |
|
Total interest-bearing deposits |
|
|
7,432,486 |
|
|
29,783 |
|
|
0.81 |
% |
|
|
7,986,183 |
|
|
4,094 |
|
|
0.10 |
% |
|
Non-interest-bearing deposits |
|
|
5,701,953 |
|
|
— |
|
|
— |
% |
|
|
6,438,885 |
|
|
— |
|
|
— |
% |
|
Total deposits |
|
|
13,134,439 |
|
|
29,783 |
|
|
0.46 |
% |
|
|
14,425,068 |
|
|
4,094 |
|
|
0.06 |
% |
| Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
|
249,131 |
|
|
6,421 |
|
|
5.20 |
% |
|
|
20,994 |
|
|
291 |
|
|
2.80 |
% |
|
Other borrowings |
|
|
208,645 |
|
|
1,152 |
|
|
1.11 |
% |
|
|
259,078 |
|
|
164 |
|
|
0.13 |
% |
|
Junior subordinated debentures and subordinated notes |
|
|
188,142 |
|
|
5,584 |
|
|
5.99 |
% |
|
|
190,573 |
|
|
3,678 |
|
|
3.89 |
% |
|
Total borrowings |
|
|
645,918 |
|
|
13,157 |
|
|
4.11 |
% |
|
|
470,645 |
|
|
4,133 |
|
|
1.77 |
% |
|
Total funding liabilities |
|
|
13,780,357 |
|
|
42,940 |
|
|
0.63 |
% |
|
|
14,895,713 |
|
|
8,227 |
|
|
0.11 |
% |
| Other non-interest-bearing
liabilities(2) |
|
|
286,084 |
|
|
|
|
|
|
232,853 |
|
|
|
|
|
Total liabilities |
|
|
14,066,441 |
|
|
|
|
|
|
15,128,566 |
|
|
|
|
| Shareholders’ equity |
|
|
1,525,863 |
|
|
|
|
|
|
1,585,871 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
15,592,304 |
|
|
|
|
|
$ |
16,714,437 |
|
|
|
|
| Net interest income/rate
spread (tax equivalent) |
|
|
|
$ |
301,618 |
|
|
4.11 |
% |
|
|
|
$ |
252,632 |
|
|
3.31 |
% |
| Net interest margin (tax
equivalent) |
|
|
|
|
|
4.15 |
% |
|
|
|
|
|
3.31 |
% |
| Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjustments for taxable
equivalent basis |
|
|
|
|
(5,788 |
) |
|
|
|
|
|
|
(4,967 |
) |
|
|
| Net interest income and
margin, as reported |
|
|
|
$ |
295,830 |
|
|
4.07 |
% |
|
|
|
$ |
247,665 |
|
|
3.25 |
% |
| Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
|
|
|
1.23 |
% |
|
|
|
|
|
1.11 |
% |
| Return on average equity |
|
|
|
|
|
12.57 |
% |
|
|
|
|
|
11.69 |
% |
| Average equity/average
assets |
|
|
|
|
|
9.79 |
% |
|
|
|
|
|
9.49 |
% |
| Average interest-earning
assets/average interest-bearing liabilities |
|
|
|
|
|
181.50 |
% |
|
|
|
|
|
181.95 |
% |
| Average interest-earning
assets/average funding liabilities |
|
|
|
|
|
106.40 |
% |
|
|
|
|
|
103.30 |
% |
| Non-interest income/average
assets |
|
|
|
|
|
0.23 |
% |
|
|
|
|
|
0.56 |
% |
| Non-interest expense/average
assets |
|
|
|
|
|
2.46 |
% |
|
|
|
|
|
2.21 |
% |
| Efficiency ratio(4) |
|
|
|
|
|
60.61 |
% |
|
|
|
|
|
62.27 |
% |
| Adjusted efficiency
ratio(5) |
|
|
|
|
|
56.33 |
% |
|
|
|
|
|
60.72 |
% |
|
(1) |
|
Average balances include loans accounted for on a nonaccrual basis
and loans 90 days or more past due. Amortization of net deferred
loan fees/costs is included with interest on loans. |
|
(2) |
|
Average other non-interest-bearing liabilities include fair value
adjustments related to junior subordinated debentures. |
|
(3) |
|
Tax-exempt income is calculated on a tax equivalent basis. The tax
equivalent yield adjustment to interest earned on loans was $3.5
million and $2.7 million for the years ended June 30, 2023 and
June 30, 2022, respectively. The tax equivalent yield
adjustment to interest earned on tax exempt securities was $2.3
million and $2.2 million for the years ended June 30, 2023 and
June 30, 2022, respectively. |
|
(4) |
|
Non-interest expense divided by the total of net interest income
and non-interest income. |
|
(5) |
|
Adjusted non-interest expense divided by adjusted revenue. These
represent non-GAAP financial measures. See the discussion and
reconciliation of Non-GAAP Financial Measures beginning on page
16. |
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| * Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
|
In addition to results presented in accordance with generally
accepted accounting principles in the United States of America
(GAAP), this press release contains certain non-GAAP financial
measures. Tangible common shareholders’ equity per share and the
ratio of tangible common equity to tangible assets (both of which
exclude goodwill and other intangible assets, net), and references
to adjusted revenue (which excludes fair value adjustments and net
gain (loss) on the sale of securities from the total of net
interest income and total non-interest income) and the adjusted
efficiency ratio (which excludes Banner Forward expenses,
amortization of core deposit intangibles, real estate owned
operations, loss on extinguishment of debt and state/municipal
taxes from non-interest expense divided by adjusted revenue)
represent non-GAAP financial measures. Management has presented
these non-GAAP financial measures in this earnings release because
it believes that they provide useful and comparative information to
assess trends in Banner’s core operations reflected in the current
quarter’s results and facilitate the comparison of our performance
with the performance of our peers. However, these non-GAAP
financial measures are supplemental and are not a substitute for
any analysis based on GAAP. Where applicable, comparable earnings
information using GAAP financial measures is also presented.
Because not all companies use the same calculations, our
presentation may not be comparable to other similarly titled
measures as calculated by other companies. For a reconciliation of
these non-GAAP financial measures, see the tables below: |
| |
|
|
|
|
|
|
|
|
|
| ADJUSTED
REVENUE |
Quarters Ended |
|
Six Months Ended |
| |
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
|
Jun 30, 2023 |
|
Jun 30, 2022 |
|
Net interest income (GAAP) |
$ |
142,518 |
|
$ |
153,312 |
|
$ |
129,011 |
|
|
$ |
295,830 |
|
$ |
247,665 |
|
| Non-interest income
(GAAP) |
|
8,422 |
|
|
9,277 |
|
|
27,173 |
|
|
|
17,699 |
|
|
46,600 |
|
| Total revenue (GAAP) |
|
150,940 |
|
|
162,589 |
|
|
156,184 |
|
|
|
313,529 |
|
|
294,265 |
|
|
Exclude: Net loss (gain) on sale of securities |
|
4,527 |
|
|
7,252 |
|
|
(32 |
) |
|
|
11,779 |
|
|
(467 |
) |
|
Net change in valuation of financial instruments carried at fair
value |
|
3,151 |
|
|
552 |
|
|
(69 |
) |
|
|
3,703 |
|
|
(118 |
) |
|
Gain on sale of branches |
|
— |
|
|
— |
|
|
(7,804 |
) |
|
|
— |
|
|
(7,804 |
) |
| Adjusted revenue
(non-GAAP) |
$ |
158,618 |
|
$ |
170,393 |
|
$ |
148,279 |
|
|
$ |
329,011 |
|
$ |
285,876 |
|
| |
| ADJUSTED
EARNINGS |
Quarters Ended |
|
Six Months Ended |
| |
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
|
Jun 30, 2023 |
|
Jun 30, 2022 |
|
Net income (GAAP) |
$ |
39,591 |
|
|
$ |
55,555 |
|
|
$ |
47,965 |
|
|
$ |
95,146 |
|
|
$ |
91,928 |
|
|
Exclude: Net loss (gain) on sale of securities |
|
4,527 |
|
|
|
7,252 |
|
|
|
(32 |
) |
|
|
11,779 |
|
|
|
(467 |
) |
|
Net change in valuation of financial instruments carried at fair
value |
|
3,151 |
|
|
|
552 |
|
|
|
(69 |
) |
|
|
3,703 |
|
|
|
(118 |
) |
|
Gain on sale of branches |
|
— |
|
|
|
— |
|
|
|
(7,804 |
) |
|
|
— |
|
|
|
(7,804 |
) |
|
Banner Forward expenses |
|
195 |
|
|
|
143 |
|
|
|
1,579 |
|
|
|
338 |
|
|
|
4,044 |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
793 |
|
|
Related net tax benefit |
|
(1,890 |
) |
|
|
(1,907 |
) |
|
|
1,518 |
|
|
|
(3,797 |
) |
|
|
852 |
|
| Total adjusted earnings
(non-GAAP) |
$ |
45,574 |
|
|
$ |
61,595 |
|
|
$ |
43,157 |
|
|
$ |
107,169 |
|
|
$ |
89,228 |
|
| |
|
|
|
|
|
|
|
|
|
| Diluted earnings per share
(GAAP) |
$ |
1.15 |
|
|
$ |
1.61 |
|
|
$ |
1.39 |
|
|
$ |
2.76 |
|
|
$ |
2.66 |
|
| Diluted adjusted earnings per
share (non-GAAP) |
$ |
1.32 |
|
|
$ |
1.79 |
|
|
$ |
1.25 |
|
|
$ |
3.11 |
|
|
$ |
2.58 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
| ADJUSTED EFFICIENCY
RATIO |
|
Quarters Ended |
|
Years Ended |
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Jun 30, 2022 |
|
Jun 30, 2023 |
|
Jun 30, 2022 |
|
Non-interest expense (GAAP) |
|
$ |
95,405 |
|
|
$ |
94,621 |
|
|
$ |
92,053 |
|
|
$ |
190,026 |
|
|
$ |
183,248 |
|
|
Exclude: Banner Forward expenses |
|
|
(195 |
) |
|
|
(143 |
) |
|
|
(1,579 |
) |
|
|
(338 |
) |
|
|
(4,044 |
) |
|
CDI amortization |
|
|
(991 |
) |
|
|
(1,050 |
) |
|
|
(1,425 |
) |
|
|
(2,041 |
) |
|
|
(2,849 |
) |
|
State/municipal tax expense |
|
|
(1,229 |
) |
|
|
(1,300 |
) |
|
|
(1,004 |
) |
|
|
(2,529 |
) |
|
|
(2,166 |
) |
|
REO operations |
|
|
(75 |
) |
|
|
277 |
|
|
|
121 |
|
|
|
202 |
|
|
|
200 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(793 |
) |
| Adjusted non-interest expense
(non-GAAP) |
|
$ |
92,915 |
|
|
$ |
92,405 |
|
|
$ |
88,166 |
|
|
$ |
185,320 |
|
|
$ |
173,596 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net interest income
(GAAP) |
|
$ |
142,518 |
|
|
$ |
153,312 |
|
|
$ |
129,011 |
|
|
$ |
295,830 |
|
|
$ |
247,665 |
|
| Non-interest income
(GAAP) |
|
|
8,422 |
|
|
|
9,277 |
|
|
|
27,173 |
|
|
|
17,699 |
|
|
|
46,600 |
|
| Total revenue (GAAP) |
|
|
150,940 |
|
|
|
162,589 |
|
|
|
156,184 |
|
|
|
313,529 |
|
|
|
294,265 |
|
|
Exclude: Net loss (gain) on sale of securities |
|
|
4,527 |
|
|
|
7,252 |
|
|
|
(32 |
) |
|
|
11,779 |
|
|
|
(467 |
) |
|
Net change in valuation of financial instruments carried at fair
value |
|
|
3,151 |
|
|
|
552 |
|
|
|
(69 |
) |
|
|
3,703 |
|
|
|
(118 |
) |
|
Gain on sale of branches |
|
|
— |
|
|
|
— |
|
|
|
(7,804 |
) |
|
|
— |
|
|
|
(7,804 |
) |
| Adjusted revenue
(non-GAAP) |
|
$ |
158,618 |
|
|
$ |
170,393 |
|
|
$ |
148,279 |
|
|
$ |
329,011 |
|
|
$ |
285,876 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio (GAAP) |
|
|
63.21 |
% |
|
|
58.20 |
% |
|
|
58.94 |
% |
|
|
60.61 |
% |
|
|
62.27 |
% |
| Adjusted efficiency ratio
(non-GAAP) |
|
|
58.58 |
% |
|
|
54.23 |
% |
|
|
59.46 |
% |
|
|
56.33 |
% |
|
|
60.72 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TANGIBLE COMMON
SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS |
|
|
|
|
|
|
|
|
| |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
|
Shareholders’ equity (GAAP) |
|
$ |
1,542,513 |
|
|
$ |
1,531,695 |
|
|
$ |
1,456,432 |
|
|
$ |
1,485,830 |
|
|
Exclude goodwill and other intangible assets, net |
|
|
380,520 |
|
|
|
381,511 |
|
|
|
382,561 |
|
|
|
384,991 |
|
| Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,161,993 |
|
|
$ |
1,150,184 |
|
|
$ |
1,073,871 |
|
|
$ |
1,100,839 |
|
| |
|
|
|
|
|
|
|
|
| Total assets (GAAP) |
|
$ |
15,584,736 |
|
|
$ |
15,533,603 |
|
|
$ |
15,833,431 |
|
|
$ |
16,385,197 |
|
|
Exclude goodwill and other intangible assets, net |
|
|
380,520 |
|
|
|
381,511 |
|
|
|
382,561 |
|
|
|
384,991 |
|
| Total tangible assets
(non-GAAP) |
|
$ |
15,204,216 |
|
|
$ |
15,152,092 |
|
|
$ |
15,450,870 |
|
|
$ |
16,000,206 |
|
| Common shareholders’ equity to
total assets (GAAP) |
|
|
9.90 |
% |
|
|
9.86 |
% |
|
|
9.20 |
% |
|
|
9.07 |
% |
| Tangible common shareholders’
equity to tangible assets (non-GAAP) |
|
|
7.64 |
% |
|
|
7.59 |
% |
|
|
6.95 |
% |
|
|
6.88 |
% |
| |
|
|
|
|
|
|
|
|
| TANGIBLE COMMON
SHAREHOLDERS’ EQUITY PER SHARE |
|
|
|
|
|
|
|
|
| Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,161,993 |
|
|
$ |
1,150,184 |
|
|
$ |
1,073,871 |
|
|
$ |
1,100,839 |
|
| Common shares outstanding at
end of period |
|
|
34,344,627 |
|
|
|
34,308,540 |
|
|
|
34,194,018 |
|
|
|
34,191,330 |
|
| Common shareholders’ equity
(book value) per share (GAAP) |
|
$ |
44.91 |
|
|
$ |
44.64 |
|
|
$ |
42.59 |
|
|
$ |
43.46 |
|
| Tangible common shareholders’
equity (tangible book value) per share (non-GAAP) |
|
$ |
33.83 |
|
|
$ |
33.52 |
|
|
$ |
31.41 |
|
|
$ |
32.20 |
|
| |
|
|
| CONTACT: |
|
MARK J. GRESCOVICH, |
| |
|
PRESIDENT & CEO |
| |
|
PETER J. CONNER, CFO |
| |
|
(509) 527-3636 |
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