Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent
company of Banner Bank, today reported net income of $45.9 million,
or $1.33 per diluted share, for the third quarter of 2023, a 16%
increase compared to $39.6 million, or $1.15 per diluted share, for
the preceding quarter and a 7% decrease compared to $49.1 million,
or $1.43 per diluted share, for the third quarter of 2022.
Net interest income was $141.8 million in the third quarter of
2023, compared to $142.5 million in the preceding quarter and
$146.4 million in the third quarter a year ago. The decrease
in net interest income compared to the preceding and prior year
quarters reflects an increase in funding costs, partially offset by
an increase in yields on earning assets. Banner’s third
quarter 2023 results include a $2.0 million provision for credit
losses, compared to a $6.8 million provision for credit losses in
the preceding quarter and a $6.1 million provision for credit
losses in the third quarter of 2022. Net income was $141.0
million, or $4.09 per diluted share, for both the nine months ended
September 30, 2023 and 2022. Banner’s results for the
first nine months of 2023 include an $8.3 million provision for
credit losses, compared to a $3.7 million provision for credit
losses the same period 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 November 13, 2023, to
common shareholders of record on November 3, 2023.
“Our super community bank business model, which
emphasizes a moderate risk profile and strong relationship banking,
continues to serve us well and we are well positioned to manage the
uncertainties of these economic times,” said Mark Grescovich,
President and CEO. “Our performance for the third 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 resulted in moderate
compression in our net interest margin during the quarter.
Due to solid loan growth, we continue to build reserves while
maintaining very strong credit quality metrics. Our continued
focus on growing client relationships is serving us well, with core
deposits representing 89% of total deposits at quarter end.
Banner’s overarching goals continue to be to do the right thing for
our clients, communities, colleagues, 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 September 30, 2023, Banner, on a
consolidated basis, had $15.51 billion in assets, $10.46 billion in
net loans and $13.17 billion in deposits. Banner operates 135
full service branch offices, including branches located in eight of
the top 20 largest western Metropolitan Statistical Areas by
population.
Third Quarter 2023
Highlights
- Revenues increased 2% to $154.4 million, compared to $150.9
million in the preceding quarter, and decreased 5% compared to
$162.0 million in the third 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 $157.7 million in the third quarter of 2023,
compared to $158.6 million in the preceding quarter and $161.5
million in the third quarter a year ago.
- Net interest income decreased 1% to $141.8 million in the third
quarter of 2023, compared to $142.5 million in the preceding
quarter and decreased 3% compared to $146.4 million in the third
quarter a year ago.
- Net interest margin, on a tax equivalent basis, was 3.93%,
compared to 4.00% in the preceding quarter and 3.85% in the third
quarter a year ago.
- Mortgage banking operations revenue increased to $2.0 million,
compared to $1.7 million in the preceding quarter, and compared to
$105,000 in the third quarter a year ago.
- Return on average assets was 1.17%, compared to 1.02% in the
preceding quarter and 1.18% in the third quarter a year ago.
- Net loans receivable increased 1% to $10.46 billion at
September 30, 2023, compared to $10.33 billion at June 30,
2023, and increased 8% compared to $9.69 billion at
September 30, 2022.
- Non-performing assets decreased to $26.8 million, or 0.17% of
total assets, at September 30, 2023, compared to $28.7
million, or 0.18% of total assets at June 30, 2023, and increased
compared to $15.6 million, or 0.10% of total assets, at
September 30, 2022.
- The allowance for credit losses - loans was $147.0 million, or
1.38% of total loans receivable, as of September 30, 2023,
compared to $144.7 million, or 1.38% of total loans receivable as
of June 30, 2023 and $135.9 million, or 1.38% of total loans
receivable as of September 30, 2022.
- Total deposits increased to $13.17 billion at
September 30, 2023, compared to $13.10 billion at June 30,
2023, and decreased compared to $14.23 billion at
September 30, 2022.
- Core deposits (non-interest-bearing and interest-bearing
transaction and savings accounts) decreased to $11.72 billion at
September 30, 2023, compared to $11.74 billion at June 30,
2023 and $13.51 billion at September 30, 2022. Core
deposits represented 89% of total deposits at September 30,
2023.
- Banner Bank’s estimated uninsured deposits were approximately
31% of total deposits at both September 30, 2023 and June 30,
2023.
- Banner Bank’s estimated uninsured deposits, excluding
collateralized public deposits and affiliate deposits, were
approximately 28% of total deposits at both September 30, 2023
and June 30, 2023.
- Available borrowing capacity was $4.62 billion at
September 30, 2023, compared to $4.02 billion at June 30,
2023.
- On-balance sheet liquidity was $2.86 billion at
September 30, 2023, compared to $3.07 billion at June 30,
2023.
- Dividends paid to shareholders were $0.48 per share in the
quarter ended September 30, 2023.
- Common shareholders’ equity per share decreased 1% to $44.27 at
September 30, 2023, compared to $44.91 at the preceding
quarter end, and increased 7% from $41.20 at September 30,
2022.
- Tangible common shareholders’ equity per share* decreased 2% to
$33.22 at September 30, 2023, compared to $33.83 at the
preceding quarter end, and increased 11% from $29.97 at
September 30, 2022.
*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 $141.8 million in the
third quarter of 2023, compared to $142.5 million in the preceding
quarter and $146.4 million in the third quarter a year ago.
Net interest margin on a tax equivalent basis was 3.93% for the
third quarter of 2023, a seven basis-point decrease compared to
4.00% in the preceding quarter and an eight basis-point increase
compared to 3.85% in the third 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
retail CDs and the lag effect of prior market rate increases on
current period deposit costs, partially offset by a decrease in
FHLB advances and increased yields on loans due to the rising
interest rates during the quarter.
Average yields on interest-earning assets
increased 14 basis points to 4.94% for the third quarter of 2023,
compared to 4.80% for the preceding quarter and increased 97 basis
points compared to 3.97% in the third quarter a year ago.
Since March 2022, in response to inflation, the Federal Open Market
Committee of the Federal Reserve System has increased the target
range for the federal funds rate by 525 basis points, including 25
basis points during the third quarter of 2023, to a range of 5.25%
to 5.50%. 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 14 basis points to 5.65% compared to 5.51% in the
preceding quarter and increased 83 basis points compared to 4.82%
in the third 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 and the lag effect of some adjustable-rate loans repricing
for the first time since the start of the rising rate
environment. Total deposit costs were 0.94% in the third
quarter of 2023, which was a 30 basis-point increase compared to
the preceding quarter and an 87 basis-point increase compared to
the third quarter a year ago. The increase in the costs of
deposits was due to an increase in the mix of higher cost retail
CDs as well as a larger percentage of core deposits being in
interest bearing accounts. The average rate paid on FHLB
advances was 5.50% in the third quarter of 2023, which was a 21
basis-point increase compared to 5.29% in the preceding
quarter. There were no FHLB advances during the third quarter
a year ago. The average rate paid on other borrowings in the
third quarter of 2023 was 2.24%, which was a 60 basis-point
increase compared to 1.64% in the preceding quarter and a 211
basis-point increase compared to 0.13% in the third quarter a year
ago. The total cost of funding liabilities was 1.08% during
the third quarter of 2023, a 22 basis-point increase compared to
0.86% in the preceding quarter and a 95 basis-point increase
compared to 0.13% in the third quarter a year ago.
A $2.0 million provision for credit losses was
recorded in the current quarter (comprised of a $2.9 million
provision for credit losses - loans, a $346,000 provision for
credit losses - unfunded loan commitments, a $1.3 million recapture
of provision for credit losses - available for sale securities and
a $12,000 recapture of provision for credit losses -
held-to-maturity debt securities). This compares to a $6.8
million provision for credit losses in the prior 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) and a $6.1 million provision for
credit losses in the third quarter a year ago (comprised of a $6.3
million provision for credit losses - loans, a $205,000 recapture
of provision for credit losses - unfunded loan commitments and a
$55,000 recapture of 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, partially offset by an increase in the
trading price on bank subordinated debt investments. The
provision for credit losses for the preceding quarter primarily
reflected increased loan balances and unfunded loan commitments, a
deterioration in forecasted economic conditions and rating
downgrades on bank subordinated debt investments.
Total non-interest income was $12.7 million in
the third quarter of 2023, compared to $8.4 million in the
preceding quarter and $15.6 million in the third quarter a year
ago. The increase in non-interest income during the current
quarter compared to the preceding quarter was primarily due to a
$1.9 million reduction in the net loss recognized on the sale of
securities as well as a $2.5 million reduction in the net loss for
fair value adjustments on financial instruments carried at fair
value during the current quarter. The decrease in
non-interest income during the current quarter compared to the
prior year quarter was primarily due to a $2.7 million net loss
recognized on the sale of securities during the current quarter and
a $654,000 net loss for fair value adjustments on financial
instruments carried at fair value in the current quarter, partially
offset by a $1.9 million increase in mortgage banking operations
revenues. Total non-interest income was $30.4 million for the
nine months ended September 30, 2023, compared to $62.2
million for the same period a year earlier.
Mortgage banking operations revenue, including
gains on one- to four-family and multifamily loan sales and loan
servicing fees, was $2.0 million in the third quarter of 2023,
compared to $1.7 million in the preceding quarter and $105,000 in
the third quarter a year ago. The increase from the preceding
quarter and from the third quarter of 2022 primarily reflects a
reduction in the lower of cost or market adjustment on multifamily
held for sale loans recognized during the current period compared
to the prior periods. In addition, the volume of one- to
four-family loans sold during the current quarter increased
compared to the prior year quarter; however, volumes remain low
primarily due to reduced refinancing activity, as well as decreased
purchase activity as interest rates increased. The increase
in volume of one- to four-family loans sold during the current
quarter compared to the prior year quarter was partially offset by
a decrease in the gain on sale margin of one- to four-family loans
sold. Home purchase activity accounted for 90% of one- to
four-family mortgage loan originations in the third quarter of
2023, compared to 93% in the preceding quarter and 88% in the third
quarter of 2022. For the third and second quarters of 2023,
respectively, mortgage banking operations revenue included a
$456,000 and $757,000 lower of cost or market downward adjustment
on multifamily held for sale loans due to increases in market
interest rates during those quarters. There were no
multifamily loans sold during the third and second quarters of
2023. During the third quarter of 2022, a $2.2 million lower
of cost or market downward adjustment was recorded due to increases
in market rates. There were $10.5 million of multifamily
loans sold at a gain of $58,000 during the third quarter of
2022.
Third quarter 2023 non-interest income also
included a $654,000 net loss for fair value adjustments as a result
of changes in the valuation of financial instruments carried at
fair value, principally comprised of certain investment securities
held for trading and limited partnership investments, and a $2.7
million net loss on the sale of securities. In the preceding
quarter, results included a $3.2 million net loss for fair value
adjustments and a $4.5 million net loss on the sale of
securities. In the third quarter a year ago, the results
included a $532,000 net gain for fair value adjustments and a
$6,000 net gain on the sale of securities.
Total revenue increased 2% to $154.4 million for
the third quarter of 2023, compared to $150.9 million in the
preceding quarter, and decreased 5% compared to $162.0 million in
the third 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 $157.7 million in the third
quarter of 2023, compared to $158.6 million in the preceding
quarter and $161.5 million in the third quarter a year ago.
Total revenue was $468.0 million for the nine months ended
September 30, 2023, compared to $456.3 million for the same
period a year earlier. In the first nine months of the year,
adjusted revenue* was $486.7 million, compared to $447.4 million in
the first nine months of 2022.
Total non-interest expense was $95.9 million in
the third quarter of 2023, compared to $95.4 million in the
preceding quarter and $95.0 million in the third quarter of
2022. The increase in non-interest expense for the current
quarter compared to the prior quarter primarily reflects a $503,000
increase in payment and card processing services expense, a
$642,000 increase in professional and legal expenses and a $504,000
increase in miscellaneous expense, partially offset by an $881,000
decrease in salary and employee benefits expense. The
increase in non-interest expense for the current quarter compared
to the same quarter a year ago primarily reflects a decrease in
capitalized loan origination costs and an increase in deposit
insurance expense, partially offset by decreases in salary and
employee benefits expense and miscellaneous expense. The
current quarter included $996,000 of Banner forward expenses
related to the consolidation of two branch locations, as well as
expenses related to the discontinuation of the Multifamily
Originated for Sale business line due to the continued lack of an
active secondary market for originated loans. Year-to-date,
total non-interest expense was $285.9 million, compared to $278.3
million in the same period a year earlier. Banner’s
efficiency ratio was 62.10% for the third quarter, compared to
63.21% in the preceding quarter and 58.65% in the same quarter a
year ago. Banner’s adjusted efficiency ratio* was 59.00% for
the third quarter, compared to 58.58% in the preceding quarter and
57.04% in the year ago quarter.
Federal and state income tax expense totaled
$10.7 million for the third quarter of 2023 resulting in an
effective tax rate of 18.9%, reflecting the benefits from tax
exempt income. Banner’s statutory income tax rate for the
quarter ended September 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 decreased to $15.51 billion at
September 30, 2023, compared to $15.58 billion at June 30,
2023, and decreased 5% from $16.36 billion at September 30,
2022. The total of securities and interest-bearing deposits
held at other banks totaled $3.44 billion at September 30,
2023, compared to $3.64 billion at June 30, 2023 and $5.01 billion
at September 30, 2022. The decrease compared to the
prior quarter was primarily due to the sale of securities and a
decrease in the fair value of securities - available for
sale. The decrease compared to the prior year quarter was
primarily due to reverse repurchase agreements maturing during the
first six months of 2023, the sale of securities and a reduction in
interest bearing cash balances. The average effective
duration of the securities portfolio was approximately 6.8 years at
September 30, 2023, compared to 6.4 years at
September 30, 2022.
Total loans receivable increased to $10.61
billion at September 30, 2023, compared to $10.47 billion at
June 30, 2023, and $9.83 billion at September 30, 2022.
One- to four-family residential loans increased 7% to $1.44 billion
at September 30, 2023, compared to $1.34 billion at June 30,
2023, and increased 40% compared to $1.03 billion at
September 30, 2022. The increase in one- to four-family
residential loans was primarily the result of one- to four-family
construction loans converting to one- to four-family portfolio
loans upon the completion of the construction phase and new
production. Multifamily real estate loans increased 10% to
$766.6 million at September 30, 2023, compared to $699.8
million at June 30, 2023, and increased 29% compared to $592.8
million at September 30, 2022. The increase in
multifamily loans compared to the prior quarter was primarily the
result of multifamily affordable housing construction loans
converting to multifamily portfolio loans upon the completion of
the construction phase. The increase in multifamily loans
compared to a year ago also reflects 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. Commercial business loans decreased to $2.26 billion at
September 30, 2023, compared to $2.30 billion at June 30,
2023, primarily due to paydowns and payoffs exceeding new loan
production, and increased 5% compared to $2.15 billion a year ago,
primarily due to new loan production. Agricultural business
loans increased 8% to $334.6 million at September 30, 2023,
compared to $310.1 million at June 30, 2023, and increased 12%
compared to $299.4 million at September 30, 2022, primarily
due to new loan production and advances on agricultural lines of
credit.
Loans held for sale were $54.2 million at
September 30, 2023, compared to $60.6 million at June 30,
2023, and $84.4 million at September 30, 2022. One- to
four- family residential mortgage loans sold totaled
$87.3 million in the current quarter, compared to
$62.6 million in the preceding quarter and $49.7 million
in the third quarter a year ago. There were no multifamily
loans sold during the third quarter of 2023 or the preceding
quarter and $10.5 million sold in the third quarter a year
ago.
Total deposits increased to $13.17 billion at
September 30, 2023, compared to $13.10 billion at June 30,
2023, primarily due to increases in interest-bearing deposit
accounts and normal seasonal increases following outflows for tax
payments during the second quarter of 2023, and decreased compared
to $14.23 billion a year ago. The decline in deposits from
the third quarter a year ago was primarily due to interest rate
sensitive clients shifting a portion of their non-operating deposit
balances to higher yielding investments. Non-interest-bearing
account balances decreased 3% to $5.20 billion at
September 30, 2023, compared to $5.37 billion at June 30,
2023, and 20% compared to $6.51 billion at September 30,
2022. Core deposits were 89% of total deposits at
September 30, 2023, 90% of total deposits at June 30, 2023 and
95% of total deposits at September 30, 2022.
Certificates of deposit increased 7% to $1.46 billion at
September 30, 2023, compared to $1.36 billion at June 30,
2023, and increased 102% compared to $721.9 million a year
earlier. The increase in certificates of deposit during the
current quarter compared to the preceding quarter and third quarter
a year ago was principally due to clients seeking higher yields
moving funds from core deposit accounts to higher yielding
certificates of deposit. The increase in certificates of
deposit from the third quarter a year ago was also due to a $162.9
million increase in brokered deposits.
Banner Bank’s estimated uninsured deposits were
$4.07 billion or 31% of total deposits at September 30, 2023,
compared to $4.06 billion or 31% of total deposits at June 30,
2023. The uninsured deposit calculation includes $300.2
million and $309.7 million of collateralized public deposits at
September 30, 2023 and June 30, 2023, respectively.
Uninsured deposits also include cash held by the holding company of
$97.8 million and $95.0 million at September 30, 2023 and June
30, 2023, respectively. Banner Bank’s estimated uninsured
deposits, excluding collateralized public deposits and cash held at
the holding company, were 28% of deposits at both
September 30, 2023 and June 30, 2023.
Banner had $140.0 million of FHLB borrowings at
September 30, 2023, compared to $270.0 million at June
30, 2023 and none a year ago. At September 30, 2023,
Banner’s off-balance sheet liquidity included additional borrowing
capacity of $2.98 billion at the FHLB and $1.52 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
$92.7 million at September 30, 2023 compared to
$92.6 million at June 30, 2023 and $98.8 million at
September 30, 2022. 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 September 30, 2023, total common
shareholders’ equity was $1.52 billion, or 9.81% of assets,
compared to $1.54 billion or 9.90% of assets at June 30, 2023, and
$1.41 billion or 8.61% of assets at September 30, 2022.
The decrease in total common shareholders’ equity at
September 30, 2023 compared to June 30, 2023 was primarily due
to a $53.5 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 the
third quarter of 2023, partially offset by a $29.2 million increase
in retained earnings as a result of $45.9 million in net income,
offset by the accrual of $16.7 million of cash dividends
during the third quarter of 2023. The increase in total
common shareholders’ equity from September 30, 2022 reflects a
$130.1 million increase in retained earnings, partially offset by
an $23.7 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. At September 30, 2023, tangible common
shareholders’ equity*, which excludes goodwill and other intangible
assets, net, was $1.14 billion, or 7.54% of tangible assets*,
compared to $1.16 billion, or 7.64% of tangible assets, at June 30,
2023, and $1.02 billion, or 6.41% of tangible assets, a year
ago.
*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.
Banner and Banner Bank continue to maintain
capital levels in excess of the requirements to be categorized as
“well-capitalized.” At September 30, 2023, Banner’s
estimated common equity Tier 1 capital ratio was 11.75%, its
estimated Tier 1 leverage capital to average assets ratio was
10.40%, and its estimated total capital to risk-weighted assets
ratio was 14.34%. These regulatory capital ratios are estimates,
pending completion and filing of Banner’s regulatory reports.
Credit Quality
The allowance for credit losses - loans was
$147.0 million, or 1.38% of total loans receivable and 560% of
non-performing loans, at September 30, 2023, compared to
$144.7 million, or 1.38% of total loans receivable and 513% of
non-performing loans, at June 30, 2023, and $135.9 million, or
1.38% of total loans receivable and 895% of non-performing loans,
at September 30, 2022. In addition to the allowance for
credit losses - loans, Banner maintains an allowance for credit
losses - unfunded loan commitments, which was $15.0 million at
September 30, 2023, compared to $14.7 million at June 30,
2023, and $14.0 million at September 30, 2022. Net loan
charge-offs totaled $663,000 in the third quarter of 2023, compared
to net loan charge-offs of $336,000 in the preceding quarter and
net loan recoveries of $869,000 in the third quarter a year
ago. Non-performing loans were $26.3 million at
September 30, 2023, compared to $28.2 million at June 30,
2023, and $15.2 million a year ago.
Substandard loans were $124.5 million at
September 30, 2023, compared to $145.0 million at June 30,
2023, and $136.4 million a year ago. The decreases from the
prior quarter and the comparable quarter a year ago primarily
reflect risk rating upgrades as well as the payoff and sale of
substandard loans.
Total non-performing assets were $26.8 million,
or 0.17% of total assets, at September 30, 2023, compared to
$28.7 million, or 0.18% of total assets, at June 30, 2023, and
$15.6 million, or 0.10% of total assets, a year ago.
Conference Call
Banner will host a conference call on Thursday
October 19, 2023, at 8:00 a.m. PDT, to discuss its third 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 535380 to participate in the
call. A replay will be available for one week at (866)
813-9403 using access code 970585 or at www.bannerbank.com.
About the Company
Banner Corporation is a $15.51 billion bank
holding company operating a 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, or
increased political instability due to acts of war; (2) changes in
the interest rate environment, including the recent increases in
the Federal Reserve benchmark rate and duration at which such
increased interest rate levels are maintained, which could
adversely affect our revenues and expenses, the value of assets and
obligations, and the availability and cost of capital and
liquidity; (3) the impact of continuing high inflation and the
current and future monetary policies of the Federal Reserve in
response thereto; (4) the effects of any federal government
shutdown; (5) 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; (6) 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; (7) 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; (8)
competitive pressures among depository institutions; (9) the effect
of inflation on interest rate movements and their impact on client
behavior and net interest margin; (10) the transition away from the
London Interbank Offered Rate (LIBOR) toward new interest rate
benchmarks; (11) the impact of repricing and competitors’ pricing
initiatives on loan and deposit products; (12) fluctuations in real
estate values; (13) the ability to adapt successfully to
technological changes to meet clients’ needs and developments in
the market place; (14) the ability to access cost-effective
funding; (15) 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; (16) changes in financial markets;
(17) changes in economic conditions in general and in Washington,
Idaho, Oregon and California in particular; (18) the costs, effects
and outcomes of litigation; (19) 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; (20) changes in
accounting principles, policies or guidelines; (21) future
acquisitions by Banner of other depository institutions or lines of
business; (22) future goodwill impairment due to changes in
Banner’s business or changes in market conditions; (23) the costs
associated with Banner Forward; (24) effects of critical accounting
policies and judgments, including the use of estimates in
determining fair value of certain of our assets, which estimates
may prove to be incorrect and result in significant declines in
valuation; (25) other economic, competitive, governmental,
regulatory, and technological factors affecting our operations,
pricing, products and services; and (26) 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 |
|
Nine Months Ended |
| (in thousands except shares and
per share data) |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
|
Sep 30, 2023 |
|
Sep 30, 2022 |
| INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable |
|
$ |
149,254 |
|
|
$ |
140,848 |
|
|
$ |
116,610 |
|
|
$ |
423,359 |
|
|
$ |
321,466 |
|
|
Mortgage-backed securities |
|
|
17,691 |
|
|
|
18,285 |
|
|
|
17,558 |
|
|
|
54,954 |
|
|
|
48,486 |
|
|
Securities and cash equivalents |
|
|
12,119 |
|
|
|
12,676 |
|
|
|
16,951 |
|
|
|
39,521 |
|
|
|
37,059 |
|
|
Total interest income |
|
|
179,064 |
|
|
|
171,809 |
|
|
|
151,119 |
|
|
|
517,834 |
|
|
|
407,011 |
|
| INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
31,001 |
|
|
|
20,539 |
|
|
|
2,407 |
|
|
|
60,784 |
|
|
|
6,501 |
|
|
Federal Home Loan Bank (FHLB) advances |
|
|
2,233 |
|
|
|
5,157 |
|
|
|
— |
|
|
|
8,654 |
|
|
|
291 |
|
|
Other borrowings |
|
|
1,099 |
|
|
|
771 |
|
|
|
81 |
|
|
|
2,251 |
|
|
|
245 |
|
|
Subordinated debt |
|
|
2,965 |
|
|
|
2,824 |
|
|
|
2,188 |
|
|
|
8,549 |
|
|
|
5,866 |
|
|
Total interest expense |
|
|
37,298 |
|
|
|
29,291 |
|
|
|
4,676 |
|
|
|
80,238 |
|
|
|
12,903 |
|
|
Net interest income |
|
|
141,766 |
|
|
|
142,518 |
|
|
|
146,443 |
|
|
|
437,596 |
|
|
|
394,108 |
|
| PROVISION FOR CREDIT
LOSSES |
|
|
2,027 |
|
|
|
6,764 |
|
|
|
6,087 |
|
|
|
8,267 |
|
|
|
3,660 |
|
|
Net interest income after provision for credit losses |
|
|
139,739 |
|
|
|
135,754 |
|
|
|
140,356 |
|
|
|
429,329 |
|
|
|
390,448 |
|
| NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Deposit fees and other service charges |
|
|
10,916 |
|
|
|
10,600 |
|
|
|
11,449 |
|
|
|
32,078 |
|
|
|
33,638 |
|
|
Mortgage banking operations |
|
|
2,049 |
|
|
|
1,686 |
|
|
|
105 |
|
|
|
6,426 |
|
|
|
8,523 |
|
|
Bank-owned life insurance |
|
|
2,062 |
|
|
|
2,386 |
|
|
|
1,804 |
|
|
|
6,636 |
|
|
|
5,674 |
|
|
Miscellaneous |
|
|
942 |
|
|
|
1,428 |
|
|
|
1,689 |
|
|
|
4,010 |
|
|
|
5,423 |
|
| |
|
|
15,969 |
|
|
|
16,100 |
|
|
|
15,047 |
|
|
|
49,150 |
|
|
|
53,258 |
|
|
Net (loss) gain on sale of securities |
|
|
(2,657 |
) |
|
|
(4,527 |
) |
|
|
6 |
|
|
|
(14,436 |
) |
|
|
473 |
|
|
Net change in valuation of financial instruments carried at fair
value |
|
|
(654 |
) |
|
|
(3,151 |
) |
|
|
532 |
|
|
|
(4,357 |
) |
|
|
650 |
|
|
Gain on sale of branches, including related deposits |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,804 |
|
|
Total non-interest income |
|
|
12,658 |
|
|
|
8,422 |
|
|
|
15,585 |
|
|
|
30,357 |
|
|
|
62,185 |
|
| NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Salary and employee benefits |
|
|
61,091 |
|
|
|
61,972 |
|
|
|
61,639 |
|
|
|
184,452 |
|
|
|
181,957 |
|
|
Less capitalized loan origination costs |
|
|
(4,498 |
) |
|
|
(4,457 |
) |
|
|
(5,984 |
) |
|
|
(12,386 |
) |
|
|
(19,436 |
) |
|
Occupancy and equipment |
|
|
11,722 |
|
|
|
11,994 |
|
|
|
12,008 |
|
|
|
35,686 |
|
|
|
38,512 |
|
|
Information and computer data services |
|
|
7,118 |
|
|
|
7,082 |
|
|
|
6,803 |
|
|
|
21,347 |
|
|
|
19,451 |
|
|
Payment and card processing services |
|
|
5,172 |
|
|
|
4,669 |
|
|
|
5,508 |
|
|
|
14,459 |
|
|
|
16,086 |
|
|
Professional and legal expenses |
|
|
3,042 |
|
|
|
2,400 |
|
|
|
2,619 |
|
|
|
7,563 |
|
|
|
7,677 |
|
|
Advertising and marketing |
|
|
1,362 |
|
|
|
940 |
|
|
|
1,326 |
|
|
|
3,108 |
|
|
|
2,609 |
|
|
Deposit insurance |
|
|
2,874 |
|
|
|
2,839 |
|
|
|
1,946 |
|
|
|
7,603 |
|
|
|
4,910 |
|
|
State and municipal business and use taxes |
|
|
1,359 |
|
|
|
1,229 |
|
|
|
1,223 |
|
|
|
3,888 |
|
|
|
3,389 |
|
|
Real estate operations, net |
|
|
(383 |
) |
|
|
75 |
|
|
|
68 |
|
|
|
(585 |
) |
|
|
(132 |
) |
|
Amortization of core deposit intangibles |
|
|
857 |
|
|
|
991 |
|
|
|
1,215 |
|
|
|
2,898 |
|
|
|
4,064 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
793 |
|
|
Miscellaneous |
|
|
6,175 |
|
|
|
5,671 |
|
|
|
6,663 |
|
|
|
17,884 |
|
|
|
18,402 |
|
|
Total non-interest expense |
|
|
95,891 |
|
|
|
95,405 |
|
|
|
95,034 |
|
|
|
285,917 |
|
|
|
278,282 |
|
|
Income before provision for income taxes |
|
|
56,506 |
|
|
|
48,771 |
|
|
|
60,907 |
|
|
|
173,769 |
|
|
|
174,351 |
|
| PROVISION
FOR INCOME TAXES |
|
|
10,652 |
|
|
|
9,180 |
|
|
|
11,837 |
|
|
|
32,769 |
|
|
|
33,353 |
|
| NET
INCOME |
|
$ |
45,854 |
|
|
$ |
39,591 |
|
|
$ |
49,070 |
|
|
$ |
141,000 |
|
|
$ |
140,998 |
|
| Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.33 |
|
|
$ |
1.15 |
|
|
$ |
1.43 |
|
|
$ |
4.11 |
|
|
$ |
4.11 |
|
|
Diluted |
|
$ |
1.33 |
|
|
$ |
1.15 |
|
|
$ |
1.43 |
|
|
$ |
4.09 |
|
|
$ |
4.09 |
|
| Cumulative dividends declared
per common share |
|
$ |
0.48 |
|
|
$ |
0.48 |
|
|
$ |
0.44 |
|
|
$ |
1.44 |
|
|
$ |
1.32 |
|
| Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
34,379,865 |
|
|
|
34,373,434 |
|
|
|
34,224,640 |
|
|
|
34,331,458 |
|
|
|
34,277,182 |
|
|
Diluted |
|
|
34,429,726 |
|
|
|
34,409,024 |
|
|
|
34,416,017 |
|
|
|
34,439,214 |
|
|
|
34,499,246 |
|
| Increase (decrease) in common
shares outstanding |
|
|
1,322 |
|
|
|
36,087 |
|
|
|
429 |
|
|
|
151,931 |
|
|
|
(60,873 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL CONDITION |
|
|
|
|
|
|
|
|
|
Percentage Change |
| (in thousands except shares and
per share data) |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
207,171 |
|
|
$ |
229,918 |
|
|
$ |
198,154 |
|
|
$ |
273,052 |
|
|
(9.9 |
)% |
|
(24.1 |
)% |
| Interest-bearing deposits |
|
|
44,535 |
|
|
|
51,407 |
|
|
|
44,908 |
|
|
|
548,869 |
|
|
(13.4 |
)% |
|
(91.9 |
)% |
|
Total cash and cash equivalents |
|
|
251,706 |
|
|
|
281,325 |
|
|
|
243,062 |
|
|
|
821,921 |
|
|
(10.5 |
)% |
|
(69.4 |
)% |
| Securities - trading |
|
|
25,268 |
|
|
|
25,659 |
|
|
|
28,694 |
|
|
|
28,383 |
|
|
(1.5 |
)% |
|
(11.0 |
)% |
| Securities - available for
sale, amortized cost $2,774,972, $2,879,179, $3,218,777 and
$3,433,541, respectively |
|
|
2,287,993 |
|
|
|
2,465,960 |
|
|
|
2,789,031 |
|
|
|
2,996,173 |
|
|
(7.2 |
)% |
|
(23.6 |
)% |
| Securities - held to maturity,
fair value $853,653, $933,116, $942,180 and $947,416,
respectively |
|
|
1,082,156 |
|
|
|
1,098,570 |
|
|
|
1,117,588 |
|
|
|
1,132,852 |
|
|
(1.5 |
)% |
|
(4.5 |
)% |
|
Total securities |
|
|
3,395,417 |
|
|
|
3,590,189 |
|
|
|
3,935,313 |
|
|
|
4,157,408 |
|
|
(5.4 |
)% |
|
(18.3 |
)% |
| FHLB stock |
|
|
15,600 |
|
|
|
20,800 |
|
|
|
12,000 |
|
|
|
10,000 |
|
|
(25.0 |
)% |
|
56.0 |
% |
| Securities purchased under
agreements to resell |
|
|
— |
|
|
|
— |
|
|
|
300,000 |
|
|
|
300,000 |
|
|
nm |
|
|
(100.0 |
)% |
| Loans held for sale |
|
|
54,158 |
|
|
|
60,612 |
|
|
|
56,857 |
|
|
|
84,358 |
|
|
(10.6 |
)% |
|
(35.8 |
)% |
| Loans receivable |
|
|
10,611,417 |
|
|
|
10,472,407 |
|
|
|
10,146,724 |
|
|
|
9,827,096 |
|
|
1.3 |
% |
|
8.0 |
% |
| Allowance for credit losses –
loans |
|
|
(146,960 |
) |
|
|
(144,680 |
) |
|
|
(141,465 |
) |
|
|
(135,918 |
) |
|
1.6 |
% |
|
8.1 |
% |
|
Net loans receivable |
|
|
10,464,457 |
|
|
|
10,327,727 |
|
|
|
10,005,259 |
|
|
|
9,691,178 |
|
|
1.3 |
% |
|
8.0 |
% |
| Accrued interest
receivable |
|
|
61,040 |
|
|
|
57,007 |
|
|
|
57,284 |
|
|
|
50,689 |
|
|
7.1 |
% |
|
20.4 |
% |
| Property and equipment,
net |
|
|
136,504 |
|
|
|
135,414 |
|
|
|
138,754 |
|
|
|
141,280 |
|
|
0.8 |
% |
|
(3.4 |
)% |
| Goodwill |
|
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
|
373,121 |
|
|
— |
% |
|
— |
% |
| Other intangibles, net |
|
|
6,542 |
|
|
|
7,399 |
|
|
|
9,440 |
|
|
|
10,655 |
|
|
(11.6 |
)% |
|
(38.6 |
)% |
| Bank-owned life insurance |
|
|
303,347 |
|
|
|
301,260 |
|
|
|
297,565 |
|
|
|
295,443 |
|
|
0.7 |
% |
|
2.7 |
% |
| Operating lease right-of-use
assets |
|
|
43,447 |
|
|
|
45,812 |
|
|
|
49,283 |
|
|
|
51,908 |
|
|
(5.2 |
)% |
|
(16.3 |
)% |
| Other assets |
|
|
402,541 |
|
|
|
384,070 |
|
|
|
355,493 |
|
|
|
372,848 |
|
|
4.8 |
% |
|
8.0 |
% |
|
Total assets |
|
$ |
15,507,880 |
|
|
$ |
15,584,736 |
|
|
$ |
15,833,431 |
|
|
$ |
16,360,809 |
|
|
(0.5 |
)% |
|
(5.2 |
)% |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing |
|
$ |
5,197,854 |
|
|
$ |
5,369,187 |
|
|
$ |
6,176,998 |
|
|
$ |
6,507,523 |
|
|
(3.2 |
)% |
|
(20.1 |
)% |
|
Interest-bearing transaction and savings accounts |
|
|
6,518,385 |
|
|
|
6,373,269 |
|
|
|
6,719,531 |
|
|
|
7,004,799 |
|
|
2.3 |
% |
|
(6.9 |
)% |
|
Interest-bearing certificates |
|
|
1,458,313 |
|
|
|
1,356,600 |
|
|
|
723,530 |
|
|
|
721,944 |
|
|
7.5 |
% |
|
102.0 |
% |
|
Total deposits |
|
|
13,174,552 |
|
|
|
13,099,056 |
|
|
|
13,620,059 |
|
|
|
14,234,266 |
|
|
0.6 |
% |
|
(7.4 |
)% |
| Advances from FHLB |
|
|
140,000 |
|
|
|
270,000 |
|
|
|
50,000 |
|
|
|
— |
|
|
(48.1 |
)% |
|
nm |
|
| Other borrowings |
|
|
188,440 |
|
|
|
193,019 |
|
|
|
232,799 |
|
|
|
234,006 |
|
|
(2.4 |
)% |
|
(19.5 |
)% |
| Subordinated notes, net |
|
|
92,748 |
|
|
|
92,646 |
|
|
|
98,947 |
|
|
|
98,849 |
|
|
0.1 |
% |
|
(6.2 |
)% |
| Junior subordinated debentures
at fair value |
|
|
66,284 |
|
|
|
67,237 |
|
|
|
74,857 |
|
|
|
73,841 |
|
|
(1.4 |
)% |
|
(10.2 |
)% |
| Operating lease
liabilities |
|
|
48,642 |
|
|
|
51,234 |
|
|
|
55,205 |
|
|
|
58,031 |
|
|
(5.1 |
)% |
|
(16.2 |
)% |
| Accrued expenses and other
liabilities |
|
|
231,478 |
|
|
|
223,565 |
|
|
|
200,839 |
|
|
|
209,226 |
|
|
3.5 |
% |
|
10.6 |
% |
| Deferred compensation |
|
|
45,129 |
|
|
|
45,466 |
|
|
|
44,293 |
|
|
|
43,931 |
|
|
(0.7 |
)% |
|
2.7 |
% |
|
Total liabilities |
|
|
13,987,273 |
|
|
|
14,042,223 |
|
|
|
14,376,999 |
|
|
|
14,952,150 |
|
|
(0.4 |
)% |
|
(6.5 |
)% |
| SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
1,297,307 |
|
|
|
1,294,934 |
|
|
|
1,293,959 |
|
|
|
1,291,741 |
|
|
0.2 |
% |
|
0.4 |
% |
| Retained earnings |
|
|
616,215 |
|
|
|
587,027 |
|
|
|
525,242 |
|
|
|
486,108 |
|
|
5.0 |
% |
|
26.8 |
% |
| Accumulated other
comprehensive loss |
|
|
(392,915 |
) |
|
|
(339,448 |
) |
|
|
(362,769 |
) |
|
|
(369,190 |
) |
|
15.8 |
% |
|
6.4 |
% |
|
Total shareholders’ equity |
|
|
1,520,607 |
|
|
|
1,542,513 |
|
|
|
1,456,432 |
|
|
|
1,408,659 |
|
|
(1.4 |
)% |
|
7.9 |
% |
|
Total liabilities and shareholders’ equity |
|
$ |
15,507,880 |
|
|
$ |
15,584,736 |
|
|
$ |
15,833,431 |
|
|
$ |
16,360,809 |
|
|
(0.5 |
)% |
|
(5.2 |
)% |
| Common Shares
Issued: |
|
|
|
|
|
|
|
|
|
|
|
|
| Shares outstanding at end of
period |
|
|
34,345,949 |
|
|
|
34,344,627 |
|
|
|
34,194,018 |
|
|
|
34,191,759 |
|
|
|
|
|
| Common shareholders’ equity
per share(1) |
|
$ |
44.27 |
|
|
$ |
44.91 |
|
|
$ |
42.59 |
|
|
$ |
41.20 |
|
|
|
|
|
| Common shareholders’ tangible
equity per share(1) (2) |
|
$ |
33.22 |
|
|
$ |
33.83 |
|
|
$ |
31.41 |
|
|
$ |
29.97 |
|
|
|
|
|
| Common shareholders’ tangible
equity to tangible assets(2) |
|
|
7.54 |
% |
|
|
7.64 |
% |
|
|
6.95 |
% |
|
|
6.41 |
% |
|
|
|
|
| Consolidated Tier 1 leverage
capital ratio |
|
|
10.40 |
% |
|
|
10.22 |
% |
|
|
9.45 |
% |
|
|
9.06 |
% |
|
|
|
|
|
(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 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 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial real estate
(CRE): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner-occupied |
|
$ |
911,540 |
|
|
$ |
894,876 |
|
|
$ |
845,320 |
|
|
$ |
862,792 |
|
|
1.9 |
% |
|
5.7 |
% |
|
Investment properties |
|
|
1,530,087 |
|
|
|
1,558,176 |
|
|
|
1,589,975 |
|
|
|
1,604,881 |
|
|
(1.8 |
)% |
|
(4.7 |
)% |
|
Small balance CRE |
|
|
1,169,828 |
|
|
|
1,172,825 |
|
|
|
1,200,251 |
|
|
|
1,188,351 |
|
|
(0.3 |
)% |
|
(1.6 |
)% |
| Multifamily real estate |
|
|
766,571 |
|
|
|
699,830 |
|
|
|
645,071 |
|
|
|
592,834 |
|
|
9.5 |
% |
|
29.3 |
% |
| Construction, land and land
development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial construction |
|
|
168,061 |
|
|
|
183,765 |
|
|
|
184,876 |
|
|
|
171,029 |
|
|
(8.5 |
)% |
|
(1.7 |
)% |
|
Multifamily construction |
|
|
453,129 |
|
|
|
433,868 |
|
|
|
325,816 |
|
|
|
275,488 |
|
|
4.4 |
% |
|
64.5 |
% |
|
One- to four-family construction |
|
|
536,349 |
|
|
|
547,200 |
|
|
|
647,329 |
|
|
|
666,350 |
|
|
(2.0 |
)% |
|
(19.5 |
)% |
|
Land and land development |
|
|
346,362 |
|
|
|
345,053 |
|
|
|
328,475 |
|
|
|
329,459 |
|
|
0.4 |
% |
|
5.1 |
% |
| Commercial business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
|
1,263,747 |
|
|
|
1,313,226 |
|
|
|
1,283,407 |
|
|
|
1,242,550 |
|
|
(3.8 |
)% |
|
1.7 |
% |
|
Small business scored |
|
|
1,000,714 |
|
|
|
982,283 |
|
|
|
947,092 |
|
|
|
906,647 |
|
|
1.9 |
% |
|
10.4 |
% |
| Agricultural business,
including secured by farmland: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural business, including secured by farmland |
|
|
334,626 |
|
|
|
310,120 |
|
|
|
295,077 |
|
|
|
299,400 |
|
|
7.9 |
% |
|
11.8 |
% |
| One- to four-family
residential |
|
|
1,438,694 |
|
|
|
1,340,126 |
|
|
|
1,173,112 |
|
|
|
1,025,143 |
|
|
7.4 |
% |
|
40.3 |
% |
| Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer—home equity revolving lines of credit |
|
|
579,836 |
|
|
|
577,725 |
|
|
|
566,291 |
|
|
|
545,807 |
|
|
0.4 |
% |
|
6.2 |
% |
|
Consumer—other |
|
|
111,873 |
|
|
|
113,334 |
|
|
|
114,632 |
|
|
|
116,365 |
|
|
(1.3 |
)% |
|
(3.9 |
)% |
|
Total loans receivable |
|
$ |
10,611,417 |
|
|
$ |
10,472,407 |
|
|
$ |
10,146,724 |
|
|
$ |
9,827,096 |
|
|
1.3 |
% |
|
8.0 |
% |
| Loans 30 - 89 days past due
and on accrual |
|
$ |
6,108 |
|
|
$ |
6,259 |
|
|
$ |
17,186 |
|
|
$ |
15,208 |
|
|
|
|
|
| Total delinquent loans
(including loans on non-accrual), net |
|
$ |
28,312 |
|
|
$ |
29,135 |
|
|
$ |
32,371 |
|
|
$ |
21,728 |
|
|
|
|
|
| Total delinquent
loans / Total loans receivable |
|
|
0.27 |
% |
|
|
0.28 |
% |
|
|
0.32 |
% |
|
|
0.22 |
% |
|
|
|
|
| LOANS BY GEOGRAPHIC
LOCATION |
|
|
|
|
|
|
|
|
|
|
|
Percentage Change |
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
| |
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Amount |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington |
|
$ |
5,046,028 |
|
47.6 |
% |
|
$ |
4,945,074 |
|
$ |
4,777,546 |
|
$ |
4,648,124 |
|
2.0 |
% |
|
8.6 |
% |
| California |
|
|
2,570,175 |
|
24.2 |
% |
|
|
2,537,121 |
|
|
2,484,980 |
|
|
2,323,740 |
|
1.3 |
% |
|
10.6 |
% |
| Oregon |
|
|
1,929,531 |
|
18.2 |
% |
|
|
1,913,929 |
|
|
1,826,743 |
|
|
1,765,254 |
|
0.8 |
% |
|
9.3 |
% |
| Idaho |
|
|
600,648 |
|
5.7 |
% |
|
|
595,065 |
|
|
565,586 |
|
|
588,498 |
|
0.9 |
% |
|
2.1 |
% |
| Utah |
|
|
57,711 |
|
0.5 |
% |
|
|
62,720 |
|
|
75,967 |
|
|
95,250 |
|
(8.0 |
)% |
|
(39.4 |
)% |
| Other |
|
|
407,324 |
|
3.8 |
% |
|
|
418,498 |
|
|
415,902 |
|
|
406,230 |
|
(2.7 |
)% |
|
0.3 |
% |
| Total loans receivable |
|
$ |
10,611,417 |
|
100.0 |
% |
|
$ |
10,472,407 |
|
$ |
10,146,724 |
|
$ |
9,827,096 |
|
1.3 |
% |
|
8.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
| (dollars in thousands) |
|
| |
|
| LOAN
ORIGINATIONS |
Quarters Ended |
| |
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
|
Commercial real estate |
$ |
62,337 |
|
$ |
94,640 |
|
$ |
92,062 |
| Multifamily real estate |
|
12,725 |
|
|
3,441 |
|
|
4,603 |
| Construction and land |
|
421,656 |
|
|
488,980 |
|
|
444,365 |
| Commercial business |
|
157,833 |
|
|
128,404 |
|
|
218,044 |
| Agricultural business |
|
17,466 |
|
|
28,367 |
|
|
9,879 |
| One-to four-family
residential |
|
43,622 |
|
|
52,618 |
|
|
92,701 |
| Consumer |
|
70,043 |
|
|
112,555 |
|
|
126,940 |
| Total loan originations
(excluding loans held for sale) |
$ |
785,682 |
|
$ |
909,005 |
|
$ |
988,594 |
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
| |
|
Quarters Ended |
| CHANGE IN
THE |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
| ALLOWANCE FOR CREDIT
LOSSES – LOANS |
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
144,680 |
|
|
$ |
141,457 |
|
|
$ |
128,702 |
|
| Provision for credit losses –
loans |
|
|
2,943 |
|
|
|
3,559 |
|
|
|
6,347 |
|
| Recoveries of loans previously
charged off: |
|
|
|
|
|
|
|
Commercial real estate |
|
|
170 |
|
|
|
74 |
|
|
|
88 |
|
|
Construction and land |
|
|
29 |
|
|
|
— |
|
|
|
— |
|
|
One- to four-family real estate |
|
|
59 |
|
|
|
36 |
|
|
|
25 |
|
|
Commercial business |
|
|
403 |
|
|
|
524 |
|
|
|
924 |
|
|
Agricultural business, including secured by farmland |
|
|
19 |
|
|
|
2 |
|
|
|
252 |
|
|
Consumer |
|
|
126 |
|
|
|
117 |
|
|
|
85 |
|
| |
|
|
806 |
|
|
|
753 |
|
|
|
1,374 |
|
| Loans charged off: |
|
|
|
|
|
|
|
Construction and land |
|
|
— |
|
|
|
(156 |
) |
|
|
(25 |
) |
|
One- to four-family real estate |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
Commercial business |
|
|
(616 |
) |
|
|
(566 |
) |
|
|
(138 |
) |
|
Agricultural business, including secured by farmland |
|
|
(564 |
) |
|
|
— |
|
|
|
(42 |
) |
|
Consumer |
|
|
(289 |
) |
|
|
(363 |
) |
|
|
(300 |
) |
| |
|
|
(1,469 |
) |
|
|
(1,089 |
) |
|
|
(505 |
) |
|
Net (charge-offs) recoveries |
|
|
(663 |
) |
|
|
(336 |
) |
|
|
869 |
|
| Balance, end of period |
|
$ |
146,960 |
|
|
$ |
144,680 |
|
|
$ |
135,918 |
|
| Net (charge-offs) recoveries /
Average loans receivable |
|
(0.006 |
)% |
|
(0.003 |
)% |
|
|
0.009 |
% |
| |
|
|
|
|
|
|
| ALLOCATION
OF |
|
|
|
|
|
|
| ALLOWANCE FOR CREDIT
LOSSES – LOANS |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
|
Commercial real estate |
|
$ |
44,016 |
|
|
$ |
43,636 |
|
|
$ |
44,365 |
|
|
Multifamily real estate |
|
|
8,804 |
|
|
|
8,039 |
|
|
|
7,114 |
|
|
Construction and land |
|
|
29,389 |
|
|
|
29,844 |
|
|
|
27,985 |
|
|
One- to four-family real estate |
|
|
17,925 |
|
|
|
16,737 |
|
|
|
12,394 |
|
|
Commercial business |
|
|
34,065 |
|
|
|
33,880 |
|
|
|
31,854 |
|
|
Agricultural business, including secured by farmland |
|
|
3,718 |
|
|
|
3,573 |
|
|
|
3,455 |
|
|
Consumer |
|
|
9,043 |
|
|
|
8,971 |
|
|
|
8,751 |
|
|
Total allowance for credit losses – loans |
|
$ |
146,960 |
|
|
$ |
144,680 |
|
|
$ |
135,918 |
|
| Allowance for credit losses -
loans / Total loans receivable |
|
|
1.38 |
% |
|
|
1.38 |
% |
|
|
1.38 |
% |
| Allowance for credit losses -
loans / Non-performing loans |
|
|
560 |
% |
|
|
513 |
% |
|
|
895 |
% |
| |
|
Quarters Ended |
| CHANGE IN
THE |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
| ALLOWANCE FOR CREDIT
LOSSES - UNFUNDED LOAN COMMITMENTS |
|
|
|
|
|
|
|
Balance, beginning of period |
|
$ |
14,664 |
|
$ |
13,443 |
|
$ |
14,246 |
|
| Provision (recapture) for
credit losses - unfunded loan commitments |
|
|
346 |
|
|
1,221 |
|
|
(205 |
) |
| Balance, end of period |
|
$ |
15,010 |
|
$ |
14,664 |
|
$ |
14,041 |
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
| NON-PERFORMING
ASSETS |
|
|
|
|
|
|
|
| |
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
| Loans on non-accrual
status: |
|
|
|
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
|
|
|
Commercial |
$ |
1,365 |
|
|
$ |
2,478 |
|
|
$ |
3,683 |
|
|
$ |
6,997 |
|
|
Construction and land |
|
5,538 |
|
|
|
2,280 |
|
|
|
181 |
|
|
|
299 |
|
|
One- to four-family |
|
5,480 |
|
|
|
7,605 |
|
|
|
5,236 |
|
|
|
2,381 |
|
|
Commercial business |
|
5,289 |
|
|
|
8,439 |
|
|
|
9,886 |
|
|
|
1,462 |
|
|
Agricultural business, including secured by farmland |
|
3,170 |
|
|
|
3,997 |
|
|
|
594 |
|
|
|
594 |
|
|
Consumer |
|
3,378 |
|
|
|
3,272 |
|
|
|
2,126 |
|
|
|
1,779 |
|
| |
|
24,220 |
|
|
|
28,071 |
|
|
|
21,706 |
|
|
|
13,512 |
|
| Loans more than 90 days
delinquent, still on accrual: |
|
|
|
|
|
|
|
|
Secured by real estate: |
|
|
|
|
|
|
|
|
One- to four-family |
|
1,799 |
|
|
|
60 |
|
|
|
1,023 |
|
|
|
1,556 |
|
|
Commercial business |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
64 |
|
|
Consumer |
|
245 |
|
|
|
49 |
|
|
|
264 |
|
|
|
61 |
|
| |
|
2,044 |
|
|
|
109 |
|
|
|
1,287 |
|
|
|
1,681 |
|
| Total non-performing
loans |
|
26,264 |
|
|
|
28,180 |
|
|
|
22,993 |
|
|
|
15,193 |
|
| REO |
|
546 |
|
|
|
546 |
|
|
|
340 |
|
|
|
340 |
|
| Other repossessed assets |
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
17 |
|
|
Total non-performing assets |
$ |
26,810 |
|
|
$ |
28,726 |
|
|
$ |
23,350 |
|
|
$ |
15,550 |
|
| Total non-performing
assets to total assets |
|
0.17 |
% |
|
|
0.18 |
% |
|
|
0.15 |
% |
|
|
0.10 |
% |
| LOANS BY CREDIT RISK
RATING |
|
|
|
|
|
|
|
| |
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Pass |
$ |
10,467,498 |
|
$ |
10,315,687 |
|
$ |
10,000,493 |
|
$ |
9,672,473 |
| Special Mention |
|
19,394 |
|
|
11,745 |
|
|
9,081 |
|
|
18,251 |
| Substandard |
|
124,525 |
|
|
144,975 |
|
|
137,150 |
|
|
136,372 |
| Total |
$ |
10,611,417 |
|
$ |
10,472,407 |
|
$ |
10,146,724 |
|
$ |
9,827,096 |
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| DEPOSIT
COMPOSITION |
|
|
|
|
|
|
|
|
|
Percentage Change |
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Prior Qtr |
|
Prior Yr Qtr |
|
Non-interest-bearing |
|
$ |
5,197,854 |
|
$ |
5,369,187 |
|
$ |
6,176,998 |
|
$ |
6,507,523 |
|
(3.2 |
)% |
|
(20.1 |
)% |
| Interest-bearing checking |
|
|
2,006,866 |
|
|
1,908,402 |
|
|
1,811,153 |
|
|
1,856,244 |
|
5.2 |
% |
|
8.1 |
% |
| Regular savings accounts |
|
|
2,751,453 |
|
|
2,588,298 |
|
|
2,710,090 |
|
|
2,824,711 |
|
6.3 |
% |
|
(2.6 |
)% |
| Money market accounts |
|
|
1,760,066 |
|
|
1,876,569 |
|
|
2,198,288 |
|
|
2,323,844 |
|
(6.2 |
)% |
|
(24.3 |
)% |
|
Total interest-bearing transaction and savings accounts |
|
|
6,518,385 |
|
|
6,373,269 |
|
|
6,719,531 |
|
|
7,004,799 |
|
2.3 |
% |
|
(6.9 |
)% |
|
Total core deposits |
|
|
11,716,239 |
|
|
11,742,456 |
|
|
12,896,529 |
|
|
13,512,322 |
|
(0.2 |
)% |
|
(13.3 |
)% |
| Interest-bearing
certificates |
|
|
1,458,313 |
|
|
1,356,600 |
|
|
723,530 |
|
|
721,944 |
|
7.5 |
% |
|
102.0 |
% |
|
Total deposits |
|
$ |
13,174,552 |
|
$ |
13,099,056 |
|
$ |
13,620,059 |
|
$ |
14,234,266 |
|
0.6 |
% |
|
(7.4 |
)% |
| GEOGRAPHIC
CONCENTRATION OF DEPOSITS |
|
|
|
|
|
|
|
|
|
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Percentage Change |
|
| |
|
Amount |
|
Percentage |
|
Amount |
|
Amount |
|
Amount |
|
Prior Qtr |
|
Prior Yr Qtr |
|
|
Washington |
|
$ |
7,241,341 |
|
55.0 |
% |
|
$ |
7,255,731 |
|
$ |
7,563,056 |
|
$ |
7,845,755 |
|
(0.2 |
)% |
|
(7.7 |
)% |
|
Oregon |
|
|
2,918,446 |
|
22.1 |
% |
|
|
2,914,267 |
|
|
2,998,572 |
|
|
3,148,520 |
|
0.1 |
% |
|
(7.3 |
)% |
| California |
|
|
2,342,345 |
|
17.8 |
% |
|
|
2,257,247 |
|
|
2,331,524 |
|
|
2,493,977 |
|
3.8 |
% |
|
(6.1 |
)% |
| Idaho |
|
|
672,420 |
|
5.1 |
% |
|
|
671,811 |
|
|
726,907 |
|
|
746,014 |
|
0.1 |
% |
|
(9.9 |
)% |
| Total deposits |
|
$ |
13,174,552 |
|
100.0 |
% |
|
$ |
13,099,056 |
|
$ |
13,620,059 |
|
$ |
14,234,266 |
|
0.6 |
% |
|
(7.4 |
)% |
| INCLUDED IN TOTAL
DEPOSITS |
|
|
|
|
|
|
|
|
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Public non-interest-bearing accounts |
|
$ |
169,058 |
|
$ |
191,591 |
|
$ |
212,533 |
|
$ |
192,742 |
| Public interest-bearing
transaction & savings accounts |
|
|
188,831 |
|
|
189,140 |
|
|
180,326 |
|
|
172,567 |
| Public interest-bearing
certificates |
|
|
46,349 |
|
|
45,840 |
|
|
26,810 |
|
|
33,787 |
|
Total public deposits |
|
$ |
404,238 |
|
$ |
426,571 |
|
$ |
419,669 |
|
$ |
399,096 |
| Collateralized public
deposits |
|
$ |
300,189 |
|
$ |
309,665 |
|
$ |
304,244 |
|
$ |
301,853 |
| Total brokered deposits |
|
$ |
162,856 |
|
$ |
203,649 |
|
$ |
— |
|
$ |
— |
| |
|
|
|
|
|
|
|
|
| AVERAGE ACCOUNT
BALANCE PER DEPOSIT ACCOUNT |
|
|
|
|
|
|
|
|
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
| Number of deposit
accounts |
|
|
466,159 |
|
|
467,490 |
|
|
471,140 |
|
|
477,082 |
| Average account balance per
account |
|
$ |
28 |
|
$ |
28 |
|
$ |
29 |
|
$ |
30 |
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| ESTIMATED REGULATORY
CAPITAL RATIOS AS OF SEPTEMBER 30, 2023 |
|
Actual |
|
Minimum to be categorized as “Adequately
Capitalized” |
|
Minimum to becategorized
as“Well Capitalized” |
| |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Banner
Corporation-consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
$ |
1,873,419 |
|
14.34 |
% |
|
$ |
1,045,239 |
|
8.00 |
% |
|
$ |
1,306,548 |
|
10.00 |
% |
| Tier 1 capital to
risk-weighted assets |
|
|
1,621,146 |
|
12.41 |
% |
|
|
783,929 |
|
6.00 |
% |
|
|
783,929 |
|
6.00 |
% |
| Tier 1 leverage capital to
average assets |
|
|
1,621,146 |
|
10.40 |
% |
|
|
623,306 |
|
4.00 |
% |
|
n/a |
|
n/a |
| Common equity tier 1 capital
to risk-weighted assets |
|
|
1,534,646 |
|
11.75 |
% |
|
|
587,947 |
|
4.50 |
% |
|
n/a |
|
n/a |
| Banner Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total capital to risk-weighted
assets |
|
|
1,768,801 |
|
13.54 |
% |
|
|
1,045,221 |
|
8.00 |
% |
|
|
1,306,526 |
|
10.00 |
% |
| Tier 1 capital to
risk-weighted assets |
|
|
1,616,528 |
|
12.37 |
% |
|
|
783,916 |
|
6.00 |
% |
|
|
1,045,221 |
|
8.00 |
% |
| Tier 1 leverage capital to
average assets |
|
|
1,616,528 |
|
10.38 |
% |
|
|
623,184 |
|
4.00 |
% |
|
|
778,980 |
|
5.00 |
% |
| Common equity tier 1 capital
to risk-weighted assets |
|
|
1,616,528 |
|
12.37 |
% |
|
|
587,937 |
|
4.50 |
% |
|
|
849,242 |
|
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 |
| |
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
| |
Average Balance |
|
Interest and Dividends |
|
Yield / Cost(3) |
|
Average Balance |
|
Interest and Dividends |
|
Yield / Cost(3) |
|
Average Balance |
|
Interest and Dividends |
|
Yield / Cost(3) |
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for sale loans |
$ |
56,697 |
|
$ |
765 |
|
|
5.35 |
% |
|
$ |
56,073 |
|
$ |
738 |
|
|
5.28 |
% |
|
$ |
68,608 |
|
$ |
676 |
|
|
3.91 |
% |
|
Mortgage loans |
|
8,596,705 |
|
|
118,285 |
|
|
5.46 |
% |
|
|
8,413,392 |
|
|
112,097 |
|
|
5.34 |
% |
|
|
7,841,018 |
|
|
94,581 |
|
|
4.79 |
% |
|
Commercial/agricultural loans |
|
1,822,609 |
|
|
29,866 |
|
|
6.50 |
% |
|
|
1,763,264 |
|
|
27,616 |
|
|
6.28 |
% |
|
|
1,670,595 |
|
|
20,418 |
|
|
4.85 |
% |
|
SBA PPP loans |
|
4,298 |
|
|
28 |
|
|
2.58 |
% |
|
|
5,247 |
|
|
67 |
|
|
5.12 |
% |
|
|
21,943 |
|
|
613 |
|
|
11.08 |
% |
|
Consumer and other loans |
|
138,723 |
|
|
2,226 |
|
|
6.37 |
% |
|
|
138,902 |
|
|
2,137 |
|
|
6.17 |
% |
|
|
120,583 |
|
|
1,824 |
|
|
6.00 |
% |
|
Total loans(1) |
|
10,619,032 |
|
|
151,170 |
|
|
5.65 |
% |
|
|
10,376,878 |
|
|
142,655 |
|
|
5.51 |
% |
|
|
9,722,747 |
|
|
118,112 |
|
|
4.82 |
% |
|
Mortgage-backed securities |
|
2,863,345 |
|
|
17,834 |
|
|
2.47 |
% |
|
|
2,958,700 |
|
|
18,429 |
|
|
2.50 |
% |
|
|
3,183,837 |
|
|
17,704 |
|
|
2.21 |
% |
|
Other securities |
|
1,071,389 |
|
|
12,128 |
|
|
4.49 |
% |
|
|
1,184,503 |
|
|
12,932 |
|
|
4.38 |
% |
|
|
1,671,305 |
|
|
13,578 |
|
|
3.22 |
% |
|
Interest-bearing deposits with banks |
|
43,594 |
|
|
529 |
|
|
4.81 |
% |
|
|
44,922 |
|
|
557 |
|
|
4.97 |
% |
|
|
778,196 |
|
|
4,406 |
|
|
2.25 |
% |
|
FHLB stock |
|
16,443 |
|
|
385 |
|
|
9.29 |
% |
|
|
25,611 |
|
|
157 |
|
|
2.46 |
% |
|
|
10,000 |
|
|
75 |
|
|
2.98 |
% |
|
Total investment securities |
|
3,994,771 |
|
|
30,876 |
|
|
3.07 |
% |
|
|
4,213,736 |
|
|
32,075 |
|
|
3.05 |
% |
|
|
5,643,338 |
|
|
35,763 |
|
|
2.51 |
% |
|
Total interest-earning assets |
|
14,613,803 |
|
|
182,046 |
|
|
4.94 |
% |
|
|
14,590,614 |
|
|
174,730 |
|
|
4.80 |
% |
|
|
15,366,085 |
|
|
153,875 |
|
|
3.97 |
% |
| Non-interest-earning
assets |
|
932,364 |
|
|
|
|
|
|
939,100 |
|
|
|
|
|
|
1,100,313 |
|
|
|
|
|
Total assets |
$ |
15,546,167 |
|
|
|
|
|
$ |
15,529,714 |
|
|
|
|
|
$ |
16,466,398 |
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
1,971,179 |
|
|
4,190 |
|
|
0.84 |
% |
|
$ |
1,870,605 |
|
|
2,331 |
|
|
0.50 |
% |
|
$ |
1,862,887 |
|
|
429 |
|
|
0.09 |
% |
|
Savings accounts |
|
2,659,890 |
|
|
8,400 |
|
|
1.25 |
% |
|
|
2,536,713 |
|
|
4,895 |
|
|
0.77 |
% |
|
|
2,822,153 |
|
|
481 |
|
|
0.07 |
% |
|
Money market accounts |
|
1,793,953 |
|
|
6,639 |
|
|
1.47 |
% |
|
|
1,957,553 |
|
|
6,007 |
|
|
1.23 |
% |
|
|
2,378,851 |
|
|
769 |
|
|
0.13 |
% |
|
Certificates of deposit |
|
1,412,542 |
|
|
11,772 |
|
|
3.31 |
% |
|
|
1,126,647 |
|
|
7,306 |
|
|
2.60 |
% |
|
|
740,014 |
|
|
728 |
|
|
0.39 |
% |
|
Total interest-bearing deposits |
|
7,837,564 |
|
|
31,001 |
|
|
1.57 |
% |
|
|
7,491,518 |
|
|
20,539 |
|
|
1.10 |
% |
|
|
7,803,905 |
|
|
2,407 |
|
|
0.12 |
% |
|
Non-interest-bearing deposits |
|
5,316,023 |
|
|
— |
|
|
— |
% |
|
|
5,445,960 |
|
|
— |
|
|
— |
% |
|
|
6,458,749 |
|
|
— |
|
|
— |
% |
|
Total deposits |
|
13,153,587 |
|
|
31,001 |
|
|
0.94 |
% |
|
|
12,937,478 |
|
|
20,539 |
|
|
0.64 |
% |
|
|
14,262,654 |
|
|
2,407 |
|
|
0.07 |
% |
| Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
161,087 |
|
|
2,233 |
|
|
5.50 |
% |
|
|
390,705 |
|
|
5,157 |
|
|
5.29 |
% |
|
|
— |
|
|
— |
|
|
— |
% |
|
Other borrowings |
|
194,659 |
|
|
1,099 |
|
|
2.24 |
% |
|
|
188,060 |
|
|
771 |
|
|
1.64 |
% |
|
|
242,658 |
|
|
81 |
|
|
0.13 |
% |
|
Junior subordinated debentures and subordinated notes |
|
182,678 |
|
|
2,965 |
|
|
6.44 |
% |
|
|
185,096 |
|
|
2,824 |
|
|
6.12 |
% |
|
|
189,178 |
|
|
2,188 |
|
|
4.59 |
% |
|
Total borrowings |
|
538,424 |
|
|
6,297 |
|
|
4.64 |
% |
|
|
763,861 |
|
|
8,752 |
|
|
4.60 |
% |
|
|
431,836 |
|
|
2,269 |
|
|
2.08 |
% |
|
Total funding liabilities |
|
13,692,011 |
|
|
37,298 |
|
|
1.08 |
% |
|
|
13,701,339 |
|
|
29,291 |
|
|
0.86 |
% |
|
|
14,694,490 |
|
|
4,676 |
|
|
0.13 |
% |
| Other non-interest-bearing
liabilities(2) |
|
296,578 |
|
|
|
|
|
|
279,232 |
|
|
|
|
|
|
257,058 |
|
|
|
|
|
Total liabilities |
|
13,988,589 |
|
|
|
|
|
|
13,980,571 |
|
|
|
|
|
|
14,951,548 |
|
|
|
|
| Shareholders’ equity |
|
1,557,578 |
|
|
|
|
|
|
1,549,143 |
|
|
|
|
|
|
1,514,850 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
15,546,167 |
|
|
|
|
|
$ |
15,529,714 |
|
|
|
|
|
$ |
16,466,398 |
|
|
|
|
| Net interest income/rate
spread (tax equivalent) |
|
|
$ |
144,748 |
|
|
3.86 |
% |
|
|
|
$ |
145,439 |
|
|
3.94 |
% |
|
|
|
$ |
149,199 |
|
|
3.84 |
% |
| Net interest margin (tax
equivalent) |
|
|
|
|
3.93 |
% |
|
|
|
|
|
4.00 |
% |
|
|
|
|
|
3.85 |
% |
| Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjustments for taxable
equivalent basis |
|
|
|
(2,982 |
) |
|
|
|
|
|
|
(2,921 |
) |
|
|
|
|
|
|
(2,756 |
) |
|
|
| Net interest income and
margin, as reported |
|
|
$ |
141,766 |
|
|
3.85 |
% |
|
|
|
$ |
142,518 |
|
|
3.92 |
% |
|
|
|
$ |
146,443 |
|
|
3.78 |
% |
| Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
|
|
1.17 |
% |
|
|
|
|
|
1.02 |
% |
|
|
|
|
|
1.18 |
% |
| Return on average equity |
|
|
|
|
11.68 |
% |
|
|
|
|
|
10.25 |
% |
|
|
|
|
|
12.85 |
% |
| Average equity/average
assets |
|
|
|
|
10.02 |
% |
|
|
|
|
|
9.98 |
% |
|
|
|
|
|
9.20 |
% |
| Average interest-earning
assets/average interest-bearing liabilities |
|
|
|
|
174.47 |
% |
|
|
|
|
|
176.74 |
% |
|
|
|
|
|
186.58 |
% |
| Average interest-earning
assets/average funding liabilities |
|
|
|
|
106.73 |
% |
|
|
|
|
|
106.49 |
% |
|
|
|
|
|
104.57 |
% |
| Non-interest income/average
assets |
|
|
|
|
0.32 |
% |
|
|
|
|
|
0.22 |
% |
|
|
|
|
|
0.38 |
% |
| Non-interest expense/average
assets |
|
|
|
|
2.45 |
% |
|
|
|
|
|
2.46 |
% |
|
|
|
|
|
2.29 |
% |
| Efficiency ratio(4) |
|
|
|
|
62.10 |
% |
|
|
|
|
|
63.21 |
% |
|
|
|
|
|
58.65 |
% |
| Adjusted efficiency
ratio(5) |
|
|
|
|
59.00 |
% |
|
|
|
|
|
58.58 |
% |
|
|
|
|
|
57.04 |
% |
(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 $1.9
million, $1.8 million and $1.5 million for the quarters ended
September 30, 2023, June 30, 2023 and September 30, 2022,
respectively. The tax equivalent yield adjustment to interest
earned on tax exempt securities was $1.1 million for both the
quarters ended September 30, 2023 and June 30, 2023 and $1.3
million for the quarter September 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 |
Nine Months Ended |
| |
Sep 30, 2023 |
|
Sep 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 |
$ |
55,157 |
|
$ |
2,174 |
|
|
5.27 |
% |
|
$ |
94,289 |
|
$ |
2,446 |
|
|
3.47 |
% |
|
Mortgage loans |
|
8,427,034 |
|
|
337,282 |
|
|
5.35 |
% |
|
|
7,581,540 |
|
|
261,021 |
|
|
4.60 |
% |
|
Commercial/agricultural loans |
|
1,763,248 |
|
|
82,658 |
|
|
6.27 |
% |
|
|
1,574,957 |
|
|
52,582 |
|
|
4.46 |
% |
|
SBA PPP loans |
|
5,437 |
|
|
145 |
|
|
3.57 |
% |
|
|
51,890 |
|
|
4,453 |
|
|
11.47 |
% |
|
Consumer and other loans |
|
138,246 |
|
|
6,478 |
|
|
6.26 |
% |
|
|
117,892 |
|
|
5,207 |
|
|
5.91 |
% |
|
Total loans(1) |
|
10,389,122 |
|
|
428,737 |
|
|
5.52 |
% |
|
|
9,420,568 |
|
|
325,709 |
|
|
4.62 |
% |
|
Mortgage-backed securities |
|
2,971,124 |
|
|
55,386 |
|
|
2.49 |
% |
|
|
3,110,769 |
|
|
48,904 |
|
|
2.10 |
% |
|
Other securities |
|
1,220,074 |
|
|
40,155 |
|
|
4.40 |
% |
|
|
1,624,138 |
|
|
32,333 |
|
|
2.66 |
% |
|
Interest-bearing deposits with banks |
|
47,330 |
|
|
1,694 |
|
|
4.79 |
% |
|
|
1,214,076 |
|
|
7,507 |
|
|
0.83 |
% |
|
FHLB stock |
|
18,772 |
|
|
632 |
|
|
4.50 |
% |
|
|
10,579 |
|
|
281 |
|
|
3.55 |
% |
|
Total investment securities |
|
4,257,300 |
|
|
97,867 |
|
|
3.07 |
% |
|
|
5,959,562 |
|
|
89,025 |
|
|
2.00 |
% |
|
Total interest-earning assets |
|
14,646,422 |
|
|
526,604 |
|
|
4.81 |
% |
|
|
15,380,130 |
|
|
414,734 |
|
|
3.61 |
% |
| Non-interest-earning
assets |
|
930,934 |
|
|
|
|
|
|
1,250,719 |
|
|
|
|
|
Total assets |
$ |
15,577,356 |
|
|
|
|
|
$ |
16,630,849 |
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
1,874,518 |
|
|
7,427 |
|
|
0.53 |
% |
|
$ |
1,915,184 |
|
|
991 |
|
|
0.07 |
% |
|
Savings accounts |
|
2,604,089 |
|
|
15,179 |
|
|
0.78 |
% |
|
|
2,826,757 |
|
|
1,187 |
|
|
0.06 |
% |
|
Money market accounts |
|
1,971,514 |
|
|
16,445 |
|
|
1.12 |
% |
|
|
2,400,267 |
|
|
1,806 |
|
|
0.10 |
% |
|
Certificates of deposit |
|
1,118,874 |
|
|
21,733 |
|
|
2.60 |
% |
|
|
782,548 |
|
|
2,517 |
|
|
0.43 |
% |
|
Total interest-bearing deposits |
|
7,568,995 |
|
|
60,784 |
|
|
1.07 |
% |
|
|
7,924,756 |
|
|
6,501 |
|
|
0.11 |
% |
|
Non-interest-bearing deposits |
|
5,571,896 |
|
|
— |
|
|
— |
% |
|
|
6,445,579 |
|
|
— |
|
|
— |
% |
|
Total deposits |
|
13,140,891 |
|
|
60,784 |
|
|
0.62 |
% |
|
|
14,370,335 |
|
|
6,501 |
|
|
0.06 |
% |
| Other interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
FHLB advances |
|
219,461 |
|
|
8,654 |
|
|
5.27 |
% |
|
|
13,919 |
|
|
291 |
|
|
2.80 |
% |
|
Other borrowings |
|
203,932 |
|
|
2,251 |
|
|
1.48 |
% |
|
|
253,545 |
|
|
245 |
|
|
0.13 |
% |
|
Junior subordinated debentures and subordinated notes |
|
186,964 |
|
|
8,549 |
|
|
6.11 |
% |
|
|
190,103 |
|
|
5,866 |
|
|
4.13 |
% |
|
Total borrowings |
|
610,357 |
|
|
19,454 |
|
|
4.26 |
% |
|
|
457,567 |
|
|
6,402 |
|
|
1.87 |
% |
|
Total funding liabilities |
|
13,751,248 |
|
|
80,238 |
|
|
0.78 |
% |
|
|
14,827,902 |
|
|
12,903 |
|
|
0.12 |
% |
| Other non-interest-bearing
liabilities(2) |
|
289,558 |
|
|
|
|
|
|
241,010 |
|
|
|
|
|
Total liabilities |
|
14,040,806 |
|
|
|
|
|
|
15,068,912 |
|
|
|
|
| Shareholders’ equity |
|
1,536,550 |
|
|
|
|
|
|
1,561,937 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
15,577,356 |
|
|
|
|
|
$ |
16,630,849 |
|
|
|
|
| Net interest income/rate
spread (tax equivalent) |
|
|
$ |
446,366 |
|
|
4.03 |
% |
|
|
|
$ |
401,831 |
|
|
3.49 |
% |
| Net interest margin (tax
equivalent) |
|
|
|
|
4.07 |
% |
|
|
|
|
|
3.49 |
% |
| Reconciliation to reported net
interest income: |
|
|
|
|
|
|
|
|
|
|
|
| Adjustments for taxable
equivalent basis |
|
|
|
(8,770 |
) |
|
|
|
|
|
|
(7,723 |
) |
|
|
| Net interest income and
margin, as reported |
|
|
$ |
437,596 |
|
|
3.99 |
% |
|
|
|
$ |
394,108 |
|
|
3.43 |
% |
| Additional Key
Financial Ratios: |
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
|
|
|
1.21 |
% |
|
|
|
|
|
1.13 |
% |
| Return on average equity |
|
|
|
|
12.27 |
% |
|
|
|
|
|
12.07 |
% |
| Average equity/average
assets |
|
|
|
|
9.86 |
% |
|
|
|
|
|
9.39 |
% |
| Average interest-earning
assets/average interest-bearing liabilities |
|
|
|
|
179.07 |
% |
|
|
|
|
|
183.48 |
% |
| Average interest-earning
assets/average funding liabilities |
|
|
|
|
106.51 |
% |
|
|
|
|
|
103.72 |
% |
| Non-interest income/average
assets |
|
|
|
|
0.26 |
% |
|
|
|
|
|
0.50 |
% |
| Non-interest expense/average
assets |
|
|
|
|
2.45 |
% |
|
|
|
|
|
2.24 |
% |
| Efficiency ratio(4) |
|
|
|
|
61.10 |
% |
|
|
|
|
|
60.99 |
% |
| Adjusted efficiency
ratio(5) |
|
|
|
|
57.19 |
% |
|
|
|
|
|
59.39 |
% |
(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 $5.4 million and $4.2 million for
the years ended September 30, 2023 and September 30,
2022, respectively. The tax equivalent yield adjustment to
interest earned on tax exempt securities was $3.4 million and $3.5
million for the years ended September 30, 2023 and
September 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, “Additional Financial Information - Non-GAAP Financial
Measures” on the final two pages of this press release for a
discussion and reconciliation of non-GAAP financial measures.
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| * Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
|
In addition to results presented in accordance with generally
accepted accounting principles in the United States of America
(GAAP), this press release contains certain non-GAAP financial
measures. Tangible common shareholders’ equity per share and
the ratio of tangible common equity to tangible assets, and
references to adjusted revenue, adjusted earnings and the adjusted
efficiency ratio 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 |
|
Nine Months Ended |
| |
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
|
Sep 30, 2023 |
|
Sep 30, 2022 |
|
Net interest income (GAAP) |
$ |
141,766 |
|
$ |
142,518 |
|
$ |
146,443 |
|
|
$ |
437,596 |
|
$ |
394,108 |
|
| Non-interest income
(GAAP) |
|
12,658 |
|
|
8,422 |
|
|
15,585 |
|
|
|
30,357 |
|
|
62,185 |
|
| Total revenue (GAAP) |
|
154,424 |
|
|
150,940 |
|
|
162,028 |
|
|
|
467,953 |
|
|
456,293 |
|
|
Exclude: Net loss (gain) on sale of securities |
|
2,657 |
|
|
4,527 |
|
|
(6 |
) |
|
|
14,436 |
|
|
(473 |
) |
|
Net change in valuation of financial instruments carried at fair
value |
|
654 |
|
|
3,151 |
|
|
(532 |
) |
|
|
4,357 |
|
|
(650 |
) |
|
Gain on sale of branches |
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
(7,804 |
) |
| Adjusted revenue
(non-GAAP) |
$ |
157,735 |
|
$ |
158,618 |
|
$ |
161,490 |
|
|
$ |
486,746 |
|
$ |
447,366 |
|
| ADJUSTED
EARNINGS |
Quarters Ended |
|
Nine Months Ended |
| |
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
|
Sep 30, 2023 |
|
Sep 30, 2022 |
|
Net income (GAAP) |
$ |
45,854 |
|
|
$ |
39,591 |
|
|
$ |
49,070 |
|
|
$ |
141,000 |
|
|
$ |
140,998 |
|
|
Exclude: Net loss (gain) on sale of securities |
|
2,657 |
|
|
|
4,527 |
|
|
|
(6 |
) |
|
|
14,436 |
|
|
|
(473 |
) |
|
Net change in valuation of financial instruments carried at fair
value |
|
654 |
|
|
|
3,151 |
|
|
|
(532 |
) |
|
|
4,357 |
|
|
|
(650 |
) |
|
Gain on sale of branches |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,804 |
) |
|
Banner Forward expenses(1) |
|
996 |
|
|
|
195 |
|
|
|
411 |
|
|
|
1,334 |
|
|
|
4,455 |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
793 |
|
|
Related net tax (benefit) expense |
|
(1,033 |
) |
|
|
(1,890 |
) |
|
|
31 |
|
|
|
(4,830 |
) |
|
|
883 |
|
| Total adjusted earnings
(non-GAAP) |
$ |
49,128 |
|
|
$ |
45,574 |
|
|
$ |
48,974 |
|
|
$ |
156,297 |
|
|
$ |
138,202 |
|
| |
|
|
|
|
|
|
|
|
|
| Diluted earnings per share
(GAAP) |
$ |
1.33 |
|
|
$ |
1.15 |
|
|
$ |
1.43 |
|
|
$ |
4.09 |
|
|
$ |
4.09 |
|
| Diluted adjusted earnings per
share (non-GAAP) |
$ |
1.43 |
|
|
$ |
1.32 |
|
|
$ |
1.42 |
|
|
$ |
4.54 |
|
|
$ |
4.01 |
|
(1) Included in miscellaneous
expenses in results of operations.
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
| ADJUSTED EFFICIENCY
RATIO |
|
Quarters Ended |
|
Nine Months Ended |
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Sep 30, 2022 |
|
Sep 30, 2023 |
|
Sep 30, 2022 |
|
Non-interest expense (GAAP) |
|
$ |
95,891 |
|
|
$ |
95,405 |
|
|
$ |
95,034 |
|
|
$ |
285,917 |
|
|
$ |
278,282 |
|
|
Exclude: Banner Forward expenses(1) |
|
|
(996 |
) |
|
|
(195 |
) |
|
|
(411 |
) |
|
|
(1,334 |
) |
|
|
(4,455 |
) |
|
CDI amortization |
|
|
(857 |
) |
|
|
(991 |
) |
|
|
(1,215 |
) |
|
|
(2,898 |
) |
|
|
(4,064 |
) |
|
State/municipal tax expense |
|
|
(1,359 |
) |
|
|
(1,229 |
) |
|
|
(1,223 |
) |
|
|
(3,888 |
) |
|
|
(3,389 |
) |
|
REO operations |
|
|
383 |
|
|
|
(75 |
) |
|
|
(68 |
) |
|
|
585 |
|
|
|
132 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(793 |
) |
| Adjusted non-interest expense
(non-GAAP) |
|
$ |
93,062 |
|
|
$ |
92,915 |
|
|
$ |
92,117 |
|
|
$ |
278,382 |
|
|
$ |
265,713 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net interest income
(GAAP) |
|
$ |
141,766 |
|
|
$ |
142,518 |
|
|
$ |
146,443 |
|
|
$ |
437,596 |
|
|
$ |
394,108 |
|
| Non-interest income
(GAAP) |
|
|
12,658 |
|
|
|
8,422 |
|
|
|
15,585 |
|
|
|
30,357 |
|
|
|
62,185 |
|
| Total revenue (GAAP) |
|
|
154,424 |
|
|
|
150,940 |
|
|
|
162,028 |
|
|
|
467,953 |
|
|
|
456,293 |
|
|
Exclude: Net loss (gain) on sale of securities |
|
|
2,657 |
|
|
|
4,527 |
|
|
|
(6 |
) |
|
|
14,436 |
|
|
|
(473 |
) |
|
Net change in valuation of financial instruments carried at fair
value |
|
|
654 |
|
|
|
3,151 |
|
|
|
(532 |
) |
|
|
4,357 |
|
|
|
(650 |
) |
|
Gain on sale of branches |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,804 |
) |
| Adjusted revenue
(non-GAAP) |
|
$ |
157,735 |
|
|
$ |
158,618 |
|
|
$ |
161,490 |
|
|
$ |
486,746 |
|
|
$ |
447,366 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio (GAAP) |
|
|
62.10 |
% |
|
|
63.21 |
% |
|
|
58.65 |
% |
|
|
61.10 |
% |
|
|
60.99 |
% |
| Adjusted efficiency ratio
(non-GAAP) |
|
|
59.00 |
% |
|
|
58.58 |
% |
|
|
57.04 |
% |
|
|
57.19 |
% |
|
|
59.39 |
% |
(1) Included in
miscellaneous expenses in results of operations.
| TANGIBLE COMMON
SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS |
|
|
|
|
|
|
|
|
| |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Dec 31, 2022 |
|
Sep 30, 2022 |
|
Shareholders’ equity (GAAP) |
|
$ |
1,520,607 |
|
|
$ |
1,542,513 |
|
|
$ |
1,456,432 |
|
|
$ |
1,408,659 |
|
|
Exclude goodwill and other intangible assets, net |
|
|
379,663 |
|
|
|
380,520 |
|
|
|
382,561 |
|
|
|
383,776 |
|
| Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,140,944 |
|
|
$ |
1,161,993 |
|
|
$ |
1,073,871 |
|
|
$ |
1,024,883 |
|
| |
|
|
|
|
|
|
|
|
| Total assets (GAAP) |
|
$ |
15,507,880 |
|
|
$ |
15,584,736 |
|
|
$ |
15,833,431 |
|
|
$ |
16,360,809 |
|
|
Exclude goodwill and other intangible assets, net |
|
|
379,663 |
|
|
|
380,520 |
|
|
|
382,561 |
|
|
|
383,776 |
|
| Total tangible assets
(non-GAAP) |
|
$ |
15,128,217 |
|
|
$ |
15,204,216 |
|
|
$ |
15,450,870 |
|
|
$ |
15,977,033 |
|
| Common shareholders’ equity to
total assets (GAAP) |
|
|
9.81 |
% |
|
|
9.90 |
% |
|
|
9.20 |
% |
|
|
8.61 |
% |
| Tangible common shareholders’
equity to tangible assets (non-GAAP) |
|
|
7.54 |
% |
|
|
7.64 |
% |
|
|
6.95 |
% |
|
|
6.41 |
% |
| |
|
|
|
|
|
|
|
|
| TANGIBLE COMMON
SHAREHOLDERS’ EQUITY PER SHARE |
|
|
|
|
|
|
|
|
| Tangible common shareholders’
equity (non-GAAP) |
|
$ |
1,140,944 |
|
|
$ |
1,161,993 |
|
|
$ |
1,073,871 |
|
|
$ |
1,024,883 |
|
| Common shares outstanding at
end of period |
|
|
34,345,949 |
|
|
|
34,344,627 |
|
|
|
34,194,018 |
|
|
|
34,191,759 |
|
| Common shareholders’ equity
(book value) per share (GAAP) |
|
$ |
44.27 |
|
|
$ |
44.91 |
|
|
$ |
42.59 |
|
|
$ |
41.20 |
|
| Tangible common shareholders’
equity (tangible book value) per share (non-GAAP) |
|
$ |
33.22 |
|
|
$ |
33.83 |
|
|
$ |
31.41 |
|
|
$ |
29.97 |
|
|
CONTACT: |
MARK J. GRESCOVICH, |
| |
PRESIDENT & CEO |
| |
ROBERT G. BUTTERFIELD,
CFO |
| |
(509) 527-3636 |
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