Banner announced that its Board of Directors increased its regular quarterly cash dividend by 9% to
“Banner’s 2022 operating results reflect the continued successful execution of our super community bank strategy, and the benefits of implementing Banner Forward initiatives,” said
“During the fourth quarter of 2022, we published our inaugural Environmental, Social and Governance Highlights Report,” said Grescovich. “This report identifies ongoing practices and recent accomplishments in the areas of environmental risk and impact management, social responsibility (including diversity, equity and inclusion) and governance. While we’ve been engaged in ESG activities and practices for a very long time, creating this report makes it easier to share more examples and greater detail with interested stakeholders in a single, dedicated document.” The report can be found on our website, bannerbank.com/esg.
“Banner Forward, our bank-wide initiative to enhance revenue growth and reduce operating expense, is having a meaningful impact on earnings,” said Grescovich. “Beginning during the third quarter of 2021, Banner Forward is focused on accelerating growth in commercial banking, deepening relationships with retail clients, and advancing technology strategies to enhance our digital service channels, while streamlining underwriting and back office processes. The implementation of the revenue initiatives benefited the second half of 2022 and are expected to continue ramping up in 2023. The efficiency-related initiatives associated with Banner Forward have largely been completed. During the fourth quarter of 2022, we incurred expenses of
At
Fourth Quarter 2022 Highlights
- Revenues increased 6% to
$172.1 million , compared to$162.0 million in the preceding quarter, and increased 18% compared to$146.0 million in the fourth quarter a year ago. - Net interest income increased 9% to
$159.1 million in the fourth quarter of 2022, compared to$146.4 million in the preceding quarter and increased 31%, compared to$121.5 million in the fourth quarter a year ago. - Net interest margin, on a tax equivalent basis, was 4.23%, compared to 3.85% in the preceding quarter and 3.17% in the fourth quarter a year ago.
- Mortgage banking revenues increased to
$2.3 million , compared to$105,000 in the preceding quarter, and decreased 59% compared to$5.6 million in the fourth quarter a year ago. - Return on average assets was 1.34%, compared to 1.18% in both the preceding quarter and fourth quarter a year ago.
- Net loans receivable increased 3% to
$10.01 billion atDecember 31, 2022 , compared to$9.69 billion atSeptember 30, 2022 , and increased 12% compared to$8.95 billion atDecember 31, 2021 . - Non-performing assets increased to
$23.4 million , or 0.15% of total assets, atDecember 31, 2022 , compared to$15.6 million , or 0.10% of total assets atSeptember 30, 2022 , and decreased slightly compared to$23.7 million , or 0.14% of total assets, atDecember 31, 2021 . - The allowance for credit losses - loans was
$141.5 million , or 1.39% of total loans receivable, as ofDecember 31, 2022 , compared to$135.9 million , or 1.38% of total loans receivable as ofSeptember 30, 2022 and$132.1 million , or 1.45% of total loans receivable as ofDecember 31, 2021 . - Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) decreased to
$12.90 billion atDecember 31, 2022 , compared to$13.51 billion atSeptember 30, 2022 , and$13.49 billion a year ago. Core deposits represented 95% of total deposits atDecember 31, 2022 . - Dividends paid to shareholders were
$0.44 per share in the quarter endedDecember 31, 2022 . - Common shareholders’ equity per share increased 3% to
$42.59 atDecember 31, 2022 , compared to$41.20 at the preceding quarter end, and decreased 14% from$49.35 a year ago. - Tangible common shareholders’ equity per share* increased 5% to
$31.41 atDecember 31, 2022 , compared to$29.97 at the preceding quarter end, and decreased 17% from$38.02 a year ago.
*Non-GAAP (Generally Accepted Accounting Principles) measure; see the discussion and reconciliation of Non-GAAP Financial Measures beginning on page 16.
Income Statement Review
Net interest income was
Average yields on interest-earning assets increased 43 basis points to 4.40% for the fourth quarter of 2022, compared to 3.97% for the preceding quarter and increased 111 basis points compared to 3.29% in the fourth quarter a year ago. Since
Banner recorded a
Total non-interest income was
Mortgage banking revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, were
Fourth quarter 2022 non-interest income also included a
Total revenue increased 6% to
Total non-interest expense was
Federal and state income tax expense totaled
* Non-GAAP measure; see the discussion and reconciliation of Non-GAAP Financial Measures beginning on page 16.
Balance Sheet Review
Total assets decreased 3% to
Total loans receivable increased to
Loans held for sale were
Total deposits decreased to
At
* Non-GAAP measure; see the discussion and reconciliation of Non-GAAP Financial Measures beginning on page 16.
Credit Quality
The allowance for credit losses - loans was
Banner’s total substandard loans were
Banner’s total non-performing assets were
Conference Call
Banner will host a conference call on
About the Company
Forward-Looking Statements
When used in this press release and in other documents filed with or furnished to the
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
RESULTS OF OPERATIONS | Quarters Ended | Years Ended | |||||||||||||||||
(in thousands except shares and per share data) | |||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||
Loans receivable | $ | 129,450 | $ | 116,610 | $ | 104,929 | $ | 450,916 | $ | 445,731 | |||||||||
Mortgage-backed securities | 19,099 | 17,558 | 13,220 | 67,585 | 45,723 | ||||||||||||||
Securities and cash equivalents | 17,009 | 16,951 | 8,397 | 54,068 | 29,046 | ||||||||||||||
165,558 | 151,119 | 126,546 | 572,569 | 520,500 | |||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||
Deposits | 3,623 | 2,407 | 2,384 | 10,124 | 11,770 | ||||||||||||||
198 | — | 348 | 489 | 2,592 | |||||||||||||||
Other borrowings | 132 | 81 | 109 | 377 | 467 | ||||||||||||||
Subordinated debt | 2,534 | 2,188 | 2,175 | 8,400 | 8,780 | ||||||||||||||
6,487 | 4,676 | 5,016 | 19,390 | 23,609 | |||||||||||||||
Net interest income | 159,071 | 146,443 | 121,530 | 553,179 | 496,891 | ||||||||||||||
PROVISION (RECAPTURE) FOR CREDIT LOSSES | 6,704 | 6,087 | (5,243 | ) | 10,364 | (33,388 | ) | ||||||||||||
Net interest income after provision (recapture) for credit losses | 152,367 | 140,356 | 126,773 | 542,815 | 530,279 | ||||||||||||||
NON-INTEREST INCOME: | |||||||||||||||||||
Deposit fees and other service charges | 10,821 | 11,449 | 10,341 | 44,459 | 39,495 | ||||||||||||||
Mortgage banking operations | 2,311 | 105 | 5,643 | 10,834 | 33,948 | ||||||||||||||
Bank-owned life insurance | 2,120 | 1,804 | 1,203 | 7,794 | 5,000 | ||||||||||||||
Miscellaneous | 1,382 | 1,689 | 4,702 | 6,805 | 12,875 | ||||||||||||||
16,634 | 15,047 | 21,889 | 69,892 | 91,318 | |||||||||||||||
Net (loss) gain on sale of securities | (3,721 | ) | 6 | (136 | ) | (3,248 | ) | 482 | |||||||||||
Net change in valuation of financial instruments carried at fair value | 157 | 532 | 2,721 | 807 | 4,616 | ||||||||||||||
Gain on sale of branches, including related deposits | — | — | — | 7,804 | — | ||||||||||||||
Total non-interest income | 13,070 | 15,585 | 24,474 | 75,255 | 96,416 | ||||||||||||||
NON-INTEREST EXPENSE: | |||||||||||||||||||
Salary and employee benefits | 60,309 | 61,639 | 57,798 | 242,266 | 244,351 | ||||||||||||||
Less capitalized loan origination costs | (4,877 | ) | (5,984 | ) | (7,647 | ) | (24,313 | ) | (34,401 | ) | |||||||||
Occupancy and equipment | 13,506 | 12,008 | 13,885 | 52,018 | 52,850 | ||||||||||||||
Information and computer data services | 6,535 | 6,803 | 6,441 | 25,986 | 24,356 | ||||||||||||||
Payment and card processing services | 5,109 | 5,508 | 5,062 | 21,195 | 20,544 | ||||||||||||||
Professional and legal expenses | 6,328 | 2,619 | 2,251 | 14,005 | 22,274 | ||||||||||||||
Advertising and marketing | 1,350 | 1,326 | 2,071 | 3,959 | 6,036 | ||||||||||||||
Deposit insurance | 1,739 | 1,946 | 1,340 | 6,649 | 5,583 | ||||||||||||||
State and municipal business and use taxes | 1,304 | 1,223 | 976 | 4,693 | 4,343 | ||||||||||||||
Real estate operations, net | 28 | 68 | 49 | (104 | ) | (22 | ) | ||||||||||||
Amortization of core deposit intangibles | 1,215 | 1,215 | 1,574 | 5,279 | 6,571 | ||||||||||||||
Loss on extinguishment of debt | — | — | 2,284 | 793 | 2,284 | ||||||||||||||
Miscellaneous | 6,467 | 6,663 | 5,594 | 24,869 | 24,236 | ||||||||||||||
99,013 | 95,034 | 91,678 | 377,295 | 379,005 | |||||||||||||||
COVID-19 expenses | — | — | 127 | — | 436 | ||||||||||||||
Merger and acquisition-related expenses | — | — | — | — | 660 | ||||||||||||||
Total non-interest expense | 99,013 | 95,034 | 91,805 | 377,295 | 380,101 | ||||||||||||||
Income before provision for income taxes | 66,424 | 60,907 | 59,442 | 240,775 | 246,594 | ||||||||||||||
PROVISION FOR INCOME TAXES | 12,044 | 11,837 | 9,515 | 45,397 | 45,546 | ||||||||||||||
NET INCOME | $ | 54,380 | $ | 49,070 | $ | 49,927 | $ | 195,378 | $ | 201,048 | |||||||||
Earnings per common share: | |||||||||||||||||||
Basic | $ | 1.59 | $ | 1.43 | $ | 1.46 | $ | 5.70 | $ | 5.81 | |||||||||
Diluted | $ | 1.58 | $ | 1.43 | $ | 1.44 | $ | 5.67 | $ | 5.76 | |||||||||
Cumulative dividends declared per common share | $ | 0.44 | $ | 0.44 | $ | 0.41 | $ | 1.76 | $ | 1.64 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||
Basic | 34,226,162 | 34,224,640 | 34,292,967 | 34,264,322 | 34,610,056 | ||||||||||||||
Diluted | 34,437,151 | 34,416,017 | 34,575,607 | 34,459,922 | 34,919,188 | ||||||||||||||
Increase (decrease) in common shares outstanding | 2,259 | 429 | 641 | (58,614 | ) | (906,568 | ) |
FINANCIAL CONDITION | Percentage Change | ||||||||||||||||
(in thousands except shares and per share data) | Prior Qtr | Prior Yr Qtr | |||||||||||||||
ASSETS | |||||||||||||||||
Cash and due from banks | $ | 198,154 | $ | 273,052 | $ | 358,461 | (27.4 | )% | (44.7 | )% | |||||||
Interest-bearing deposits | 44,908 | 548,869 | 1,775,839 | (91.8 | )% | (97.5 | )% | ||||||||||
Total cash and cash equivalents | 243,062 | 821,921 | 2,134,300 | (70.4 | )% | (88.6 | )% | ||||||||||
Securities - trading | 28,694 | 28,383 | 26,981 | 1.1 | % | 6.3 | % | ||||||||||
Securities - available for sale | 2,789,031 | 2,996,173 | 3,638,993 | (6.9 | )% | (23.4 | )% | ||||||||||
Securities - held to maturity | 1,117,588 | 1,132,852 | 520,922 | (1.3 | )% | 114.5 | % | ||||||||||
Total securities | 3,935,313 | 4,157,408 | 4,186,896 | (5.3 | )% | (6.0 | )% | ||||||||||
12,000 | 10,000 | 12,000 | 20.0 | % | — | % | |||||||||||
Securities purchased under agreements to resell | 300,000 | 300,000 | 300,000 | — | % | — | % | ||||||||||
Loans held for sale | 56,857 | 84,358 | 96,487 | (32.6 | )% | (41.1 | )% | ||||||||||
Loans receivable | 10,146,724 | 9,827,096 | 9,084,763 | 3.3 | % | 11.7 | % | ||||||||||
Allowance for credit losses – loans | (141,465 | ) | (135,918 | ) | (132,099 | ) | 4.1 | % | 7.1 | % | |||||||
Net loans receivable | 10,005,259 | 9,691,178 | 8,952,664 | 3.2 | % | 11.8 | % | ||||||||||
Accrued interest receivable | 57,284 | 50,689 | 42,916 | 13.0 | % | 33.5 | % | ||||||||||
Real estate owned (REO) held for sale, net | 340 | 340 | 852 | — | % | (60.1 | )% | ||||||||||
Property and equipment, net | 138,754 | 141,280 | 148,759 | (1.8 | )% | (6.7 | )% | ||||||||||
373,121 | 373,121 | 373,121 | — | % | — | % | |||||||||||
Other intangibles, net | 9,440 | 10,655 | 14,855 | (11.4 | )% | (36.5 | )% | ||||||||||
Bank-owned life insurance | 297,565 | 295,443 | 244,156 | 0.7 | % | 21.9 | % | ||||||||||
Operating lease right-of-use assets | 49,283 | 51,908 | 55,257 | (5.1 | )% | (10.8 | )% | ||||||||||
Other assets | 355,153 | 372,508 | 242,609 | (4.7 | )% | 46.4 | % | ||||||||||
Total assets | $ | 15,833,431 | $ | 16,360,809 | $ | 16,804,872 | (3.2 | )% | (5.8 | )% | |||||||
LIABILITIES | |||||||||||||||||
Deposits: | |||||||||||||||||
Non-interest-bearing | $ | 6,176,998 | $ | 6,507,523 | $ | 6,385,177 | (5.1 | )% | (3.3 | )% | |||||||
Interest-bearing transaction and savings accounts | 6,719,531 | 7,004,799 | 7,103,125 | (4.1 | )% | (5.4 | )% | ||||||||||
Interest-bearing certificates | 723,530 | 721,944 | 838,631 | 0.2 | % | (13.7 | )% | ||||||||||
Total deposits | 13,620,059 | 14,234,266 | 14,326,933 | (4.3 | )% | (4.9 | )% | ||||||||||
Advances from FHLB | 50,000 | — | 50,000 | — | % | — | % | ||||||||||
Other borrowings | 232,799 | 234,006 | 264,490 | (0.5 | )% | (12.0 | )% | ||||||||||
Subordinated notes, net | 98,947 | 98,849 | 98,564 | 0.1 | % | 0.4 | % | ||||||||||
Junior subordinated debentures at fair value | 74,857 | 73,841 | 119,815 | 1.4 | % | (37.5 | )% | ||||||||||
Operating lease liabilities | 55,205 | 58,031 | 59,756 | (4.9 | )% | (7.6 | )% | ||||||||||
Accrued expenses and other liabilities | 200,839 | 209,226 | 148,303 | (4.0 | )% | 35.4 | % | ||||||||||
Deferred compensation | 44,293 | 43,931 | 46,684 | 0.8 | % | (5.1 | )% | ||||||||||
Total liabilities | 14,376,999 | 14,952,150 | 15,114,545 | (3.8 | )% | (4.9 | )% | ||||||||||
SHAREHOLDERS’ EQUITY | |||||||||||||||||
Common stock | 1,293,959 | 1,291,741 | 1,299,381 | 0.2 | % | (0.4 | )% | ||||||||||
Retained earnings | 525,242 | 486,108 | 390,762 | 8.1 | % | 34.4 | % | ||||||||||
Accumulated other comprehensive (loss) income | (362,769 | ) | (369,190 | ) | 184 | (1.7 | )% | nm | |||||||||
Total shareholders’ equity | 1,456,432 | 1,408,659 | 1,690,327 | 3.4 | % | (13.8 | )% | ||||||||||
Total liabilities and shareholders’ equity | $ | 15,833,431 | $ | 16,360,809 | $ | 16,804,872 | (3.2 | )% | (5.8 | )% | |||||||
Common Shares Issued: | |||||||||||||||||
Shares outstanding at end of period | 34,194,018 | 34,191,759 | 34,252,632 | ||||||||||||||
Common shareholders’ equity per share (1) | $ | 42.59 | $ | 41.20 | $ | 49.35 | |||||||||||
Common shareholders’ tangible equity per share (1) (2) | $ | 31.41 | $ | 29.97 | $ | 38.02 | |||||||||||
Common shareholders’ tangible equity to tangible assets (2) | 6.95 | % | 6.41 | % | 7.93 | % | |||||||||||
Consolidated Tier 1 leverage capital ratio | 9.45 | % | 9.06 | % | 8.76 | % |
(1 | ) | Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding. |
(2 | ) | Common shareholders’ tangible equity excludes goodwill and other intangible assets. Tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial measures. See also Non-GAAP Financial Measures reconciliation tables on the final two pages of the press release tables. |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||
(dollars in thousands) | |||||||||||||||||
Percentage Change | |||||||||||||||||
LOANS (1) | Prior Qtr | Prior Yr Qtr | |||||||||||||||
Commercial real estate (CRE): | |||||||||||||||||
Owner-occupied | $ | 845,320 | $ | 862,792 | $ | 831,623 | (2.0 | )% | 1.6 | % | |||||||
Investment properties | 1,589,975 | 1,604,881 | 1,674,027 | (0.9 | )% | (5.0 | )% | ||||||||||
Small balance CRE | 1,200,251 | 1,188,351 | 1,281,863 | 1.0 | % | (6.4 | )% | ||||||||||
Multifamily real estate | 645,071 | 592,834 | 530,885 | 8.8 | % | 21.5 | % | ||||||||||
Construction, land and land development: | |||||||||||||||||
Commercial construction | 184,876 | 171,029 | 167,998 | 8.1 | % | 10.0 | % | ||||||||||
Multifamily construction | 325,816 | 275,488 | 259,116 | 18.3 | % | 25.7 | % | ||||||||||
One- to four-family construction | 647,329 | 666,350 | 568,753 | (2.9 | )% | 13.8 | % | ||||||||||
Land and land development | 328,475 | 329,459 | 313,454 | (0.3 | )% | 4.8 | % | ||||||||||
Commercial business: | |||||||||||||||||
Commercial business | 1,275,813 | 1,229,490 | 1,038,206 | 3.8 | % | 22.9 | % | ||||||||||
SBA PPP | 7,594 | 13,060 | 132,574 | (41.9 | )% | (94.3 | )% | ||||||||||
Small business scored | 947,092 | 906,647 | 792,310 | 4.5 | % | 19.5 | % | ||||||||||
Agricultural business, including secured by farmland: | |||||||||||||||||
Agricultural business, including secured by farmland | 294,743 | 299,056 | 279,224 | (1.4 | )% | 5.6 | % | ||||||||||
SBA PPP | 334 | 344 | 1,354 | (2.9 | )% | (75.3 | )% | ||||||||||
One- to four-family residential | 1,173,112 | 1,025,143 | 657,474 | 14.4 | % | 78.4 | % | ||||||||||
Consumer: | |||||||||||||||||
Consumer—home equity revolving lines of credit | 566,291 | 545,807 | 458,533 | 3.8 | % | 23.5 | % | ||||||||||
Consumer—other | 114,632 | 116,365 | 97,369 | (1.5 | )% | 17.7 | % | ||||||||||
Total loans receivable | $ | 10,146,724 | $ | 9,827,096 | $ | 9,084,763 | 3.3 | % | 11.7 | % | |||||||
Restructured loans performing under their restructured terms | $ | 4,241 | $ | 4,352 | $ | 5,309 | |||||||||||
Loans 30 - 89 days past due and on accrual | $ | 17,186 | $ | 15,208 | $ | 11,558 | |||||||||||
Total delinquent loans (including loans on non-accrual), net | $ | 32,371 | $ | 21,728 | $ | 18,688 | |||||||||||
Total delinquent loans / Total loans receivable | 0.32 | % | 0.22 | % | 0.21 | % |
(1)
LOANS BY GEOGRAPHIC LOCATION | Percentage Change | ||||||||||||||||
Prior Qtr | Prior Yr Qtr | ||||||||||||||||
Amount | Percentage | Amount | Amount | ||||||||||||||
$ | 4,777,546 | 47.1 | % | $ | 4,648,124 | $ | 4,264,590 | 2.8 | % | 12.0 | % | ||||||
2,484,980 | 24.5 | % | 2,323,740 | 2,138,340 | 6.9 | % | 16.2 | % | |||||||||
1,826,743 | 18.0 | % | 1,765,254 | 1,652,364 | 3.5 | % | 10.6 | % | |||||||||
565,586 | 5.6 | % | 588,498 | 525,141 | (3.9 | )% | 7.7 | % | |||||||||
75,967 | 0.7 | % | 95,250 | 74,913 | (20.2 | )% | 1.4 | % | |||||||||
Other | 415,902 | 4.1 | % | 406,230 | 429,415 | 2.4 | % | (3.1 | )% | ||||||||
Total loans receivable | $ | 10,146,724 | 100.0 | % | $ | 9,827,096 | $ | 9,084,763 | 3.3 | % | 11.7 | % |
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
LOAN ORIGINATIONS | Quarters Ended | Years Ended | ||||||||||||
Commercial real estate | $ | 117,787 | $ | 92,062 | $ | 196,350 | $ | 418,635 | $ | 565,809 | ||||
Multifamily real estate | 8,881 | 4,603 | 25,933 | 37,612 | 110,640 | |||||||||
Construction and land | 301,804 | 444,365 | 522,081 | 1,935,476 | 1,975,664 | |||||||||
Commercial business: | ||||||||||||||
Commercial business | 298,396 | 218,044 | 203,549 | 1,034,950 | 731,315 | |||||||||
SBA PPP | — | — | — | — | 485,077 | |||||||||
Agricultural business | 24,314 | 9,879 | 13,061 | 89,655 | 61,997 | |||||||||
One-to four-family residential | 83,491 | 92,701 | 52,251 | 358,976 | 206,662 | |||||||||
Consumer | 102,502 | 126,940 | 101,365 | 545,254 | 465,213 | |||||||||
Total loan originations (excluding loans held for sale) | $ | 937,175 | $ | 988,594 | $ | 1,114,590 | $ | 4,420,558 | $ | 4,602,377 |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Quarters Ended | Years Ended | ||||||||||||||||||
CHANGE IN THE | |||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES – LOANS | |||||||||||||||||||
Balance, beginning of period | $ | 135,918 | $ | 128,702 | $ | 139,915 | $ | 132,099 | $ | 167,279 | |||||||||
Provision (recapture) for credit losses – loans | 6,043 | 6,347 | (8,127 | ) | 8,158 | (33,112 | ) | ||||||||||||
Recoveries of loans previously charged off: | |||||||||||||||||||
Commercial real estate | 88 | 88 | 635 | 392 | 1,729 | ||||||||||||||
Construction and land | — | — | — | 384 | 100 | ||||||||||||||
One- to four-family real estate | 18 | 25 | 47 | 181 | 199 | ||||||||||||||
Commercial business | 616 | 924 | 267 | 1,923 | 1,797 | ||||||||||||||
Agricultural business, including secured by farmland | 91 | 252 | 5 | 475 | 30 | ||||||||||||||
Consumer | 153 | 85 | 140 | 566 | 760 | ||||||||||||||
966 | 1,374 | 1,094 | 3,921 | 4,615 | |||||||||||||||
Loans charged off: | |||||||||||||||||||
Commercial real estate | — | — | (1 | ) | (2 | ) | (3,767 | ) | |||||||||||
Multifamily real estate | — | — | (59 | ) | — | (59 | ) | ||||||||||||
Construction and land | — | (25 | ) | — | (30 | ) | — | ||||||||||||
Commercial business | (1,231 | ) | (138 | ) | (488 | ) | (1,699 | ) | (1,762 | ) | |||||||||
Agricultural business, including secured by farmland | — | (42 | ) | — | (42 | ) | (181 | ) | |||||||||||
Consumer | (231 | ) | (300 | ) | (235 | ) | (940 | ) | (914 | ) | |||||||||
(1,462 | ) | (505 | ) | (783 | ) | (2,713 | ) | (6,683 | ) | ||||||||||
Net (charge-offs) recoveries | (496 | ) | 869 | 311 | 1,208 | (2,068 | ) | ||||||||||||
Balance, end of period | $ | 141,465 | $ | 135,918 | $ | 132,099 | $ | 141,465 | $ | 132,099 | |||||||||
Net (charge-offs) recoveries / Average loans receivable | (0.005 | )% | 0.009 | % | 0.003 | % | 0.013 | % | (0.021 | )% |
ALLOCATION OF | |||||||||||
ALLOWANCE FOR CREDIT LOSSES – LOANS | |||||||||||
Specific or allocated credit loss allowance: | |||||||||||
Commercial real estate | $ | 44,086 | $ | 44,365 | $ | 52,995 | |||||
Multifamily real estate | 7,734 | 7,114 | 7,043 | ||||||||
Construction and land | 29,171 | 27,985 | 27,294 | ||||||||
One- to four-family real estate | 14,729 | 12,394 | 8,205 | ||||||||
Commercial business | 33,299 | 31,854 | 26,421 | ||||||||
Agricultural business, including secured by farmland | 3,475 | 3,455 | 3,190 | ||||||||
Consumer | 8,971 | 8,751 | 6,951 | ||||||||
Total allowance for credit losses – loans | $ | 141,465 | $ | 135,918 | $ | 132,099 | |||||
Allowance for credit losses - loans / Total loans receivable | 1.39 | % | 1.38 | % | 1.45 | % | |||||
Allowance for credit losses - loans / Non-performing loans | 615 | % | 895 | % | 578 | % |
Quarters Ended | Years Ended | |||||||||||||||
CHANGE IN THE | ||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS | ||||||||||||||||
Balance, beginning of period | $ | 14,041 | $ | 14,246 | $ | 10,127 | $ | 12,432 | $ | 13,297 | ||||||
Provision/(recapture) for credit losses - unfunded loan commitments | 680 | (205 | ) | 2,305 | 2,289 | (865 | ) | |||||||||
Balance, end of period | $ | 14,721 | $ | 14,041 | $ | 12,432 | $ | 14,721 | $ | 12,432 |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||
(dollars in thousands) | |||||||||||
NON-PERFORMING ASSETS | |||||||||||
Loans on non-accrual status: | |||||||||||
Secured by real estate: | |||||||||||
Commercial | $ | 3,683 | $ | 6,997 | $ | 14,159 | |||||
Construction and land | 181 | 299 | 479 | ||||||||
One- to four-family | 5,236 | 2,381 | 2,711 | ||||||||
Commercial business | 9,886 | 1,462 | 2,156 | ||||||||
Agricultural business, including secured by farmland | 594 | 594 | 1,022 | ||||||||
Consumer | 2,126 | 1,779 | 1,754 | ||||||||
21,706 | 13,512 | 22,281 | |||||||||
Loans more than 90 days delinquent, still on accrual: | |||||||||||
Secured by real estate: | |||||||||||
One- to four-family | 1,023 | 1,556 | 436 | ||||||||
Commercial business | — | 64 | 2 | ||||||||
Consumer | 264 | 61 | 117 | ||||||||
1,287 | 1,681 | 555 | |||||||||
Total non-performing loans | 22,993 | 15,193 | 22,836 | ||||||||
REO | 340 | 340 | 852 | ||||||||
Other repossessed assets | 17 | 17 | 17 | ||||||||
Total non-performing assets | $ | 23,350 | $ | 15,550 | $ | 23,705 | |||||
Total non-performing assets to total assets | 0.15 | % | 0.10 | % | 0.14 | % |
LOANS BY CREDIT RISK RATING | ||||||||
Pass | $ | 10,000,493 | $ | 9,672,473 | $ | 8,874,468 | ||
Special Mention | 9,081 | 18,251 | 11,932 | |||||
Substandard | 137,150 | 136,372 | 198,363 | |||||
Total | $ | 10,146,724 | $ | 9,827,096 | $ | 9,084,763 |
Quarters Ended | Years Ended | |||||||||||||||
REAL ESTATE OWNED | ||||||||||||||||
Balance, beginning of period | $ | 340 | $ | 340 | $ | 852 | $ | 852 | $ | 816 | ||||||
Additions from loan foreclosures | — | — | — | — | 512 | |||||||||||
Proceeds from dispositions of REO | — | — | — | (864 | ) | (783 | ) | |||||||||
Gain on sale of REO | — | — | — | 352 | 307 | |||||||||||
Balance, end of period | $ | 340 | $ | 340 | $ | 852 | $ | 340 | $ | 852 |
ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||
(dollars in thousands) | ||||||||||||||
DEPOSIT COMPOSITION | Percentage Change | |||||||||||||
Prior Qtr | Prior Yr Qtr | |||||||||||||
Non-interest-bearing | $ | 6,176,998 | $ | 6,507,523 | $ | 6,385,177 | (5.1) | % | (3.3) | % | ||||
Interest-bearing checking | 1,811,153 | 1,856,244 | 1,947,414 | (2.4) | % | (7.0) | % | |||||||
Regular savings accounts | 2,710,090 | 2,824,711 | 2,784,716 | (4.1) | % | (2.7) | % | |||||||
Money market accounts | 2,198,288 | 2,323,844 | 2,370,995 | (5.4) | % | (7.3) | % | |||||||
Total interest-bearing transaction and savings accounts | 6,719,531 | 7,004,799 | 7,103,125 | (4.1) | % | (5.4) | % | |||||||
Total core deposits | 12,896,529 | 13,512,322 | 13,488,302 | (4.6) | % | (4.4) | % | |||||||
Interest-bearing certificates | 723,530 | 721,944 | 838,631 | 0.2 | % | (13.7) | % | |||||||
Total deposits | $ | 13,620,059 | $ | 14,234,266 | $ | 14,326,933 | (4.3) | % | (4.9) | % |
GEOGRAPHIC CONCENTRATION OF DEPOSITS | |||||||||||||||||
Percentage Change | |||||||||||||||||
Amount | Percentage | Amount | Amount | Prior Qtr | Prior Yr Qtr | ||||||||||||
$ | 7,563,056 | 55.6 | % | $ | 7,845,755 | $ | 7,952,376 | (3.6) | % | (4.9) | % | ||||||
2,998,572 | 22.0 | % | 3,148,520 | 3,067,054 | (4.8) | % | (2.2) | % | |||||||||
2,331,524 | 17.1 | % | 2,493,977 | 2,524,296 | (6.5) | % | (7.6) | % | |||||||||
726,907 | 5.3 | % | 746,014 | 783,207 | (2.6) | % | (7.2) | % | |||||||||
Total deposits | $ | 13,620,059 | 100.0 | % | $ | 14,234,266 | $ | 14,326,933 | (4.3) | % | (4.9) | % |
INCLUDED IN TOTAL DEPOSITS | ||||||||
Public non-interest-bearing accounts | $ | 212,533 | $ | 192,742 | $ | 193,917 | ||
Public interest-bearing transaction & savings accounts | 180,326 | 172,567 | 159,957 | |||||
Public interest-bearing certificates | 26,810 | 33,787 | 39,961 | |||||
Total public deposits | $ | 419,669 | $ | 399,096 | $ | 393,835 |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||
(dollars in thousands) | |||||||||||||||||
ESTIMATED REGULATORY CAPITAL RATIOS AS OF | Actual | Minimum to be categorized as "Adequately Capitalized" | Minimum to be categorized as "Well Capitalized" | ||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||
Total capital to risk-weighted assets | $ | 1,769,064 | 14.04 | % | $ | 1,008,232 | 8.00 | % | $ | 1,260,290 | 10.00 | % | |||||
Tier 1 capital to risk-weighted assets | 1,528,694 | 12.13 | % | 756,174 | 6.00 | % | 756,174 | 6.00 | % | ||||||||
Tier 1 leverage capital to average assets | 1,528,694 | 9.45 | % | 647,345 | 4.00 | % | n/a | n/a | |||||||||
Common equity tier 1 capital to risk-weighted assets | 1,442,194 | 11.44 | % | 567,130 | 4.50 | % | n/a | n/a | |||||||||
Total capital to risk-weighted assets | 1,684,766 | 13.38 | % | 1,007,325 | 8.00 | % | 1,259,156 | 10.00 | % | ||||||||
Tier 1 capital to risk-weighted assets | 1,544,396 | 12.27 | % | 755,494 | 6.00 | % | 1,007,325 | 8.00 | % | ||||||||
Tier 1 leverage capital to average assets | 1,544,396 | 9.55 | % | 646,935 | 4.00 | % | 808,668 | 5.00 | % | ||||||||
Common equity tier 1 capital to risk-weighted assets | 1,544,396 | 12.27 | % | 566,620 | 4.50 | % | 818,452 | 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 | |||||||||||||||||||||||||
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 | $ | 45,654 | $ | 527 | 4.58 | % | $ | 68,608 | $ | 676 | 3.91 | % | $ | 73,101 | $ | 601 | 3.26 | % | ||||||||
Mortgage loans | 8,175,281 | 103,478 | 5.02 | % | 7,841,018 | 94,581 | 4.79 | % | 7,362,363 | 83,059 | 4.48 | % | ||||||||||||||
Commercial/agricultural loans | 1,742,517 | 24,727 | 5.63 | % | 1,670,595 | 20,418 | 4.85 | % | 1,460,486 | 14,966 | 4.07 | % | ||||||||||||||
SBA PPP loans | 9,347 | 224 | 9.51 | % | 21,943 | 613 | 11.08 | % | 209,776 | 5,845 | 11.05 | % | ||||||||||||||
Consumer and other loans | 140,801 | 2,125 | 5.99 | % | 120,583 | 1,824 | 6.00 | % | 119,658 | 1,749 | 5.80 | % | ||||||||||||||
Total loans(1) | 10,113,600 | 131,081 | 5.14 | % | 9,722,747 | 118,112 | 4.82 | % | 9,225,384 | 106,220 | 4.57 | % | ||||||||||||||
Mortgage-backed securities | 3,187,557 | 19,244 | 2.40 | % | 3,183,837 | 17,704 | 2.21 | % | 2,838,759 | 13,344 | 1.86 | % | ||||||||||||||
Other securities | 1,628,553 | 15,945 | 3.88 | % | 1,671,305 | 13,578 | 3.22 | % | 1,550,383 | 8,466 | 2.17 | % | ||||||||||||||
Interest-bearing deposits with banks | 245,538 | 2,126 | 3.44 | % | 778,196 | 4,406 | 2.25 | % | 1,901,165 | 731 | 0.15 | % | ||||||||||||||
FHLB stock | 10,773 | 76 | 2.80 | % | 10,000 | 75 | 2.98 | % | 12,000 | 135 | 4.46 | % | ||||||||||||||
Total investment securities | 5,072,421 | 37,391 | 2.92 | % | 5,643,338 | 35,763 | 2.51 | % | 6,302,307 | 22,676 | 1.43 | % | ||||||||||||||
Total interest-earning assets | 15,186,021 | 168,472 | 4.40 | % | 15,366,085 | 153,875 | 3.97 | % | 15,527,691 | 128,896 | 3.29 | % | ||||||||||||||
Non-interest-earning assets | 927,585 | 1,100,313 | 1,306,437 | |||||||||||||||||||||||
Total assets | $ | 16,113,606 | $ | 16,466,398 | $ | 16,834,128 | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Interest-bearing checking accounts | $ | 1,818,907 | 566 | 0.12 | % | $ | 1,862,887 | 429 | 0.09 | % | $ | 1,875,097 | 289 | 0.06 | % | |||||||||||
Savings accounts | 2,761,323 | 866 | 0.12 | % | 2,822,153 | 481 | 0.07 | % | 2,773,597 | 400 | 0.06 | % | ||||||||||||||
Money market accounts | 2,256,867 | 1,337 | 0.24 | % | 2,378,851 | 769 | 0.13 | % | 2,367,861 | 559 | 0.09 | % | ||||||||||||||
Certificates of deposit | 709,974 | 854 | 0.48 | % | 740,014 | 728 | 0.39 | % | 840,920 | 1,136 | 0.54 | % | ||||||||||||||
Total interest-bearing deposits | 7,547,071 | 3,623 | 0.19 | % | 7,803,905 | 2,407 | 0.12 | % | 7,857,475 | 2,384 | 0.12 | % | ||||||||||||||
Non-interest-bearing deposits | 6,402,297 | — | — | % | 6,458,749 | — | — | % | 6,523,149 | — | — | % | ||||||||||||||
Total deposits | 13,949,368 | 3,623 | 0.10 | % | 14,262,654 | 2,407 | 0.07 | % | 14,380,624 | 2,384 | 0.07 | % | ||||||||||||||
Other interest-bearing liabilities: | ||||||||||||||||||||||||||
FHLB advances | 19,337 | 198 | 4.06 | % | — | — | — | % | 50,000 | 348 | 2.76 | % | ||||||||||||||
Other borrowings | 238,217 | 132 | 0.22 | % | 242,658 | 81 | 0.13 | % | 266,559 | 109 | 0.16 | % | ||||||||||||||
Junior subordinated debentures and subordinated notes | 189,178 | 2,534 | 5.31 | % | 189,178 | 2,188 | 4.59 | % | 246,510 | 2,175 | 3.50 | % | ||||||||||||||
Total borrowings | 446,732 | 2,864 | 2.54 | % | 431,836 | 2,269 | 2.08 | % | 563,069 | 2,632 | 1.85 | % | ||||||||||||||
Total funding liabilities | 14,396,100 | 6,487 | 0.18 | % | 14,694,490 | 4,676 | 0.13 | % | 14,943,693 | 5,016 | 0.13 | % | ||||||||||||||
Other non-interest-bearing liabilities(2) | 292,480 | 257,058 | 216,940 | |||||||||||||||||||||||
Total liabilities | 14,688,580 | 14,951,548 | 15,160,633 | |||||||||||||||||||||||
Shareholders’ equity | 1,425,026 | 1,514,850 | 1,673,495 | |||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 16,113,606 | $ | 16,466,398 | $ | 16,834,128 | ||||||||||||||||||||
Net interest income/rate spread (tax equivalent) | $ | 161,985 | 4.22 | % | $ | 149,199 | 3.84 | % | $ | 123,880 | 3.16 | % | ||||||||||||||
Net interest margin (tax equivalent) | 4.23 | % | 3.85 | % | 3.17 | % | ||||||||||||||||||||
Reconciliation to reported net interest income: | ||||||||||||||||||||||||||
Adjustments for taxable equivalent basis | (2,914 | ) | (2,756 | ) | (2,350 | ) | ||||||||||||||||||||
Net interest income and margin, as reported | $ | 159,071 | 4.16 | % | $ | 146,443 | 3.78 | % | $ | 121,530 | 3.11 | % | ||||||||||||||
Additional Key Financial Ratios: | ||||||||||||||||||||||||||
Return on average assets | 1.34 | % | 1.18 | % | 1.18 | % | ||||||||||||||||||||
Return on average equity | 15.14 | % | 12.85 | % | 11.84 | % | ||||||||||||||||||||
Average equity/average assets | 8.84 | % | 9.20 | % | 9.94 | % | ||||||||||||||||||||
Average interest-earning assets/average interest-bearing liabilities | 189.97 | % | 186.58 | % | 184.40 | % | ||||||||||||||||||||
Average interest-earning assets/average funding liabilities | 105.49 | % | 104.57 | % | 103.91 | % | ||||||||||||||||||||
Non-interest income/average assets | 0.32 | % | 0.38 | % | 0.58 | % | ||||||||||||||||||||
Non-interest expense/average assets | 2.44 | % | 2.29 | % | 2.16 | % | ||||||||||||||||||||
Efficiency ratio(4) | 57.52 | % | 58.65 | % | 62.88 | % | ||||||||||||||||||||
Adjusted efficiency ratio(5) | 54.43 | % | 57.04 | % | 59.71 | % |
(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 |
(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) | |||||||||||||||||||
(rates / ratios annualized) | |||||||||||||||||||
ANALYSIS OF NET INTEREST SPREAD | Years Ended | ||||||||||||||||||
Average Balance | Interest and Dividends | Yield/Cost(3) | Average Balance | Interest and Dividends | Yield/Cost(3) | ||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Held for sale loans | $ | 82,030 | $ | 2,973 | 3.62 | % | $ | 94,252 | $ | 3,066 | 3.25 | % | |||||||
Mortgage loans | 7,731,195 | 364,499 | 4.71 | % | 7,225,860 | 328,115 | 4.54 | % | |||||||||||
Commercial/agricultural loans | 1,617,191 | 77,309 | 4.78 | % | 1,498,808 | 62,479 | 4.17 | % | |||||||||||
SBA PPP loans | 41,167 | 4,677 | 11.36 | % | 770,041 | 49,854 | 6.47 | % | |||||||||||
Consumer and other loans | 123,667 | 7,332 | 5.93 | % | 122,520 | 7,298 | 5.96 | % | |||||||||||
Total loans(1) | 9,595,250 | 456,790 | 4.76 | % | 9,711,481 | 450,812 | 4.64 | % | |||||||||||
Mortgage-backed securities | 3,130,124 | 68,148 | 2.18 | % | 2,451,110 | 46,199 | 1.88 | % | |||||||||||
Other securities | 1,625,250 | 48,278 | 2.97 | % | 1,336,974 | 30,114 | 2.25 | % | |||||||||||
Equity securities | — | — | — | % | 429 | — | — | % | |||||||||||
Interest-bearing deposits with banks | 969,952 | 9,633 | 0.99 | % | 1,392,619 | 1,955 | 0.14 | % | |||||||||||
FHLB stock | 10,628 | 357 | 3.36 | % | 13,966 | 592 | 4.24 | % | |||||||||||
Total investment securities | 5,735,954 | 126,416 | 2.20 | % | 5,195,098 | 78,860 | 1.52 | % | |||||||||||
Total interest-earning assets | 15,331,204 | 583,206 | 3.80 | % | 14,906,579 | 529,672 | 3.55 | % | |||||||||||
Non-interest-earning assets | 1,169,271 | 1,268,348 | |||||||||||||||||
Total assets | $ | 16,500,475 | $ | 16,174,927 | |||||||||||||||
Deposits: | |||||||||||||||||||
Interest-bearing checking accounts | $ | 1,890,917 | 1,557 | 0.08 | % | $ | 1,755,293 | 1,188 | 0.07 | % | |||||||||
Savings accounts | 2,810,264 | 2,053 | 0.07 | % | 2,652,018 | 1,833 | 0.07 | % | |||||||||||
Money market accounts | 2,364,122 | 3,143 | 0.13 | % | 2,305,814 | 2,670 | 0.12 | % | |||||||||||
Certificates of deposit | 764,255 | 3,371 | 0.44 | % | 876,509 | 6,079 | 0.69 | % | |||||||||||
Total interest-bearing deposits | 7,829,558 | 10,124 | 0.13 | % | 7,589,634 | 11,770 | 0.16 | % | |||||||||||
Non-interest-bearing deposits | 6,434,670 | — | — | % | 6,132,875 | — | — | % | |||||||||||
Total deposits | 14,264,228 | 10,124 | 0.07 | % | 13,722,509 | 11,770 | 0.09 | % | |||||||||||
Other interest-bearing liabilities: | |||||||||||||||||||
FHLB advances | 15,285 | 489 | 3.20 | % | 97,945 | 2,592 | 2.65 | % | |||||||||||
Other borrowings | 249,681 | 377 | 0.15 | % | 240,817 | 467 | 0.19 | % | |||||||||||
Junior subordinated debentures and subordinated notes | 189,870 | 8,400 | 4.42 | % | 247,583 | 8,780 | 3.55 | % | |||||||||||
Total borrowings | 454,836 | 9,266 | 2.04 | % | 586,345 | 11,839 | 2.02 | % | |||||||||||
Total funding liabilities | 14,719,064 | 19,390 | 0.13 | % | 14,308,854 | 23,609 | 0.16 | % | |||||||||||
Other non-interest-bearing liabilities(2) | 253,983 | 206,774 | |||||||||||||||||
Total liabilities | 14,973,047 | 14,515,628 | |||||||||||||||||
Shareholders’ equity | 1,527,428 | 1,659,299 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 16,500,475 | $ | 16,174,927 | |||||||||||||||
Net interest income/rate spread (tax equivalent) | $ | 563,816 | 3.67 | % | $ | 506,063 | 3.39 | % | |||||||||||
Net interest margin (tax equivalent) | 3.68 | % | 3.39 | % | |||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||
Adjustments for taxable equivalent basis | (10,637 | ) | (9,172 | ) | |||||||||||||||
Net interest income and margin, as reported | $ | 553,179 | 3.61 | % | $ | 496,891 | 3.33 | % | |||||||||||
Additional Key Financial Ratios: | |||||||||||||||||||
Return on average assets | 1.18 | % | 1.24 | % | |||||||||||||||
Return on average equity | 12.79 | % | 12.12 | % | |||||||||||||||
Average equity/average assets | 9.26 | % | 10.26 | % | |||||||||||||||
Average interest-earning assets/average interest-bearing liabilities | 185.06 | % | 182.32 | % | |||||||||||||||
Average interest-earning assets/average funding liabilities | 104.16 | % | 104.18 | % | |||||||||||||||
Non-interest income/average assets | 0.46 | % | 0.60 | % | |||||||||||||||
Non-interest expense/average assets | 2.29 | % | 2.35 | % | |||||||||||||||
Efficiency ratio(4) | 60.04 | % | 64.06 | % | |||||||||||||||
Adjusted efficiency ratio(5) | 57.99 | % | 60.22 | % |
(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 |
(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 | |||||||||||||||||||
ADJUSTED REVENUE | Quarters Ended | Years Ended | |||||||||||||||||
Net interest income (GAAP) | $ | 159,071 | $ | 146,443 | $ | 121,530 | $ | 553,179 | $ | 496,891 | |||||||||
Non-interest income (GAAP) | 13,070 | 15,585 | 24,474 | 75,255 | 96,416 | ||||||||||||||
Total revenue (GAAP) | 172,141 | 162,028 | 146,004 | 628,434 | 593,307 | ||||||||||||||
Exclude net loss (gain) on sale of securities | 3,721 | (6 | ) | 136 | 3,248 | (482 | ) | ||||||||||||
Exclude net change in valuation of financial instruments carried at fair value | (157 | ) | (532 | ) | (2,721 | ) | (807 | ) | (4,616 | ) | |||||||||
Exclude gain on sale of branches | — | — | — | (7,804 | ) | — | |||||||||||||
Adjusted revenue (non-GAAP) | $ | 175,705 | $ | 161,490 | $ | 143,419 | $ | 623,071 | $ | 588,209 |
ADJUSTED EARNINGS | Quarters Ended | Years Ended | |||||||||||||||||
Net income (GAAP) | $ | 54,380 | $ | 49,070 | $ | 49,927 | $ | 195,378 | $ | 201,048 | |||||||||
Exclude net loss (gain) on sale of securities | 3,721 | (6 | ) | 136 | 3,248 | (482 | ) | ||||||||||||
Exclude net change in valuation of financial instruments carried at fair value | (157 | ) | (532 | ) | (2,721 | ) | (807 | ) | (4,616 | ) | |||||||||
Exclude merger and acquisition-related expenses | — | — | — | — | 660 | ||||||||||||||
Exclude COVID-19 expenses | — | — | 127 | — | 436 | ||||||||||||||
Exclude gain on sale of branches | — | — | — | (7,804 | ) | — | |||||||||||||
Exclude Banner Forward expenses | 838 | 411 | 1,157 | 5,293 | 11,604 | ||||||||||||||
Exclude loss on extinguishment of debt | — | — | 2,284 | 793 | 2,284 | ||||||||||||||
Exclude related net tax (benefit) expense | (1,057 | ) | 31 | (236 | ) | (174 | ) | (2,373 | ) | ||||||||||
Total adjusted earnings (non-GAAP) | $ | 57,725 | $ | 48,974 | $ | 50,674 | $ | 195,927 | $ | 208,561 | |||||||||
Diluted earnings per share (GAAP) | $ | 1.58 | $ | 1.43 | $ | 1.44 | $ | 5.67 | $ | 5.76 | |||||||||
Diluted adjusted earnings per share (non-GAAP) | $ | 1.68 | $ | 1.42 | $ | 1.47 | $ | 5.69 | $ | 5.97 |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||
ADJUSTED EFFICIENCY RATIO | Quarters Ended | Years Ended | |||||||||||||||||
Non-interest expense (GAAP) | $ | 99,013 | $ | 95,034 | $ | 91,805 | $ | 377,295 | $ | 380,101 | |||||||||
Exclude merger and acquisition-related expenses | — | — | — | — | (660 | ) | |||||||||||||
Exclude COVID-19 expenses | — | — | (127 | ) | — | (436 | ) | ||||||||||||
Exclude Banner Forward expenses | (838 | ) | (411 | ) | (1,157 | ) | (5,293 | ) | (11,604 | ) | |||||||||
Exclude CDI amortization | (1,215 | ) | (1,215 | ) | (1,574 | ) | (5,279 | ) | (6,571 | ) | |||||||||
Exclude state/municipal tax expense | (1,304 | ) | (1,223 | ) | (976 | ) | (4,693 | ) | (4,343 | ) | |||||||||
Exclude REO operations | (28 | ) | (68 | ) | (49 | ) | 104 | 22 | |||||||||||
Exclude loss on extinguishment of debt | — | — | (2,284 | ) | (793 | ) | (2,284 | ) | |||||||||||
Adjusted non-interest expense (non-GAAP) | $ | 95,628 | $ | 92,117 | $ | 85,638 | $ | 361,341 | $ | 354,225 | |||||||||
Net interest income (GAAP) | $ | 159,071 | $ | 146,443 | $ | 121,530 | $ | 553,179 | $ | 496,891 | |||||||||
Non-interest income (GAAP) | 13,070 | 15,585 | 24,474 | 75,255 | 96,416 | ||||||||||||||
Total revenue (GAAP) | 172,141 | 162,028 | 146,004 | 628,434 | 593,307 | ||||||||||||||
Exclude net loss (gain) on sale of securities | 3,721 | (6 | ) | 136 | 3,248 | (482 | ) | ||||||||||||
Exclude net change in valuation of financial instruments carried at fair value | (157 | ) | (532 | ) | (2,721 | ) | (807 | ) | (4,616 | ) | |||||||||
Exclude gain on sale of branches | — | — | — | (7,804 | ) | — | |||||||||||||
Adjusted revenue (non-GAAP) | $ | 175,705 | $ | 161,490 | $ | 143,419 | $ | 623,071 | $ | 588,209 | |||||||||
Efficiency ratio (GAAP) | 57.52 | % | 58.65 | % | 62.88 | % | 60.04 | % | 64.06 | % | |||||||||
Adjusted efficiency ratio (non-GAAP) | 54.43 | % | 57.04 | % | 59.71 | % | 57.99 | % | 60.22 | % |
TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS | |||||||||||
Shareholders’ equity (GAAP) | $ | 1,456,432 | $ | 1,408,659 | $ | 1,690,327 | |||||
Exclude goodwill and other intangible assets, net | 382,561 | 383,776 | 387,976 | ||||||||
Tangible common shareholders’ equity (non-GAAP) | $ | 1,073,871 | $ | 1,024,883 | $ | 1,302,351 | |||||
Total assets (GAAP) | $ | 15,833,431 | $ | 16,360,809 | $ | 16,804,872 | |||||
Exclude goodwill and other intangible assets, net | 382,561 | 383,776 | 387,976 | ||||||||
Total tangible assets (non-GAAP) | $ | 15,450,870 | $ | 15,977,033 | $ | 16,416,896 | |||||
Common shareholders’ equity to total assets (GAAP) | 9.20 | % | 8.61 | % | 10.06 | % | |||||
Tangible common shareholders’ equity to tangible assets (non-GAAP) | 6.95 | % | 6.41 | % | 7.93 | % | |||||
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE | |||||||||||
Tangible common shareholders’ equity (non-GAAP) | $ | 1,073,871 | $ | 1,024,883 | $ | 1,302,351 | |||||
Common shares outstanding at end of period | 34,194,018 | 34,191,759 | 34,252,632 | ||||||||
Common shareholders’ equity (book value) per share (GAAP) | $ | 42.59 | $ | 41.20 | $ | 49.35 | |||||
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP) | $ | 31.41 | $ | 29.97 | $ | 38.02 |
CONTACT: | |
PRESIDENT & CEO | |
(509) 527-3636 |
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