UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
|
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Washington, D.C. 20549
|
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FORM 10-Q
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___________________________________ | ||||||||||||||||||||||||||||
(Mark One)
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[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2011.
|
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OR
|
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________________ to __________________
|
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Commission File Number 0-26584
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BANNER CORPORATION
|
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(Exact name of registrant as specified in its charter)
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___________________________________ | ||||||||||||||||||||||||||||
Washington
(State or other jurisdiction of incorporation or organization)
|
91-1691604
(I.R.S. Employer Identification Number)
|
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10 South First Avenue, Walla Walla, Washington 99362
|
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(Address of principal executive offices and zip code)
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Registrant's telephone number, including area code: (509) 527-3636
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___________________________________ | ||||||||||||||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No [ ]
|
||||||||||||||||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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||||||||||||||||||||||||||||
Large accelerated filer
|
[ ] |
Accelerated filer
|
[X] |
Non-accelerated filer
|
[ ] |
Smaller reporting company [ ]
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||||||||||||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
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APPLICABLE ONLY TO CORPORATE ISSUERS
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
|
||||||||||||||||||||||||||||
Title of class:
Common Stock, $.01 par value per share
|
As of July 31, 2011
16,815,255 shares*
|
|||||||||||||||||||||||||||
* Includes 34,340 shares held by the Employee Stock Ownership Plan that have not been released, committed to be released, or allocated to participant accounts.
|
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PART I - FINANCIAL INFORMATION
|
|
Item 1 - Financial Statements. The Consolidated Financial Statements of Banner Corporation and Subsidiaries filed as a part of the report are as follows:
|
|
Consolidated Statements of Financial Condition as of June 30, 2011 and December 31, 2010
|
4
|
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2011 and 2010
|
5
|
Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2011 and 2010
|
6
|
Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2011 and the Year Ended
December 31, 2010
|
7
|
|
|
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010
|
9
|
Selected Notes to the Consolidated Financial Statements
|
11
|
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Executive Overview
|
40
|
Comparison of Financial Condition at June 30, 2011 and December 31, 2010
|
44
|
Comparison of Results of Operations for the Three and Six Months Ended June 30, 2011 and 2010
|
45
|
Asset Quality
|
50
|
Liquidity and Capital Resources
|
55
|
Capital Requirements
|
55
|
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
|
|
Market Risk and Asset/Liability Management
|
57
|
Sensitivity Analysis
|
57
|
Item 4 - Controls and Procedures
|
61
|
PART II - OTHER INFORMATION
|
|
Item 1 - Legal Proceedings
|
62
|
Item 1A - Risk Factors
|
62
|
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
|
62
|
Item 3 - Defaults upon Senior Securities
|
62
|
Item 4 – [Removed and Reserved]
|
|
Item 5 - Other Information
|
62
|
Item 6 - Exhibits
|
63
|
SIGNATURES
|
65
|
June 30
|
December 31
|
|||||
ASSETS
|
2011
|
2010
|
||||
Cash and due from banks
|
$
|
216,444
|
$
|
361,652
|
||
Securities—trading, amortized cost $120,458 and $128,070, respectively
|
89,374
|
95,379
|
||||
Securities—available-for-sale, amortized cost $284,798 and $199,058, respectively
|
287,255
|
200,227
|
||||
Securities—held-to-maturity, fair value $79,129 and $73,916, respectively
|
76,596
|
72,087
|
||||
Federal Home Loan Bank stock
|
37,371
|
37,371
|
||||
Loans receivable:
|
||||||
Held for sale
|
1,907
|
3,492
|
||||
Held for portfolio
|
3,304,760
|
3,399,625
|
||||
Allowance for loan losses
|
(92,000
|
)
|
(97,401
|
)
|
||
3,214,667
|
3,305,716
|
|||||
Accrued interest receivable
|
15,907
|
15,927
|
||||
Real estate owned, held for sale, net
|
71,205
|
100,872
|
||||
Property and equipment, net
|
93,532
|
96,502
|
||||
Other intangibles, net
|
7,442
|
8,609
|
||||
Income taxes receivable, net
|
--
|
12,981
|
||||
Bank-owned life insurance
|
57,578
|
56,653
|
||||
Other assets
|
38,696
|
42,106
|
||||
$
|
4,206,067
|
$
|
4,406,082
|
|||
LIABILITIES
|
||||||
Deposits:
|
||||||
Non-interest-bearing
|
$
|
645,778
|
$
|
600,457
|
||
Interest-bearing transaction and savings accounts
|
1,422,290
|
1,433,248
|
||||
Interest-bearing certificates
|
1,398,332
|
1,557,493
|
||||
3,466,400
|
3,591,198
|
|||||
Advances from FHLB at fair value
|
10,572
|
43,523
|
||||
Other borrowings
|
136,285
|
175,813
|
||||
Junior subordinated debentures at fair value (issued in connection with Trust Preferred Securities)
|
47,986
|
48,425
|
||||
Accrued expenses and other liabilities
|
19,181
|
21,048
|
||||
Deferred compensation
|
14,617
|
14,603
|
||||
3,695,041
|
3,894,610
|
|||||
COMMITMENTS AND CONTINGENCIES (Note 15)
|
||||||
STOCKHOLDERS’ EQUITY
|
||||||
Preferred stock - $0.01 par value, 500,000 shares authorized; Series A – liquidation preference
|
||||||
$1,000 per share, 124,000 shares issued and outstanding
|
119,851
|
119,000
|
||||
Common stock and paid in capital - $0.01 par value per share, 50,000,000 shares authorized, 16,668,694 shares
issued: 16,634,354 shares and 16,130,441 shares outstanding at June 30, 2011 and December 31, 2010,
respectively
|
517,782
|
509,457
|
||||
Unearned shares of common stock issued to Employee Stock Ownership Plan (ESOP) trust at cost:
|
||||||
34,340 restricted shares outstanding at June 30, 2011 and December 31, 2010
|
(1,987
|
)
|
(1,987
|
)
|
||
Retained earnings (accumulated deficit)
|
(126,268
|
)
|
(115,348
|
)
|
||
Accumulated other comprehensive income:
|
||||||
Unrealized gain (loss) on securities available-for-sale and/or transferred to held-to-maturity
|
1,648
|
350
|
||||
511,026
|
511,472
|
|||||
$
|
4,206,067
|
$
|
4,406,082
|
Three Months Ended
|
Six Months Ended
|
|||||||||||
June 30
|
June 30
|
|||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||
INTEREST INCOME:
|
||||||||||||
Loans receivable
|
$
|
46,846
|
$
|
52,473
|
$
|
93,601
|
$
|
105,232
|
||||
Mortgage-backed securities
|
859
|
1,045
|
1,734
|
2,171
|
||||||||
Other securities and cash equivalents
|
2,183
|
2,116
|
4,216
|
4,201
|
||||||||
49,888
|
55,634
|
99,551
|
111,604
|
|||||||||
INTEREST EXPENSE:
|
||||||||||||
Deposits
|
7,014
|
14,700
|
14,826
|
30,498
|
||||||||
FHLB advances
|
64
|
320
|
242
|
681
|
||||||||
Other borrowings
|
568
|
626
|
1,147
|
1,260
|
||||||||
Junior subordinated debentures
|
1,041
|
1,047
|
2,079
|
2,074
|
||||||||
8,687
|
16,693
|
18,294
|
34,513
|
|||||||||
Net interest income before provision for loan losses
|
41,201
|
38,941
|
81,257
|
77,091
|
||||||||
PROVISION FOR LOAN LOSSES
|
8,000
|
16,000
|
25,000
|
30,000
|
||||||||
Net interest income (loss)
|
33,201
|
22,941
|
56,257
|
47,091
|
||||||||
OTHER OPERATING INCOME:
|
||||||||||||
Deposit fees and other service charges
|
5,693
|
5,632
|
10,972
|
10,792
|
||||||||
Mortgage banking operations
|
855
|
817
|
1,817
|
1,765
|
||||||||
Loan servicing fees
|
397
|
315
|
653
|
628
|
||||||||
Miscellaneous
|
369
|
243
|
862
|
869
|
||||||||
7,314
|
7,007
|
14,304
|
14,054
|
|||||||||
Other-than-temporary impairment losses
|
--
|
--
|
--
|
(1,231
|
)
|
|||||||
Net change in valuation of financial instruments carried at fair value
|
1,939
|
(821)
|
2,195
|
1,087
|
||||||||
Total other operating income
|
9,253
|
6,186
|
16,499
|
13,910
|
||||||||
OTHER OPERATING EXPENSES:
|
||||||||||||
Salary and employee benefits
|
18,288
|
16,793
|
35,543
|
33,352
|
||||||||
Less capitalized loan origination costs
|
(1,948
|
)
|
(1,740
|
)
|
(3,668
|
)
|
(3,345
|
)
|
||||
Occupancy and equipment
|
5,436
|
5,581
|
10,830
|
11,185
|
||||||||
Information/computer data services
|
1,521
|
1,594
|
3,088
|
3,100
|
||||||||
Payment and card processing expenses
|
1,939
|
1,683
|
3,586
|
3,107
|
||||||||
Professional services
|
1,185
|
1,874
|
2,857
|
3,161
|
||||||||
Advertising and marketing
|
1,903
|
1,742
|
3,643
|
3,692
|
||||||||
Deposit insurance
|
1,389
|
2,209
|
3,358
|
4,341
|
||||||||
State/municipal business and use taxes
|
544
|
533
|
1,038
|
1,013
|
||||||||
REO operations
|
6,568
|
4,166
|
11,199
|
7,224
|
||||||||
Amortization of core deposit intangibles
|
570
|
615
|
1,167
|
1,259
|
||||||||
Miscellaneous
|
2,860
|
2,974
|
5,758
|
5,350
|
||||||||
Total other operating expenses
|
40,255
|
38,024
|
78,399
|
73,439
|
||||||||
Income (loss) before provision for (benefit from) income taxes
|
2,199
|
(8,897
|
)
|
(5,643
|
)
|
(12,438
|
)
|
|||||
PROVISION FOR (BENEFIT FROM) INCOME TAXES
|
--
|
(3,951
|
)
|
--
|
(5,975
|
)
|
||||||
NET INCOME (LOSS)
|
2,199
|
(4,946
|
)
|
(5,643
|
)
|
(6,463
|
)
|
|||||
PREFERRED STOCK DIVIDEND AND DISCOUNT ACCRETION
|
||||||||||||
Preferred stock dividend
|
1,550
|
1,550
|
3,100
|
3,100
|
||||||||
Preferred stock discount accretion
|
425
|
399
|
851
|
797
|
||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
224
|
$
|
(6,895
|
)
|
$
|
(9,594
|
)
|
$
|
(10,360
|
)
|
|
Earnings (loss) per common share:
|
||||||||||||
Basic
|
$
|
0.01
|
$
|
(1.97
|
)
|
$
|
(0.58
|
)
|
$
|
(3.11
|
)
|
|
Diluted
|
$
|
0.01
|
$
|
(1.97
|
)
|
$
|
(0.58
|
)
|
$
|
(3.11
|
)
|
|
Cumulative dividends declared per common share:
|
$
|
0.01
|
$
|
0.07
|
$
|
0.08
|
$
|
0.14
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
NET INCOME (LOSS)
|
$ | 2,199 | $ | (4,946 | ) | $ | (5,643 | ) | $ | (6,463 | ) | |||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF INCOME TAXES:
|
||||||||||||||||
Unrealized holding gain (loss) during the period, net of deferred
income tax (benefit) of $0, $323, $0 and $629, respectively
|
1,970 | 576 | 1,289 | 1,119 | ||||||||||||
Amortization of unrealized loss on tax exempt securities transferred from
available-for-sale to held-to-maturity
|
4 | 10 | 9 | 22 | ||||||||||||
Other comprehensive income (loss)
|
1,974 | 586 | 1,298 | 1,141 | ||||||||||||
COMPREHENSIVE INCOME (LOSS)
|
$ | 4,173 | $ | (4,360 | ) | $ | (4,345 | ) | $ | (5,322 | ) |
Retained
Earnings
(Accumulated
Deficit)
|
Accumulated
Other Comprehensive Income (Loss)
|
Stockholders’
Equity
|
|||||||||||||||||||
Preferred Stock
|
Common Stock and Paid in Capital (1)
|
||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
Balance, January 1, 2011
|
124,000
|
$
|
119,000
|
16,130,441
|
$
|
507,470
|
$
|
(115,348
|
)
|
$
|
350
|
$
|
511,472
|
||||||||
Net income (loss)
|
(5,643
|
)
|
(5,643
|
)
|
|||||||||||||||||
Change in valuation of securities—available-for-
sale, net of income tax
|
1,289
|
1,289
|
|||||||||||||||||||
Amortization of unrealized loss on tax exempt
securities transferred from available-for-sale to
held-to-maturity, net of income tax
|
9
|
9
|
|||||||||||||||||||
Accretion of preferred stock discount
|
851
|
(851
|
)
|
--
|
|||||||||||||||||
Accrual of dividends on preferred stock
|
(3,100
|
)
|
(3,100
|
)
|
|||||||||||||||||
Accrual of dividends on common stock ($.08/share
cumulative)
|
(1,326
|
)
|
(1,326
|
)
|
|||||||||||||||||
Proceeds from issuance of common stock for
stockholder reinvestment program, net of
registration expenses and reverse stock split
fractional share repurchases
|
503,913
|
8,265
|
8,265
|
||||||||||||||||||
Amortization of compensation related to restricted
stock grant
|
42
|
42
|
|||||||||||||||||||
Amortization of compensation related to stock
options
|
18
|
18
|
|||||||||||||||||||
BALANCE, June 30, 2011
|
124,000
|
$
|
119,851
|
16,634,354
|
$
|
515,795
|
$
|
(126,268
|
)
|
$
|
1,648
|
$
|
511,026
|
(1)
|
Common Stock and Paid in Capital includes a reduction of $2 million related to 34,340 unearned shares of common stock issued to the ESOP.
|
Retained Earnings (Accumulated Deficit)
|
Accumulated Other Comprehensive Income (Loss)
|
Stockholders’
Equity
|
|||||||||||||||||||
Preferred Stock
|
Common Stock and Paid in Capital (1)
|
||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
Balance, January 1, 2010
|
124,000
|
$
|
117,407
|
3,042,744
|
$
|
329,549
|
$
|
(42,077
|
)
|
$
|
249
|
$
|
405,128
|
||||||||
Net income (loss)
|
(61,896
|
)
|
(61,896
|
)
|
|||||||||||||||||
Change in valuation of securities—available-for-sale, net of income tax
|
59
|
59
|
|||||||||||||||||||
Amortization of unrealized loss on tax exempt securities transferred from available-for-sale to held-to-maturity, net of income tax
|
42
|
42
|
|||||||||||||||||||
Accretion of preferred stock discount
|
1,593
|
(1,593
|
)
|
--
|
|||||||||||||||||
Accrual of dividends on preferred stock
|
(6,200
|
)
|
(6,200
|
)
|
|||||||||||||||||
Accrual of dividends on common stock ($.28/share cumulative)
|
(3,582
|
)
|
(3,582
|
)
|
|||||||||||||||||
Proceeds from issuance of common stock for stockholder reinvestment program, net of registration expenses
|
836,989
|
16,201
|
16,201
|
||||||||||||||||||
Proceeds from issuance of common stock, net of offering costs
|
12,234,143
|
161,637
|
161,637
|
||||||||||||||||||
Amortization of compensation related to
Management Recognition Plan (MRP)
|
2
|
2
|
|||||||||||||||||||
Amortization of compensation related to restricted stock grant
|
16,565
|
28
|
28
|
||||||||||||||||||
Amortization of compensation related to stock options
|
53
|
53
|
|||||||||||||||||||
BALANCE, December 31, 2010
|
124,000
|
$
|
119,000
|
16,130,441
|
$
|
507,470
|
$
|
(115,348
|
)
|
$
|
350
|
$
|
511,472
|
Six Months Ended
June 30
|
||||||||
2011
|
2010
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$ | (5,643 | ) | $ | (6,463 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
||||||||
Depreciation
|
4,358 | 4,683 | ||||||
Deferred income and expense, net of amortization
|
860 | 1,211 | ||||||
Amortization of core deposit and other intangibles
|
1,167 | 1,259 | ||||||
Other-than-temporary impairment losses
|
-- | 1,231 | ||||||
Net change in valuation of financial instruments carried at fair value
|
(2,195 | ) | (1,088 | ) | ||||
Purchases of securities—trading
|
-- | (2,572 | ) | |||||
Principal repayments and maturities of securities—trading
|
7,600 | 45,970 | ||||||
Deferred taxes
|
-- | 141 | ||||||
Equity-based compensation
|
60 | 38 | ||||||
Increase in cash surrender value of bank-owned life insurance
|
(925 | ) | (881 | ) | ||||
Gain on sale of loans, excluding capitalized servicing rights
|
(1,164 | ) | (1,348 | ) | ||||
Loss on disposal of real estate held for sale and property
and equipment, net
|
521 | 1,383 | ||||||
Provision for losses on loans and real estate held for sale
|
32,838 | 31,340 | ||||||
Origination of loans held for sale
|
(114,706 | ) | (121,652 | ) | ||||
Proceeds from sales of loans held for sale
|
116,291 | 121,330 | ||||||
Net change in:
|
||||||||
Other assets
|
16,368 | (3,631 | ) | |||||
Other liabilities
|
(827 | ) | 1,025 | |||||
Net cash provided from operating activities
|
54,603 | 71,976 | ||||||
INVESTING ACTIVITIES:
|
||||||||
Purchases of securities available-for-sale
|
(174,739 | ) | (79,801 | ) | ||||
Principal repayments and maturities of securities available-for-sale
|
88,031 | 34,725 | ||||||
Proceeds from sales of securities available-for-sale
|
-- | 1,965 | ||||||
Purchases of securities held-to-maturity
|
(7,488 | ) | (499 | ) | ||||
Principal repayments and maturities of securities held-to-maturity
|
2,964 | 1,675 | ||||||
Principal repayments of loans, net
|
39,025 | 84,328 | ||||||
Purchases of loans and participating interest in loans
|
(97 | ) | (129 | ) | ||||
Purchases of property and equipment, net
|
(1,413 | ) | (698 | ) | ||||
Proceeds from sale of other repossessed assets and REO held for sale, net
|
48,264 | 18,886 | ||||||
Other
|
(106 | ) | (80 | ) | ||||
Net cash provided from (used by) investing activities
|
(5,559 | ) | 60,372 | |||||
FINANCING ACTIVITIES:
|
||||||||
Decrease in deposits, net
|
(124,798 | ) | (26,555 | ) | ||||
Repayment of FHLB advances
|
(32,802 | ) | (142,502 | ) | ||||
Decrease in other borrowings, net
|
(39,528 | ) | (4,110 | ) | ||||
Cash dividends paid
|
(5,389 | ) | (3,545 | ) | ||||
Cash proceeds from issuance of stock for stockholder reinvestment program,
net of reverse stock split fractional share repurchases
|
8,265 | 10,503 | ||||||
Cash proceeds from issuance of stock in secondary offering, net of offering costs
|
-- | 148,042 | ||||||
Net cash used by financing activities
|
(194,252 | ) | (18,167 | ) | ||||
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
|
(145,208 | ) | 114,181 | |||||
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD
|
361,652 | 323,005 | ||||||
CASH AND DUE FROM BANKS, END OF PERIOD
|
$ | 216,444 | $ | 437,186 |
Six Months Ended
June 30
|
||||||
2011
|
2010
|
|||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||
Interest paid in cash
|
$
|
19,575
|
$
|
35,784
|
||
Taxes received in cash
|
(13,058
|
)
|
(561
|
)
|
||
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
|
||||||
Loans, net of discounts, specific loss allowances and unearned income,
transferred to real estate owned and other repossessed assets
|
26,917
|
45,487
|
June 30
2011
|
December 31
2010
|
June 30
2010
|
||||||
Interest-bearing deposits included in cash and due from banks
|
$
|
168,198
|
$
|
321,896
|
$
|
369,864
|
||
U.S. Government and agency obligations
|
216,761
|
139,807
|
108,672
|
|||||
Municipal bonds:
|
||||||||
Taxable
|
14,486
|
7,123
|
3,221
|
|||||
Tax exempt
|
83,315
|
75,509
|
69,051
|
|||||
Total municipal bonds
|
97,801
|
82,632
|
72,272
|
|||||
Corporate bonds
|
59,788
|
58,495
|
43,710
|
|||||
Mortgage-backed or related securities:
|
||||||||
GNMA
|
21,818
|
23,732
|
16,844
|
|||||
FHLMC
|
25,941
|
26,952
|
37,087
|
|||||
FNMA
|
27,362
|
32,341
|
36,691
|
|||||
Private issuer
|
3,108
|
3,544
|
3,949
|
|||||
Total mortgage-backed or related securities
|
78,229
|
86,569
|
94,571
|
|||||
Equity securities (excludes FHLB stock)
|
646
|
190
|
130
|
|||||
Total securities
|
453,225
|
367,693
|
319,355
|
|||||
FHLB stock
|
37,371
|
37,371
|
37,371
|
|||||
$
|
658,794
|
$
|
726,960
|
$
|
726,590
|
June 30, 2011
|
December 31, 2010
|
||||||||||||||||||
Amortized
Cost
|
Fair Value
|
Percent of
Total
|
Amortized
Cost
|
Fair Value
|
Percent of
Total
|
||||||||||||||
U.S. Government and agency obligations
|
$
|
4,163
|
$
|
4,321
|
4.9
|
%
|
$
|
4,167
|
$
|
4,379
|
4.6
|
%
|
|||||||
Municipal bonds:
|
|||||||||||||||||||
Taxable
|
632
|
661
|
0.7
|
682
|
693
|
0.7
|
|||||||||||||
Tax exempt
|
5,426
|
5,695
|
6.4
|
5,422
|
5,705
|
6.0
|
|||||||||||||
Total municipal bonds
|
6,058
|
6,356
|
7.1
|
6,104
|
6,398
|
6.7
|
|||||||||||||
Corporate bonds
|
63,530
|
35,834
|
40.1
|
63,581
|
34,724
|
36.4
|
|||||||||||||
Mortgage-backed or related securities:
|
|||||||||||||||||||
FHLMC
|
13,023
|
13,796
|
15.4
|
16,554
|
17,347
|
18.2
|
|||||||||||||
FNMA
|
26,769
|
28,421
|
31.8
|
30,749
|
32,341
|
33.9
|
|||||||||||||
Total mortgage-backed or
related securities
|
39,792
|
42,217
|
47.2
|
47,303
|
49,688
|
52.1
|
|||||||||||||
Equity securities
|
6,915
|
646
|
0.7
|
6,915
|
190
|
0.2
|
|||||||||||||
$
|
120,458
|
$
|
89,374
|
100.0
|
%
|
$
|
128,070
|
$
|
95,379
|
100.0
|
%
|
June 30, 2011
|
December 31, 2010
|
||||||||||
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||
Due in one year or less
|
$
|
2,761
|
$
|
2,810
|
$
|
1,762
|
$
|
1,816
|
|||
Due after one year through five years
|
1,546
|
1,623
|
2,549
|
2,668
|
|||||||
Due after five years through ten years
|
19,065
|
20,084
|
20,442
|
21,328
|
|||||||
Due after ten years through twenty years
|
14,436
|
15,077
|
16,234
|
16,840
|
|||||||
Due after twenty years
|
75,735
|
49,134
|
80,168
|
52,537
|
|||||||
113,543
|
88,728
|
121,155
|
95,189
|
||||||||
Equity securities
|
6,915
|
646
|
6,915
|
190
|
|||||||
$
|
120,458
|
$
|
89,374
|
$
|
128,070
|
$
|
95,379
|
June 30, 2011
|
|||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
Percent of
Total
|
|||||||||||
U.S. Government and agency obligations
|
$
|
211,914
|
$
|
629
|
$
|
(103
|
)
|
$
|
212,440
|
74.0
|
%
|
||||
Municipal bonds:
|
|||||||||||||||
Taxable
|
6,802
|
100
|
--
|
6,902
|
2.4
|
||||||||||
Tax exempt
|
9,176
|
63
|
(41
|
)
|
9,198
|
3.2
|
|||||||||
Total municipal bonds
|
15,978
|
163
|
(41
|
)
|
16,100
|
5.6
|
|||||||||
Corporate bonds
|
22,704
|
10
|
(11
|
)
|
22,703
|
7.9
|
|||||||||
Mortgage-backed or related securities:
|
|||||||||||||||
FHLMC
|
6,768
|
244
|
--
|
7,012
|
2.4
|
||||||||||
FNMA
|
4,067
|
32
|
(25
|
)
|
4,074
|
1.4
|
|||||||||
GNMA
|
20,430
|
1,388
|
--
|
21,818
|
7.6
|
||||||||||
Private issuer
|
2,937
|
171
|
--
|
3,108
|
1.1
|
||||||||||
Total mortgage-backed or related
securities
|
34,202
|
1,835
|
(25)
|
36,012
|
12.5
|
||||||||||
$
|
284,798
|
$
|
2,637
|
$
|
(180
|
)
|
$
|
287,255
|
100.0
|
%
|
|||||
December 31, 2010
|
|||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
Percent of
Total
|
|||||||||||
U.S. Government and agency obligations
|
$
|
135,770
|
$
|
323
|
$
|
(665
|
)
|
$
|
135,428
|
67.6
|
%
|
||||
Municipal bonds:
|
|||||||||||||||
Taxable
|
800
|
--
|
(25
|
)
|
775
|
0.4
|
|||||||||
Tax exempt
|
4,723
|
--
|
(102
|
)
|
4,621
|
2.3
|
|||||||||
Total municipal bonds
|
5,523
|
--
|
(127
|
)
|
5,396
|
2.7
|
|||||||||
Corporate bonds
|
22,536
|
--
|
(14
|
)
|
22,522
|
11.2
|
|||||||||
Mortgage-backed or related securities:
|
|||||||||||||||
FHLMC
|
9,314
|
291
|
--
|
9,605
|
4.8
|
||||||||||
GNMA
|
22,597
|
1,167
|
(32
|
)
|
23,732
|
11.9
|
|||||||||
Private issuer
|
3,318
|
226
|
--
|
3,544
|
1.8
|
||||||||||
Total mortgage-backed or related
securities
|
35,229
|
1,684
|
(32
|
)
|
36,881
|
18.5
|
|||||||||
$
|
199,058
|
$
|
2,007
|
$
|
(838
|
)
|
$
|
200,227
|
100.0
|
%
|
June 30, 2011
|
||||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
U.S. Government and agency obligations
|
$ | 25,697 | $ | (103 | ) | $ | -- | $ | -- | $ | 25,697 | $ | (103 | ) | ||||||||||
Municipal bonds:
|
||||||||||||||||||||||||
Taxable
|
455 | -- | -- | -- | 455 | -- | ||||||||||||||||||
Tax exempt
|
2,817 | (41 | ) | -- | -- | 2,817 | (41 | ) | ||||||||||||||||
Total municipal bonds
|
3,272 | (41 | ) | -- | -- | 3,272 | (41 | ) | ||||||||||||||||
Corporate bonds
|
5,263 | (11 | ) | -- | -- | 5,263 | (11 | ) | ||||||||||||||||
Mortgage-backed or related securities
|
3,029 | (25 | ) | -- | -- | 3,029 | (25 | ) | ||||||||||||||||
$ | 37,261 | $ | (180 | ) | $ | -- | $ | -- | $ | 37,261 | $ | (180 | ) | |||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
U.S. Government and agency obligations
|
$ | 70,426 | $ | (665 | ) | $ | -- | $ | -- | $ | 70,426 | $ | (665 | ) | ||||||||||
Municipal bonds:
|
||||||||||||||||||||||||
Taxable
|
775 | (25 | ) | -- | -- | 775 | (25 | ) | ||||||||||||||||
Tax exempt
|
4,621 | (102 | ) | -- | -- | 4,621 | (102 | ) | ||||||||||||||||
Total municipal bonds
|
5,396 | (127 | ) | -- | -- | 5,396 | (127 | ) | ||||||||||||||||
Corporate bonds
|
17,604 | (14 | ) | -- | -- | 17,604 | (14 | ) | ||||||||||||||||
Mortgage-backed or related securities
|
2,488 | (32 | ) | -- | -- | 2,488 | (32 | ) | ||||||||||||||||
$ | 95,914 | $ | (838 | ) | $ | -- | $ | -- | $ | 95,914 | $ | (838 | ) |
June 30, 2011
|
December 31, 2010
|
||||||||||
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||
Due in one year or less
|
$
|
42,603
|
$
|
42,630
|
$
|
55,135
|
$
|
55,132
|
|||
Due after one year through five years
|
171,604
|
172,148
|
107,356
|
106,916
|
|||||||
Due after five years through ten years
|
40,456
|
40,539
|
1,338
|
1,298
|
|||||||
Due after ten years through twenty years
|
2,937
|
3,108
|
3,318
|
3,544
|
|||||||
Due after twenty years
|
27,198
|
28,830
|
31,911
|
33,337
|
|||||||
$
|
284,798
|
$
|
287,255
|
$
|
199,058
|
$
|
200,227
|
June 30, 2011
|
|||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
Percent of
Total
|
|||||||||||
Municipal bonds:
|
|||||||||||||||
Taxable
|
$
|
6,924
|
$
|
216
|
$
|
--
|
$
|
7,140
|
9.0
|
%
|
|||||
Tax exempt
|
68,422
|
2,389
|
(64
|
)
|
70,747
|
89.4
|
|||||||||
Total municipal bonds
|
75,346
|
2,605
|
(64
|
)
|
77,887
|
98.4
|
|||||||||
Corporate bonds
|
1,250
|
--
|
(8
|
)
|
1,242
|
1.6
|
|||||||||
$
|
76,596
|
$
|
2,605
|
$
|
(72
|
)
|
$
|
79,129
|
100.0
|
%
|
|||||
December 31, 2010
|
|||||||||||||||
Gross
|
Gross
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
Percent
|
|||||||||||
Cost
|
Gains
|
Losses
|
Value
|
of Total
|
|||||||||||
Municipal bonds:
|
|||||||||||||||
Taxable
|
$
|
5,654
|
$
|
68
|
$
|
(71
|
)
|
$
|
5,651
|
7.6
|
%
|
||||
Tax exempt
|
65,183
|
1,952
|
(106
|
)
|
67,029
|
90.7
|
|||||||||
Total municipal bonds
|
70,837
|
2,020
|
(177
|
)
|
72,680
|
98.3
|
|||||||||
Corporate bonds
|
1,250
|
8
|
(22
|
)
|
1,236
|
1.7
|
|||||||||
$
|
72,087
|
$
|
2,028
|
$
|
(199
|
)
|
$
|
73,916
|
100.0
|
%
|
June 30, 2011
|
||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||
Municipal bonds:
|
||||||||||||||||||
Taxable
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
--
|
||||||
Tax exempt
|
3,629
|
(31
|
)
|
1,828
|
(33
|
)
|
5,457
|
(64
|
)
|
|||||||||
Total municipal bonds
|
3,629
|
(31
|
)
|
1,828
|
(33
|
)
|
5,457
|
(64
|
)
|
|||||||||
Corporate bonds
|
--
|
--
|
492
|
(8
|
)
|
492
|
(8
|
)
|
||||||||||
$
|
3,629
|
$
|
(31
|
)
|
$
|
2,320
|
$
|
(41
|
)
|
$
|
5,949
|
$
|
(72
|
)
|
||||
December 31, 2010
|
||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||
Municipal bonds:
|
||||||||||||||||||
Taxable
|
$
|
3,443
|
$
|
(71
|
)
|
$
|
--
|
$
|
--
|
$
|
3,443
|
$
|
(71
|
)
|
||||
Tax exempt
|
13,301
|
(106
|
)
|
--
|
--
|
13,301
|
(106
|
)
|
||||||||||
Total municipal bonds
|
16,744
|
(177
|
)
|
--
|
--
|
16,744
|
(177
|
)
|
||||||||||
Corporate bonds
|
--
|
--
|
478
|
(22
|
)
|
478
|
(22
|
)
|
||||||||||
$
|
16,744
|
$
|
(177
|
)
|
$
|
478
|
$
|
(22
|
)
|
$
|
17,222
|
$
|
(199
|
)
|
June 30, 2011
|
December 31, 2010
|
||||||||||
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||
Due in one year or less
|
$
|
3,200
|
$
|
3,256
|
$
|
2,297
|
$
|
2,342
|
|||
Due after one year through five years
|
11,834
|
12,358
|
10,634
|
11,145
|
|||||||
Due after five years through ten years
|
11,697
|
12,188
|
15,143
|
15,368
|
|||||||
Due after ten years through twenty years
|
47,775
|
49,140
|
41,832
|
42,765
|
|||||||
Due after twenty years
|
2,090
|
2,187
|
2,181
|
2,296
|
|||||||
$
|
76,596
|
$
|
79,129
|
$
|
72,087
|
$
|
73,916
|
Amortized Cost
|
Fair Value
|
||||
Purpose or beneficiary:
|
|||||
State and local governments public deposits
|
$
|
111,476
|
$
|
114,956
|
|
Interest rate swap counterparties
|
5,363
|
5,481
|
|||
Retail repurchase transaction accounts
|
120,173
|
123,828
|
|||
Other
|
4,250
|
4,446
|
|||
Total pledged securities
|
$
|
241,262
|
$
|
248,711
|
June 30, 2011
|
December 31, 2010
|
June 30, 2010
|
||||||||||||||||
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
|||||||||||||
Commercial real estate
|
||||||||||||||||||
Owner-occupied
|
$
|
507,751
|
15.3
|
%
|
$
|
515,093
|
15.1
|
%
|
$
|
503,796
|
13.9
|
%
|
||||||
Investment properties
|
582,569
|
17.6
|
550,610
|
16.2
|
553,689
|
15.3
|
||||||||||||
Multifamily real estate
|
147,951
|
4.5
|
134,634
|
4.0
|
149,980
|
4.1
|
||||||||||||
Commercial construction
|
35,790
|
1.1
|
62,707
|
1.8
|
84,379
|
2.3
|
||||||||||||
Multifamily construction
|
20,552
|
0.6
|
27,394
|
0.8
|
56,573
|
1.6
|
||||||||||||
One- to four-family construction
|
140,669
|
4.4
|
153,383
|
4.5
|
182,928
|
5.0
|
||||||||||||
Land and land development
|
||||||||||||||||||
Residential
|
128,920
|
3.9
|
167,764
|
4.9
|
228,156
|
6.3
|
||||||||||||
Commercial
|
29,347
|
0.9
|
32,386
|
1.0
|
29,410
|
0.8
|
||||||||||||
Commercial business
|
566,243
|
17.1
|
585,457
|
17.2
|
635,130
|
17.5
|
||||||||||||
Agricultural business, including secured
by farmland
|
208,485
|
6.3
|
204,968
|
6.0
|
208,815
|
5.8
|
||||||||||||
One- to four-family real estate
|
658,216
|
19.9
|
682,924
|
20.1
|
702,420
|
19.3
|
||||||||||||
Consumer
|
97,396
|
2.9
|
99,761
|
2.9
|
103,065
|
2.8
|
||||||||||||
Consumer secured by one- to four-family
|
182,778
|
5.5
|
186,036
|
5.5
|
193,163
|
5.3
|
||||||||||||
Total loans outstanding
|
3,306,667
|
100.0
|
%
|
3,403,117
|
100.0
|
%
|
3,631,504
|
100.0
|
%
|
|||||||||
Less allowance for loan losses
|
(92,000
|
)
|
(97,401
|
)
|
(95,508
|
)
|
||||||||||||
Net loans
|
$
|
3,214,667
|
$
|
3,305,716
|
$
|
3,535,996
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||
Commercial real estate
|
|||||||||||||||
Owner-occupied
|
$
|
383,576
|
$
|
69,389
|
$
|
51,458
|
$
|
3,328
|
$
|
507,751
|
|||||
Investment properties
|
436,279
|
99,304
|
41,016
|
5,970
|
582,569
|
||||||||||
Multifamily real estate
|
120,552
|
17,187
|
9,749
|
463
|
147,951
|
||||||||||
Commercial construction
|
23,267
|
822
|
11,701
|
--
|
35,790
|
||||||||||
Multifamily construction
|
12,514
|
8,038
|
--
|
--
|
20,552
|
||||||||||
One- to four-family construction
|
71,494
|
66,430
|
2,745
|
--
|
140,669
|
||||||||||
Land and land development
|
|||||||||||||||
Residential
|
67,575
|
50,719
|
10,626
|
--
|
128,920
|
||||||||||
Commercial
|
25,286
|
949
|
3,112
|
--
|
29,347
|
||||||||||
Commercial business
|
382,517
|
109,068
|
61,155
|
13,503
|
566,243
|
||||||||||
Agricultural business, including
secured by farmland
|
110,836
|
40,842
|
56,784
|
23
|
208,485
|
||||||||||
One- to four-family real estate
|
416,713
|
211,703
|
27,488
|
2,312
|
658,216
|
||||||||||
Consumer
|
69,094
|
22,734
|
5,568
|
--
|
97,396
|
||||||||||
Consumer secured by one- to four-
family
|
125,771
|
44,070
|
12,439
|
498
|
182,778
|
||||||||||
Total loans
|
$
|
2,245,474
|
$
|
741,255
|
$
|
293,841
|
$
|
26,097
|
$
|
3,306,667
|
|||||
Percent of total loans
|
67.9
|
%
|
22.4
|
%
|
8.9
|
%
|
0.8
|
%
|
100.0
|
%
|
Washington
|
Oregon
|
Idaho
|
Total
|
|||||||||
Residential:
|
||||||||||||
Acquisition and development
|
$
|
32,439
|
$
|
28,568
|
$
|
3,823
|
$
|
64,830
|
||||
Improved land and lots
|
22,026
|
16,592
|
923
|
39,541
|
||||||||
Unimproved land
|
13,110
|
5,559
|
5,880
|
24,549
|
||||||||
Total residential land and development
|
$
|
67,575
|
$
|
50,719
|
$
|
10,626
|
$
|
128,920
|
||||
Commercial and industrial:
|
||||||||||||
Acquisition and development
|
$
|
3,873
|
$
|
--
|
$
|
510
|
$
|
4,383
|
||||
Improved land and lots
|
8,865
|
--
|
200
|
9,065
|
||||||||
Unimproved land
|
12,548
|
949
|
2,402
|
15,899
|
||||||||
Total commercial land development
|
$
|
25,286
|
$
|
949
|
$
|
3,112
|
$
|
29,347
|
June 30
2011
|
December 31
2010
|
June 30
2010
|
||||||
Fixed-rate (term to maturity):
|
||||||||
Due in one year or less
|
$
|
191,252
|
$
|
214,625
|
$
|
187,864
|
||
Due after one year through three years
|
245,203
|
232,412
|
216,061
|
|||||
Due after three years through five years
|
189,938
|
173,533
|
214,659
|
|||||
Due after five years through ten years
|
143,647
|
119,108
|
124,755
|
|||||
Due after ten years
|
512,639
|
530,548
|
551,897
|
|||||
Total fixed-rate loans
|
1,282,679
|
1,270,226
|
1,295,236
|
|||||
Adjustable-rate (term to rate adjustment):
|
||||||||
Due in one year or less
|
1,221,511
|
1,311,679
|
1,452,687
|
|||||
Due after one year through three years
|
435,987
|
428,910
|
457,819
|
|||||
Due after three years through five years
|
331,136
|
356,241
|
382,801
|
|||||
Due after five years through ten years
|
35,354
|
36,061
|
41,760
|
|||||
Due after ten years
|
--
|
--
|
1,201
|
|||||
Total adjustable-rate loans
|
2,023,988
|
2,132,891
|
2,336,268
|
|||||
Total loans
|
$
|
3,306,667
|
$
|
3,403,117
|
$
|
3,631,504
|
June 30, 2011
|
December 31, 2010
|
||||||||||
Loan Amount
|
Allocated Reserves
|
Loan Amount
|
Allocated Reserves
|
||||||||
Impaired loans:
|
|||||||||||
Nonaccrual loans
|
|||||||||||
Commercial real estate
|
$
|
22,421
|
$
|
1,393
|
$
|
24,727
|
$
|
2,151
|
|||
Multifamily
|
1,559
|
332
|
1,889
|
139
|
|||||||
Construction and land
|
53,529
|
6,657
|
75,734
|
6,541
|
|||||||
Commercial business
|
15,264
|
2,011
|
21,100
|
5,332
|
|||||||
Agricultural business, including
secured by farmland
|
1,343
|
35
|
5,853
|
56
|
|||||||
One- to four-family residential
|
15,435
|
319
|
16,869
|
23
|
|||||||
Consumer
|
4,400
|
1,800
|
2,332
|
84
|
|||||||
Total nonaccrual loans
|
113,951
|
12,547
|
148,504
|
14,326
|
|||||||
Past due and still accruing
|
1,294
|
40
|
2,985
|
7
|
|||||||
TDRs
|
55,652
|
2,470
|
60,115
|
4,054
|
|||||||
Total impaired loans
|
$
|
170,897
|
$
|
15,057
|
$
|
211,604
|
$
|
18,387
|
June 30, 2011
|
|||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
|||||||
Without a specific allowance reserve (1)
|
|||||||||
Commercial real estate
|
$
|
3,905
|
$
|
3,905
|
$
|
409
|
|||
Multifamily real estate
|
2,829
|
2,829
|
986
|
||||||
Construction and land
|
9,878
|
10,464
|
1,944
|
||||||
Commercial business
|
4,912
|
5,112
|
1,079
|
||||||
Agricultural business, including secured
by farmland
|
1,055
|
1,480
|
72
|
||||||
One- to four-family residential
|
28,790
|
28,932
|
142
|
||||||
Consumer
|
2,262
|
2,470
|
93
|
||||||
53,631
|
55,192
|
4,725
|
|||||||
With a specific allowance reserve (2)
|
|||||||||
Commercial real estate
|
24,061
|
27,064
|
1,350
|
||||||
Multifamily real estate
|
728
|
948
|
--
|
||||||
Construction and land
|
61,315
|
88,655
|
5,769
|
||||||
Commercial business
|
10,954
|
15,854
|
1,016
|
||||||
Agricultural business, including secured
by farmland
|
832
|
1,052
|
--
|
||||||
One- to four-family residential
|
16,126
|
16,852
|
413
|
||||||
Consumer
|
3,250
|
3,250
|
1,784
|
||||||
117,266
|
153,675
|
10,332
|
|||||||
Total impaired loans
|
|||||||||
Commercial real estate
|
$
|
27,966
|
$
|
30,969
|
$
|
1,759
|
|||
Multifamily real estate
|
3,557
|
3,777
|
986
|
||||||
Construction and land
|
71,193
|
99,119
|
7,713
|
||||||
Commercial business
|
15,866
|
20,966
|
2,095
|
||||||
Agricultural business, including secured
by farmland
|
1,887
|
2,532
|
72
|
||||||
One- to four-family residential
|
44,916
|
45,784
|
555
|
||||||
Consumer
|
5,512
|
5,720
|
1,877
|
||||||
Total
|
$
|
170,897
|
$
|
208,867
|
$
|
15,057
|
December 31, 2010
|
|||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
|||||||
Without a specific allowance reserve (1)
|
|||||||||
Commercial real estate
|
$
|
4,870
|
$
|
5,295
|
$
|
594
|
|||
Multifamily real estate
|
339
|
339
|
68
|
||||||
Construction and land
|
9,758
|
10,237
|
1,955
|
||||||
Commercial business
|
7,558
|
7,576
|
1,044
|
||||||
Agricultural business, including secured
by farmland
|
475
|
900
|
19
|
||||||
One- to four-family residential
|
31,094
|
31,121
|
122
|
||||||
Consumer
|
252
|
252
|
4
|
||||||
54,346
|
55,720
|
3,806
|
|||||||
With a specific allowance reserve (2)
|
|||||||||
Commercial real estate
|
26,384
|
28,048
|
2,320
|
||||||
Multifamily real estate
|
1,471
|
1,471
|
55
|
||||||
Construction and land
|
88,065
|
117,152
|
7,275
|
||||||
Commercial business
|
14,134
|
19,224
|
4,358
|
||||||
Agricultural business, including secured
by farmland
|
5,457
|
8,934
|
37
|
||||||
One- to four-family residential
|
20,736
|
21,791
|
536
|
||||||
Consumer
|
1,011
|
1,011
|
--
|
||||||
157,258
|
197,631
|
14,581
|
|||||||
Total impaired loans
|
|||||||||
Commercial real estate
|
$
|
31,254
|
$
|
33,343
|
$
|
2,914
|
|||
Multifamily real estate
|
1,810
|
1,810
|
123
|
||||||
Construction and land
|
97,823
|
127,389
|
9,230
|
||||||
Commercial business
|
21,692
|
26,800
|
5,402
|
||||||
Agricultural business, including secured
by farmland
|
5,932
|
9,834
|
56
|
||||||
One- to four-family residential
|
51,830
|
52,912
|
658
|
||||||
Consumer
|
1,263
|
1,263
|
4
|
||||||
Total
|
$
|
211,604
|
$
|
253,351
|
$
|
18,387
|
(1)
|
Loans without a specific allowance reserve have not been individually evaluated for impairment, but have been included in pools of homogeneous loans for evaluation of related allowance reserves.
|
(2)
|
Loans with a specific allowance reserve have been individually evaluated for impairment using either a discounted cash flow analysis or, for collateral dependent loans, current appraisals to establish realizable value. These analyses may identify a specific impairment amount needed or may conclude that no reserve is needed. Any specific impairment that is identified is included in the category’s Related Allowance column.
|
The following table provides additional information on the average recorded investment and interest income recognized on impaired loans with and without specific allowance reserves for the three and six-month periods ended June 30, 2011 and 2010 (in thousands):
|
|||||||||||||||||||||||||
Three Months Ended
June 30
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
Six Months Ended
June 30
|
||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
Average
Recorded Investment
|
Interest
Income
Recognized
|
||||||||||||||||||
Without a specific allowance reserve:
|
|||||||||||||||||||||||||
Commercial real estate
|
$
|
4,022
|
$
|
49
|
$
|
5,629
|
$
|
56
|
$
|
4,070
|
$
|
102
|
$
|
5,646
|
$
|
138
|
|||||||||
Multifamily
|
2,833
|
38
|
366
|
10
|
2,838
|
78
|
371
|
20
|
|||||||||||||||||
Construction and land
|
9,912
|
117
|
20,531
|
244
|
10,178
|
231
|
20,777
|
497
|
|||||||||||||||||
Commercial and industrial
|
5,008
|
53
|
9,334
|
68
|
5,212
|
121
|
9,757
|
141
|
|||||||||||||||||
Agricultural business, including
secured by farmland
|
1,059
|
14
|
468
|
--
|
1,177
|
20
|
493
|
--
|
|||||||||||||||||
One- to four-family residential
|
28,858
|
306
|
31,071
|
368
|
28,938
|
643
|
31,129
|
744
|
|||||||||||||||||
Consumer
|
2,410
|
22
|
2,747
|
13
|
2,449
|
43
|
2,766
|
30
|
|||||||||||||||||
54,102
|
599
|
70,146
|
759
|
54,862
|
1,238
|
70,939
|
1,570
|
||||||||||||||||||
With a specific allowance reserve:
|
|||||||||||||||||||||||||
Commercial real estate
|
25,220
|
108
|
5,776
|
43
|
25,634
|
257
|
5,812
|
114
|
|||||||||||||||||
Multifamily
|
875
|
5
|
--
|
--
|
915
|
10
|
--
|
--
|
|||||||||||||||||
Construction and land
|
76,648
|
243
|
136,207
|
262
|
82,251
|
555
|
139,931
|
577
|
|||||||||||||||||
Commercial and industrial
|
11,650
|
3
|
17,098
|
77
|
12,283
|
64
|
18,080
|
149
|
|||||||||||||||||
Agricultural business, including
secured by farmland
|
832
|
--
|
7,782
|
75
|
832
|
--
|
8,139
|
154
|
|||||||||||||||||
One- to four-family residential
|
16,243
|
146
|
16,440
|
51
|
16,335
|
296
|
16,453
|
112
|
|||||||||||||||||
Consumer
|
3,242
|
27
|
720
|
2
|
3,247
|
47
|
720
|
4
|
|||||||||||||||||
134,710
|
532
|
184,023
|
510
|
141,497
|
1,229
|
189,135
|
1,110
|
||||||||||||||||||
Total impaired loans:
|
|||||||||||||||||||||||||
Commercial real estate
|
$
|
29,242
|
$
|
157
|
$
|
11,405
|
$
|
99
|
$
|
29,704
|
$
|
359
|
$
|
11,458
|
$
|
252
|
|||||||||
Multifamily
|
3,708
|
43
|
366
|
10
|
3,753
|
88
|
371
|
20
|
|||||||||||||||||
Construction and land
|
86,560
|
360
|
156,738
|
506
|
92,429
|
786
|
160,708
|
1,074
|
|||||||||||||||||
Commercial and industrial
|
16,658
|
56
|
26,432
|
145
|
17,495
|
185
|
27,837
|
290
|
|||||||||||||||||
Agricultural business, including
secured by farmland
|
1,891
|
14
|
8,250
|
75
|
2,009
|
20
|
8,632
|
154
|
|||||||||||||||||
One- to four-family residential
|
45,101
|
452
|
47,511
|
419
|
45,273
|
939
|
47,582
|
856
|
|||||||||||||||||
Consumer
|
5,652
|
49
|
3,467
|
15
|
5,696
|
90
|
3,486
|
34
|
|||||||||||||||||
Total
|
$
|
188,812
|
$
|
1,131
|
$
|
254,169
|
$
|
1,269
|
$
|
196,359
|
$
|
2,467
|
$
|
260,074
|
$
|
2,680
|
June 30, 2011
|
||||||||||||||||||||||
Commercial Real Estate
|
Multifamily
|
Construction and
Land
|
Commercial Business
|
Agricultural Business
|
One- to Four-
Family Residential
|
Consumer
|
Total Loans
|
|||||||||||||||
Risk-rated loans:
|
||||||||||||||||||||||
Pass (Risk Ratings 1-5) (1)
|
$
|
980,495
|
$ |
129,611
|
$
|
249,561
|
$
|
486,679
|
$
|
201,518
|
$
|
619,158
|
$
|
272,289
|
$
|
2,939,311
|
||||||
Special mention
|
28,263
|
15,301
|
1,725
|
33,704
|
2,152
|
1,287
|
395
|
82,827
|
||||||||||||||
Substandard
|
81,562
|
3,039
|
103,992
|
45,296
|
4,815
|
37,771
|
7,490
|
283,965
|
||||||||||||||
Doubtful
|
--
|
--
|
--
|
564
|
--
|
--
|
--
|
564
|
||||||||||||||
Loss
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||
Total loans
|
$
|
1,090,320
|
$
|
147,951
|
$
|
355,278
|
$
|
566,243
|
$
|
208,485
|
$
|
658,216
|
$
|
280,174
|
$
|
3,306,667
|
||||||
Performing loans
|
$
|
1,067,899
|
$
|
146,391
|
$
|
301,749
|
$
|
550,978
|
$
|
206,598
|
$
|
642,159
|
$
|
275,648
|
$
|
3,191,422
|
||||||
Non-performing loans
|
22,421
|
1,560
|
53,529
|
15,265
|
1,887
|
16,057
|
4,526
|
115,245
|
||||||||||||||
Total loans
|
$
|
1,090,320
|
$
|
147,951
|
$
|
355,278
|
$
|
566,243
|
$
|
208,485
|
$
|
658,216
|
$
|
280,174
|
$
|
3,306,667
|
||||||
December 31, 2010
|
||||||||||||||||||||||
Commercial Real Estate
|
Multifamily
|
Construction and
Land
|
Commercial Business
|
Agricultural Business
|
One- to Four-
Family Residential
|
Consumer
|
Total Loans
|
|||||||||||||||
Risk-rated loans:
|
||||||||||||||||||||||
Pass (Risk Ratings 1-5) (1)
|
$
|
950,889
|
$
|
116,078
|
$
|
281,871
|
$
|
514,204
|
$
|
195,123
|
$
|
645,452
|
$
|
280,511
|
$
|
2,984,128
|
||||||
Special mention
|
31,799
|
16,302
|
16,168
|
17,674
|
1,327
|
1,154
|
248
|
84,672
|
||||||||||||||
Substandard
|
83,015
|
2,254
|
145,595
|
52,713
|
8,352
|
36,318
|
5,038
|
333,285
|
||||||||||||||
Doubtful
|
--
|
--
|
--
|
866
|
166
|
--
|
--
|
1,032
|
||||||||||||||
Loss
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||
Total loans
|
$
|
1,065,703
|
$
|
134,634
|
$
|
443,634
|
$
|
585,457
|
$
|
204,968
|
$
|
682,924
|
$
|
285,797
|
$
|
3,403,117
|
||||||
Performing loans
|
$
|
1,040,976
|
$
|
132,745
|
$
|
367,900
|
$
|
564,357
|
$
|
199,115
|
$
|
663,100
|
$
|
283,435
|
$
|
3,251,628
|
||||||
Non-performing loans
|
24,727
|
1,889
|
75,734
|
21,100
|
5,853
|
19,824
|
2,362
|
151,489
|
||||||||||||||
Total loans
|
$
|
1,065,703
|
$
|
134,634
|
$
|
443,634
|
$
|
585,457
|
$
|
204,968
|
$
|
682,924
|
$
|
285,797
|
$
|
3,403,117
|
(1)
|
The Pass category includes some performing loans that are part of homogenous pools which are not individually risk-rated. This includes all consumer loans, all one- to four-family residential loans and, in the commercial business category, and $38 million of scored business loans. As loans in these pools become non-performing, they are individually risk-rated.
|
June 30, 2011
|
||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater Than
90 Days Past
Due
|
Total Past
Due
|
Current
|
Total Loans
|
Loans 90 Days
or More Past
Due and
Accruing
|
||||||||||||||
Commercial real estate
|
$
|
3,912
|
$
|
1,905
|
$
|
18,216
|
$
|
24,033
|
$
|
1,066,287
|
$
|
1,090,320
|
$
|
--
|
||||||
Multifamily real estate
|
253
|
--
|
1,244
|
1,497
|
146,454
|
147,951
|
--
|
|||||||||||||
Construction and land
|
317
|
2,588
|
47,787
|
50,692
|
304,586
|
355,278
|
--
|
|||||||||||||
Commercial business
|
1,510
|
617
|
10,019
|
12,146
|
554,097
|
566,243
|
1
|
|||||||||||||
Agricultural business, including secured
by farmland
|
--
|
--
|
1,742
|
1,742
|
206,743
|
208,485
|
545
|
|||||||||||||
One-to four-family residential
|
522
|
3,354
|
11,763
|
15,639
|
642,577
|
658,216
|
622
|
|||||||||||||
Consumer
|
1,191
|
153
|
1,770
|
3,114
|
277,060
|
280,174
|
126
|
|||||||||||||
Total
|
$
|
7,705
|
$
|
8,617
|
$
|
92,541
|
$
|
108,863
|
$
|
3,197,804
|
$
|
3,306,667
|
$
|
1,294
|
||||||
December 31, 2010
|
||||||||||||||||||||
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Greater Than
90 Days Past
Due
|
Total Past
Due
|
Current
|
Total Loans
|
Loans 90 Days
or More Past
Due and
Accruing
|
||||||||||||||
Commercial real estate
|
$
|
7,847
|
$
|
8,753
|
$
|
20,584
|
$
|
37,184
|
$
|
1,028,519
|
$
|
1,065,703
|
$
|
--
|
||||||
Multifamily real estate
|
--
|
--
|
1,329
|
1,329
|
133,305
|
134,634
|
--
|
|||||||||||||
Construction and land
|
6,148
|
1,846
|
54,460
|
62,454
|
381,180
|
443,634
|
--
|
|||||||||||||
Commercial business
|
3,939
|
824
|
14,159
|
18,922
|
566,535
|
585,457
|
--
|
|||||||||||||
Agricultural business, including secured
by farmland
|
514
|
3,684
|
3,499
|
7,697
|
197,271
|
204,968
|
--
|
|||||||||||||
One-to four-family residential
|
951
|
6,119
|
17,106
|
24,176
|
658,748
|
682,924
|
2,955
|
|||||||||||||
Consumer
|
1,535
|
1,006
|
1,554
|
4,095
|
281,702
|
285,797
|
30
|
|||||||||||||
Total
|
$
|
20,934
|
$
|
22,232
|
$
|
112,691
|
$
|
155,857
|
$
|
3,247,260
|
$
|
3,403,117
|
$
|
2,985
|
For the Three Months Ended June 30, 2011
|
|||||||||||||||||||||
Commercial
Real Estate and Multifamily
|
Construction
and Land
|
Commercial / Agricultural
Business
|
One- to Four-
Family
Residential
|
Consumer
|
Commitments
and
Unallocated(1)
|
Total
|
|||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||||
Beginning balance
|
$
|
17,926
|
$
|
30,346
|
$
|
23,495
|
$
|
8,149
|
$
|
1,452
|
$
|
16,264
|
$
|
97,632
|
|||||||
Provision for loan losses
|
2,665
|
991
|
1,904
|
1,970
|
221
|
249
|
8,000
|
||||||||||||||
Recoveries
|
15
|
716
|
81
|
29
|
84
|
--
|
925
|
||||||||||||||
Charge-offs
|
(2,115
|
)
|
(6,077
|
)
|
(4,159
|
)
|
(1,894
|
)
|
(312
|
)
|
--
|
(14,557
|
)
|
||||||||
Ending balance
|
$
|
18,491
|
$
|
25,976
|
$
|
21,321
|
$
|
8,254
|
$
|
1,445
|
$
|
16,513
|
$
|
92,000
|
For the Six Months Ended June 30, 2011
|
|||||||||||||||||||||
Commercial
Real Estate and Multifamily
|
Construction
and Land
|
Commercial / Agricultural Business
|
One- to Four-
Family
Residential
|
Consumer
|
Commitments
and
Unallocated(1)
|
Total
|
|||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||||
Beginning balance
|
$
|
15,742
|
$
|
33,121
|
$
|
26,391
|
$
|
5,829
|
$
|
1,794
|
$
|
14,524
|
$
|
97,401
|
|||||||
Provision for loan losses
|
6,265
|
8,718
|
1,418
|
6,447
|
163
|
1,989
|
25,000
|
||||||||||||||
Recoveries
|
15
|
751
|
162
|
81
|
162
|
--
|
1,171
|
||||||||||||||
Charge-offs
|
(3,531
|
)
|
(16,614
|
)
|
(6,650
|
)
|
(4,103
|
)
|
(674
|
)
|
--
|
(31,572
|
)
|
||||||||
Ending balance
|
$
|
18,491
|
$
|
25,976
|
$
|
21,321
|
$
|
8,254
|
$
|
1,445
|
$
|
16,513
|
$
|
92,000
|
At June 30, 2011
|
|||||||||||||||||||||
Allowance individually evaluated for impairment
|
$
|
1,350
|
$
|
5,769
|
$
|
1,016
|
$
|
413
|
$
|
1,784
|
$
|
--
|
$
|
10,332
|
|||||||
Allowance collectively evaluated for impairment
|
17,141
|
20,207
|
20,305
|
7,841
|
(339
|
)
|
16,513
|
81,668
|
|||||||||||||
Total allowance for loan losses
|
$
|
18,491
|
$
|
25,976
|
$
|
21,321
|
$
|
8,254
|
$
|
1,445
|
$
|
16,513
|
$
|
92,000
|
At June 30, 2011
|
|||||||||||||||||||||||||
Loan balances:
|
|||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
24,789
|
$
|
61,315
|
$
|
11,786
|
$
|
16,126
|
$
|
3,250
|
n/a
|
$
|
117,266
|
||||||||||||
Loans collectively evaluated for impairment
|
1,213,482
|
293,963
|
762,942
|
642,090
|
276,924
|
n/a
|
3,189,401
|
||||||||||||||||||
Total loans
|
$
|
1,238,271
|
$
|
355,278
|
$
|
774,728
|
$
|
658,216
|
$
|
280,174
|
n/a
|
$
|
3,306,667
|
For the Three Months Ended June 30, 2010
|
|||||||||||||||||||||
Commercial
Real Estate and Multifamily
|
Construction
and Land
|
Commercial / Agricultural Business
|
One- to Four-
Family
Residential
|
Consumer
|
Commitments
and
Unallocated(1)
|
Total
|
|||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||||
Beginning balance
|
$
|
10,351
|
$
|
44,078
|
$
|
25,479
|
$
|
3,093
|
$
|
1,898
|
$
|
10,834
|
$
|
95,733
|
|||||||
Provision for loan losses
|
(945
|
)
|
13,543
|
943
|
2,494
|
302
|
(337
|
)
|
16,000
|
||||||||||||
Recoveries
|
--
|
235
|
595
|
71
|
69
|
--
|
970
|
||||||||||||||
Charge-offs
|
--
|
(12,255
|
)
|
(2,433
|
)
|
(2,128
|
)
|
(379
|
)
|
--
|
(17,195
|
)
|
|||||||||
Ending balance
|
$
|
9,406
|
$
|
45,601
|
$
|
24,584
|
$
|
3,530
|
$
|
1,890
|
$
|
10,497
|
$
|
95,508
|
For the Six Months Ended June 30, 2010
|
|||||||||||||||||||||
Commercial
Real Estate and Multifamily
|
Construction
and Land
|
Commercial / Agricultural Business
|
One- to Four-
Family
Residential
|
Consumer
|
Commitments
and
Unallocated(1)
|
Total
|
|||||||||||||||
Allowance for loan losses:
|
|||||||||||||||||||||
Beginning balance
|
$
|
8,368
|
$
|
45,209
|
$
|
22,973
|
$
|
2,912
|
$
|
1,809
|
$
|
13,998
|
$
|
95,269
|
|||||||
Provision for loan losses
|
1,130
|
19,749
|
6,945
|
4,790
|
887
|
(3,501
|
)
|
30,000
|
|||||||||||||
Recoveries
|
--
|
622
|
1,885
|
71
|
128
|
--
|
2,706
|
||||||||||||||
Charge-offs
|
(92
|
)
|
(19,979
|
)
|
(7,219
|
)
|
(4,243
|
)
|
(934
|
)
|
--
|
(32,467
|
)
|
||||||||
Ending balance
|
$
|
9,406
|
$
|
45,601
|
$
|
24,584
|
$
|
3,530
|
$
|
1,890
|
$
|
10,497
|
$
|
95,508
|
At June 30, 2010
|
|||||||||||||||||||||
Allowance individually evaluated for impairment
|
$
|
156
|
$
|
11,533
|
$
|
4,018
|
$
|
890
|
$
|
219
|
$
|
--
|
$ |
16,816
|
|||||||
Allowance collectively evaluated for impairment
|
9,250
|
34,068
|
20,566
|
2,640
|
1,671
|
10,497
|
78,692
|
||||||||||||||
Total allowance for loan losses
|
$
|
9,406
|
$
|
45,601
|
$
|
24,584
|
$
|
3,530
|
$
|
1,890
|
$
|
10,497
|
$
|
95,508
|
At June 30, 2010
|
|||||||||||||||||||||||||
Loan balances:
|
|||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
5,750
|
$
|
108,520
|
$
|
21,676
|
$
|
15,140
|
$
|
1,991
|
n/a
|
$
|
153,077
|
||||||||||||
Loans collectively evaluated for impairment
|
1,201,715
|
472,926
|
822,269
|
687,280
|
294,237
|
n/a
|
3,478,427
|
||||||||||||||||||
Total loans
|
$
|
1,207,465
|
$
|
581,446
|
$
|
843,945
|
$
|
702,420
|
$
|
296,228
|
n/a
|
$
|
3,631,504
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||
Balance, beginning of the period
|
$
|
94,945
|
$
|
95,074
|
$
|
100,872
|
$
|
77,743
|
||||
Additions from loan foreclosures
|
11,918
|
17,885
|
26,834
|
45,212
|
||||||||
Additions from capitalized costs
|
1,532
|
380
|
3,147
|
1,516
|
||||||||
Dispositions of REO
|
(32,437
|
)
|
(10,532
|
)
|
(51,331
|
)
|
(20,411
|
)
|
||||
Gain (loss) on sale of REO
|
58
|
(498
|
)
|
(479
|
)
|
(1,235
|
)
|
|||||
Valuation adjustments in the period
|
(4,811
|
)
|
(824
|
)
|
(7,838
|
)
|
(1,340
|
)
|
||||
Balance, end of the period
|
$
|
71,205
|
$
|
101,485
|
$
|
71,205
|
$
|
101,485
|
Washington
|
Oregon
|
Idaho
|
Total
|
||||||||
Commercial real estate
|
$
|
1,533
|
$
|
13
|
$
|
477
|
$
|
2,023
|
|||
One- to four-family construction
|
472
|
3,646
|
--
|
4,118
|
|||||||
Land development- commercial
|
3,876
|
4,065
|
200
|
8,141
|
|||||||
Land development- residential
|
18,787
|
18,763
|
3,400
|
40,950
|
|||||||
Agricultural land
|
--
|
256
|
850
|
1,106
|
|||||||
One- to four-family real estate
|
6,729
|
6,084
|
2,054
|
14,867
|
|||||||
Balance, end of period
|
$
|
31,397
|
$
|
32,827
|
$
|
6,981
|
$
|
71,205
|
Core Deposit Intangibles
|
Other
|
Total
|
|||||||
Balance, December 31, 2010
|
$
|
8,598
|
$
|
11
|
$
|
8,609
|
|||
Amortization
|
(1,166
|
)
|
(1
|
)
|
(1,167
|
)
|
|||
Impairment write-off
|
--
|
--
|
--
|
||||||
Balance, June 30, 2011
|
$
|
7,432
|
$
|
10
|
$
|
7,442
|
Core Deposit Intangibles
|
Other
|
Total
|
|||||||
Balance, December 31, 2009
|
$
|
11,057
|
$
|
13
|
$
|
11,070
|
|||
Amortization
|
(2,459
|
)
|
(2
|
)
|
(2,461
|
)
|
|||
Impairment write-off
|
--
|
--
|
--
|
||||||
Balance, December 31, 2010
|
$
|
8,598
|
$
|
11
|
$
|
8,609
|
Year Ended
|
Core Deposit
Intangibles
|
Other
|
Total
|
||||||
December 31, 2011
|
$
|
2,276
|
$
|
2
|
$
|
2,278
|
|||
December 31, 2012
|
2,092
|
2
|
2,094
|
||||||
December 31, 2013
|
1,908
|
2
|
1,910
|
||||||
December 31, 2014
|
1,724
|
2
|
1,726
|
||||||
Thereafter
|
598
|
3
|
601
|
||||||
$
|
8,598
|
$
|
11
|
$
|
8,609
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||
Balance, beginning of the period
|
$
|
5,320
|
$
|
5,562
|
$
|
5,441
|
$
|
5,703
|
||||
Amounts capitalized
|
385
|
161
|
653
|
417
|
||||||||
Amortization (1)
|
(336
|
)
|
(408
|
)
|
(725
|
)
|
(805
|
)
|
||||
Valuation adjustments in the period
|
--
|
--
|
--
|
--
|
||||||||
Balance, end of the period
|
$
|
5,369
|
$
|
5,315
|
$
|
5,369
|
$
|
5,315
|
June 30
2011
|
December 31
2010
|
June 30
2010
|
||||||||||||||||
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
Amount
|
Percent
of Total
|
|||||||||||||
Non-interest-bearing accounts
|
$
|
645,778
|
18.6
|
%
|
$
|
600,457
|
16.7
|
%
|
$
|
548,251
|
14.3
|
%
|
||||||
Interest-bearing checking
|
356,321
|
10.3
|
357,702
|
10.0
|
368,418
|
9.6
|
||||||||||||
Regular savings accounts
|
631,688
|
18.2
|
616,512
|
17.2
|
593,591
|
15.4
|
||||||||||||
Money market accounts
|
434,281
|
12.5
|
459,034
|
12.8
|
441,222
|
11.5
|
||||||||||||
Total transaction and saving accounts
|
2,068,068
|
59.6
|
2,033,705
|
56.7
|
1,951,482
|
50.8
|
||||||||||||
Certificates which mature or reprice:
|
||||||||||||||||||
Within 1 year
|
1,092,682
|
31.6
|
1,185,405
|
33.0
|
1,605,190
|
41.8
|
||||||||||||
After 1 year, but within 3 years
|
242,987
|
7.0
|
314,532
|
8.7
|
241,639
|
6.3
|
||||||||||||
After 3 years
|
62,663
|
1.8
|
57,556
|
1.6
|
40,684
|
1.1
|
||||||||||||
Total certificate accounts
|
1,398,332
|
40.4
|
1,557,493
|
43.3
|
1,887,513
|
49.2
|
||||||||||||
Total deposits
|
$
|
3,466,400
|
100.0
|
%
|
$
|
3,591,198
|
100.0
|
%
|
$
|
3,838,995
|
100.0
|
%
|
||||||
Included in total deposits:
|
||||||||||||||||||
Public fund transaction accounts
|
$
|
72,181
|
2.0
|
%
|
$
|
64,482
|
1.8
|
%
|
$
|
85,292
|
2.2
|
%
|
||||||
Public fund interest-bearing certificates
|
69,219
|
2.0
|
81,809
|
2.3
|
81,668
|
2.1
|
||||||||||||
Total public deposits
|
$
|
141,400
|
4.0
|
%
|
$
|
146,291
|
4.1
|
%
|
$
|
166,960
|
4.3
|
%
|
||||||
Total brokered deposits
|
$
|
73,161
|
2.1
|
%
|
$
|
102,984
|
2.9
|
%
|
$
|
145,571
|
3.8
|
%
|
Washington
|
Oregon
|
Idaho
|
Total
|
|||||||||
Total deposits
|
$
|
2,646,712
|
$
|
591,519
|
$
|
228,169
|
$
|
3,466,400
|
June 30
2011
|
December 31
2010
|
June 30
2010
|
||||||
Retail repurchase agreements
|
$
|
85,822
|
$
|
125,140
|
$
|
122,755
|
·
|
Level 1 – Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.
|
·
|
Level 2 – Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data.
|
·
|
Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs from non-binding single dealer quotes not corroborated by observable market data.
|
·
|
The securities assets primarily consist of U.S. Government and agency obligations, municipal bonds, corporate bonds, single issue trust preferred securities (TPS), pooled trust preferred collateralized debit obligation securities (TRUP CDO), mortgage-backed securities, equity securities and certain other financial instruments. The Level 1 measurements are based upon quoted prices in active markets. The Level 2 measurements are generally based upon a matrix pricing model from an investment reporting and valuation service. Matrix pricing is a mathematical technique used principally to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. The Level 3 measurements are based primarily on unobservable inputs. In developing Level 3 measurements, management incorporates whatever market data might be available and uses discounted cash flow models where appropriate. These calculations include projections of future cash flows, including appropriate default and loss assumptions, and market based discount rates.
|
o
|
The few observable transactions and market quotations that were available were not reliable for purposes of determining fair value,
|
o
|
An income valuation approach technique (present value technique) that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs was equally or more representative of fair value than the market approach valuation technique used at measurement dates prior to 2008, and
|
o
|
The Company’s TRUP CDOs should be classified exclusively within Level 3 of the fair value hierarchy because of the significant assumptions required to determine fair value at the measurement date.
|
·
|
Fair valuations for FHLB advances are estimated using fair market values provided by the lender, the FHLB of Seattle. The FHLB of Seattle prices advances by discounting the future contractual cash flows for individual advances using its current cost of funds curve to provide the discount rate. Management considers this to be a Level 2 input method.
|
·
|
The fair valuations of junior subordinated debentures (TPS debt that the Company has issued) were valued using discounted cash flows to maturity or to the next available call date, if based upon the current interest rate and credit market environment it was considered likely that the Company would elect early redemption. The majority, $98 million, of these debentures carry interest rates that reset quarterly, using the three-month LIBOR index plus spreads of 1.38% to 3.35%. The remaining $26 million issue has a current interest rate of 6.56%, which is fixed until December 15, 2011 and then resets quarterly to equal three-month LIBOR plus a spread of 1.62%. In valuing the debentures at June 30, 2011, management evaluated discounted cash flows to maturity and for the discount rate used the June 30, 2011 three-month LIBOR plus 800 basis points, which resulted in a $409,000 decrease in fair value during the second quarter of 2011. While the quarterly reset of the index on this debt would seemingly keep it close to market values, the disparity in the fixed spreads above the index and the inability to determine realistic current market spreads, due to lack of new issuances and trades, resulted in having to rely more heavily on assumptions about what spread would be appropriate if market transactions were to take place. Due to this reliance on assumptions and not on directly observable transactions, management considers this to be a Level 3 input method.
|
June 30, 2011
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||
Assets:
|
||||||||||||
Securities—available-for-sale
|
||||||||||||
U.S. Government and agency
|
$
|
--
|
$
|
212,440
|
$
|
--
|
$
|
212,440
|
||||
Municipal bonds
|
--
|
16,100
|
16,100
|
|||||||||
Corporate bonds
|
--
|
22,703
|
--
|
22,703
|
||||||||
Mortgage-backed securities
|
--
|
36,012
|
--
|
36,012
|
||||||||
--
|
287,255
|
--
|
287,255
|
|||||||||
Securities—trading
|
||||||||||||
U.S. Government and agency
|
--
|
4,321
|
--
|
4,321
|
||||||||
Municipal bonds
|
--
|
6,356
|
--
|
6,356
|
||||||||
TPS and TRUP CDOs
|
--
|
5,106
|
30,728
|
35,834
|
||||||||
Mortgage-backed securities
|
--
|
42,217
|
--
|
42,217
|
||||||||
Equity securities and other
|
--
|
646
|
--
|
646
|
||||||||
--
|
58,646
|
30,728
|
89,374
|
|||||||||
$
|
--
|
$
|
345,901
|
$
|
30,728
|
$
|
376,629
|
|||||
Liabilities
|
||||||||||||
Advances from FHLB at fair value
|
$
|
--
|
$
|
10,572
|
$
|
--
|
$
|
10,572
|
||||
Junior subordinated debentures net of unamortized deferred issuance costs at fair value
|
--
|
-
|
--
|
47,986
|
47,986
|
|||||||
$
|
--
|
$
|
10,572
|
$
|
47,986
|
$
|
58,558
|
December 31, 2010
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||
Assets:
|
||||||||||||
Securities—available-for-sale
|
||||||||||||
U.S. Government and agency
|
$
|
--
|
$
|
135,428
|
$
|
--
|
$
|
135,428
|
||||
Municipal bonds
|
--
|
5,396
|
5,396
|
|||||||||
Corporate bonds
|
--
|
22,522
|
--
|
22,522
|
||||||||
Mortgage-backed securities
|
--
|
36,881
|
--
|
36,881
|
||||||||
--
|
200,227
|
--
|
200,227
|
|||||||||
Securities—trading
|
||||||||||||
U.S. Government and agency
|
--
|
4,379
|
--
|
4,379
|
||||||||
Municipal bonds
|
--
|
6,398
|
--
|
6,398
|
||||||||
TPS and TRUP CDOs
|
--
|
5,063
|
29,661
|
34,724
|
||||||||
Mortgage-backed securities
|
--
|
49,688
|
--
|
49,688
|
||||||||
Equity securities and other
|
--
|
190
|
--
|
190
|
||||||||
--
|
65,718
|
29,661
|
95,379
|
|||||||||
$
|
--
|
$
|
265,945
|
$
|
29,661
|
$
|
295,606
|
|||||
Liabilities
|
||||||||||||
Advances from FHLB at fair value
|
$
|
--
|
$
|
43,523
|
$
|
--
|
$
|
43,523
|
||||
Junior subordinated debentures net of unamortized deferred issuance costs at fair value
|
--
|
-
|
--
|
48,425
|
48,425
|
|||||||
$
|
--
|
$
|
43,523
|
$
|
48,425
|
$
|
91,948
|
Six Months Ended June 30, 2011
Level 3 Fair Value Inputs
|
||||||
TPS and TRUP
CDOs
|
Borrowings—
Junior Subordinated
Debentures
|
|||||
Beginning balance at December 31, 2010
|
$
|
29,661
|
$
|
48,425
|
||
Total gains or losses recognized
|
||||||
Assets gains (losses), including OTTI
|
1,109
|
--
|
||||
Liabilities (gains) losses
|
--
|
(439
|
)
|
|||
Purchases, issuances and settlements
|
--
|
--
|
||||
Paydowns and maturities
|
(42
|
)
|
--
|
|||
Transfers in and/or out of Level 3
|
--
|
--
|
||||
Ending balance at June 30, 2011
|
$
|
30,728
|
$
|
47,986
|
||
Six Months Ended June 30, 2010
Level 3 Fair Value Inputs
|
||||||
TPS and TRUP
CDOs
|
Borrowings—
Junior Subordinated
Debentures
|
|||||
Beginning balance at December 31, 2009
|
$
|
30,192
|
$
|
47,694
|
||
Total gains or losses recognized
|
||||||
Assets gains (losses), including OTTI
|
398
|
--
|
||||
Liabilities (gains) losses
|
--
|
2,114
|
||||
Purchases, issuances and settlements
|
--
|
--
|
||||
Transfers in and/or out of Level 3
|
--
|
--
|
||||
Ending balance at June 30, 2010
|
$
|
30,590
|
$
|
49,808
|
At or For the Six Months Ended June 30, 2011
|
||||||||||||||
Fair Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Losses
Recognized
During the
Period
|
||||||||||
Impaired loans
|
$
|
60,736
|
$
|
--
|
$
|
--
|
$
|
60,736
|
$
|
(14,265)
|
||||
REO
|
71,205
|
--
|
--
|
71,205
|
(7,276)
|
|||||||||
Mortgage servicing rights
|
5,369
|
--
|
--
|
5,369
|
--
|
|||||||||
At or For the Year Ended December 31, 2010
|
||||||||||||||
Fair Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Losses
Recognized
During the
Period
|
||||||||||
Impaired loans
|
$
|
75,827
|
$
|
--
|
$
|
--
|
$
|
75,827
|
$
|
(34,140)
|
||||
REO
|
100,872
|
--
|
--
|
100,872
|
(18,029)
|
|||||||||
Mortgage servicing rights
|
5,441
|
--
|
--
|
5,441
|
--
|
June 30, 2011
|
December 31, 2010
|
|||||||||||
Carrying
Value
|
Estimated Fair
Value
|
Carrying
Value
|
Estimated Fair
Value
|
|||||||||
Assets:
|
||||||||||||
Cash and due from banks
|
$
|
216,444
|
$
|
216,444
|
$
|
361,652
|
$
|
361,652
|
||||
Securities—trading
|
89,374
|
89,374
|
95,379
|
95,379
|
||||||||
Securities—available-for-sale
|
287,255
|
287,255
|
200,227
|
200,227
|
||||||||
Securities—held-to-maturity
|
76,596
|
79,129
|
72,087
|
73,916
|
||||||||
Loans receivable held for sale
|
1,907
|
1,932
|
3,492
|
3,537
|
||||||||
Loans receivable
|
3,212,760
|
3,206,857
|
3,302,224
|
3,227,429
|
||||||||
FHLB stock
|
37,371
|
37,371
|
37,371
|
37,371
|
||||||||
Bank-owned life insurance
|
57,578
|
57,578
|
56,653
|
56,653
|
||||||||
Mortgage servicing rights
|
5,369
|
5,369
|
5,441
|
5,441
|
||||||||
Liabilities:
|
||||||||||||
Demand, NOW and money market accounts
|
1,436,380
|
1,337,466
|
1,417,193
|
1,317,022
|
||||||||
Regular savings
|
631,688
|
585,071
|
616,512
|
572,356
|
||||||||
Certificates of deposit
|
1,398,332
|
1,406,089
|
1,557,493
|
1,562,850
|
||||||||
FHLB advances at fair value
|
10,572
|
10,572
|
43,523
|
43,523
|
||||||||
Junior subordinated debentures at fair value
|
47,986
|
47,986
|
48,425
|
48,425
|
||||||||
Other borrowings
|
136,285
|
136,285
|
175,813
|
175,813
|
||||||||
Off-balance-sheet financial instruments:
|
||||||||||||
Commitments to originate loans
|
43
|
43
|
310
|
310
|
||||||||
Commitments to sell loans
|
(43
|
)
|
(43
|
)
|
(310
|
)
|
(310
|
)
|
June 30
|
December 31
|
|||||
2011
|
2010
|
|||||
Deferred tax assets:
|
||||||
REO and loan loss reserves
|
$
|
39,308
|
$
|
40,652
|
||
Deferred compensation
|
6,566
|
6,765
|
||||
Net operating loss carryforward
|
26,016
|
21,161
|
||||
Low income housing tax credits
|
3,739
|
3,319
|
||||
Other
|
--
|
--
|
||||
Total deferred tax assets
|
75,629
|
71,897
|
||||
Deferred tax liabilities:
|
||||||
FHLB stock dividends
|
(6,230
|
)
|
(6,230
|
)
|
||
Depreciation
|
(3,939
|
)
|
(4,405
|
)
|
||
Deferred loan fees, servicing rights and loan origination costs
|
(4,620
|
)
|
(4,646
|
)
|
||
Intangibles
|
(2,630
|
)
|
(3,041
|
)
|
||
Financial instruments accounted for under fair value accounting
|
(17,782
|
)
|
(16,983
|
)
|
||
Other
|
(264
|
)
|
--
|
|||
Total deferred tax liabilities
|
(35,465
|
)
|
(35,305
|
)
|
||
Deferred income tax asset
|
40,164
|
36,592
|
||||
Unrealized gain on securities available-for-sale
|
(884
|
)
|
(421
|
)
|
||
Valuation allowance
|
(39,280
|
)
|
(36,171
|
)
|
||
Deferred tax asset, net
|
$
|
--
|
$
|
--
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income (loss)
|
$ | 2,199 | $ | (4,946 | ) | $ | (5,643 | ) | $ | (6,463 | ) | |||||
Preferred stock dividend accrual
|
1,550 | 1,550 | 3,100 | 3,100 | ||||||||||||
Preferred stock discount accretion
|
425 | 399 | 851 | 797 | ||||||||||||
Net income (loss) available to common shareholders
|
$ | 224 | $ | (6,895 | ) | $ | (9,594 | ) | $ | (10,360 | ) | |||||
Basic weighted average shares outstanding
|
16,535 | 3,493 | 16,404 | 3,328 | ||||||||||||
Plus MRP, common stock options and common stock warrants
considered outstanding for diluted EPS
|
-- | -- | -- | -- | ||||||||||||
Less dilutive shares not included as they are anti-dilutive
for calculations of loss per share
|
-- | -- | -- | -- | ||||||||||||
16,535 | 3,493 | 16,404 | 3,328 | |||||||||||||
Earnings (loss) per common share
|
||||||||||||||||
Basic
|
$ | 0.01 | $ | (1.97 | ) | $ | (0.58 | ) | $ | (3.11 | ) | |||||
Diluted
|
$ | 0.01 | $ | (1.97 | ) | $ | (0.58 | ) | $ | (3.11 | ) |
Contract or
Notional
Amount
|
||
Financial instruments whose contract amounts represent credit risk:
|
||
Commitments to extend credit
|
||
Real estate secured for commercial, construction or land development
|
$
|
116,492
|
Revolving open-end lines secured by one-to four- family residential properties
|
118,170
|
|
Credit card lines
|
68,543
|
|
Other, primarily business and agricultural loans
|
481,472
|
|
Real estate secured by one- to four-family residential properties
|
23,778
|
|
Standby letters of credit and financial guarantees
|
7,800
|
|
Total commitments
|
$
|
816,255
|
Commitments to sell loans secured by one- to four-family residential properties
|
$
|
23,778
|
June 30
2011
|
December 31
2010
|
|||||
Notional amount
|
$
|
26,083
|
$
|
19,213
|
||
Weighted average pay rate
|
5.34
|
%
|
5.36
|
%
|
||
Weighted average receive rate
|
1.57
|
%
|
0.26
|
%
|
||
Weighted average maturity in years
|
6.9
|
6.9
|
||||
Unrealized gain included in total loans
|
2,970
|
2,796
|
||||
Unrealized gain included in other assets
|
159
|
--
|
||||
Unrealized loss included in other liabilities
|
$
|
3,129
|
$
|
2,796
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Total other operating income
|
$ | 9,253 | $ | 6,186 | $ | 16,499 | $ | 13,910 | ||||||||
Less other-than-temporary impairment losses
|
-- | -- | -- | 1,231 | ||||||||||||
Less change in valuation of financial instruments carried at fair value
|
(1,939 | ) | 821 | (2,195 | ) | (1,087 | ) | |||||||||
Total other operating income, excluding fair value adjustments and OTTI
|
$ | 7,314 | $ | 7,007 | $ | 14,304 | $ | 14,054 | ||||||||
Net interest income before provision for loan losses
|
$ | 41,201 | $ | 38,941 | $ | 81,257 | $ | 77,091 | ||||||||
Total other operating income
|
9,253 | 6,186 | 16,499 | 13,910 | ||||||||||||
Less other-than-temporary impairment losses
|
-- | -- | -- | 1,231 | ||||||||||||
Less change in valuation of financial instruments carried at fair value
|
(1,939 | ) | 821 | (2,195 | ) | (1,087 | ) | |||||||||
Total revenue, excluding fair value adjustments and OTTI
|
$ | 48,515 | $ | 45,948 | $ | 95,561 | $ | 91,145 | ||||||||
Net income (loss)
|
$ | 2,199 | $ | (4,946 | ) | $ | (5,643 | ) | $ | (6,463 | ) | |||||
Less other-than-temporary impairment losses
|
-- | -- | -- | 1,231 | ||||||||||||
Less change in valuation of financial instruments carried at fair value
|
(1,939 | ) | 821 | (2,195 | ) | (1,087 | ) | |||||||||
Less related tax expense (benefit)
|
-- | (296 | ) | -- | (52 | ) | ||||||||||
Total earnings (loss), excluding fair adjustments and OTTI
and related tax effects
|
$ | 260 | $ | (4,421 | ) | $ | (7,838 | ) | $ | (6,371 | ) |
June 30
2011
|
December 31
2010
|
June 30
2010
|
|||||||
Stockholders’ equity
|
$
|
511,026
|
$
|
511,472
|
$
|
553,958
|
|||
Less other intangible assets, net
|
7,442
|
8,609
|
9,811
|
||||||
Tangible equity
|
503,584
|
502,863
|
544,147
|
||||||
Preferred equity
|
119,851
|
119,000
|
118,204
|
||||||
Tangible common stockholders’ equity
|
$
|
383,733
|
$
|
383,863
|
$
|
425,943
|
|||
Total assets
|
$
|
4,206,067
|
$
|
4,406,082
|
$
|
4,701,606
|
|||
Less other intangible assets, net
|
7,442
|
8,609
|
9,811
|
||||||
Tangible assets
|
$
|
4,198,625
|
$
|
4,397,473
|
$
|
4,691,795
|
|||
Tangible common stockholders’ equity to tangible assets (1)
|
9.14
|
%
|
8.73
|
%
|
9.08
|
%
|
(1)
|
The ratio of tangible common stockholders’ equity to tangible assets is a non-GAAP financial measure. We calculate tangible common equity by excluding the balance of goodwill, other intangible assets and preferred equity from stockholders’ equity. We calculate tangible assets by excluding the balance of goodwill and other intangible assets from total assets. We believe that this is consistent with the treatment by our bank regulatory agencies, which exclude goodwill and other intangible assets from the calculation of risk-based capital ratios. In addition, excluding preferred equity, the level of which may vary from company to company, allows investors to more easily compare our capital adequacy to other companies in the industry that also use this measure. Management believes that this non-GAAP financial measure provides information to investors that is useful in understanding the basis of our capital position. However, this non-GAAP financial measure is supplemental and is not a substitute for any analysis based on GAAP. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures as calculated by other companies.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
Average Balances
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Interest-bearing deposits
|
$ | 196,211 | $ | 216,576 | $ | 252,094 | $ | 194,188 | ||||||||
Investment securities
|
397,898 | 262,554 | 372,195 | 261,266 | ||||||||||||
Mortgage-backed obligations
|
76,004 | 91,142 | 78,667 | 94,229 | ||||||||||||
FHLB stock
|
37,371 | 37,371 | 37,371 | 37,371 | ||||||||||||
Total average interest-earning securities and cash equivalents
|
707,484 | 607,643 | 740,327 | 587,014 | ||||||||||||
Loans receivable
|
3,333,102 | 3,677,140 | 3,341,487 | 3,701,552 | ||||||||||||
Total average interest-earning assets
|
4,040,586 | 4,284,783 | 4,081,814 | 4,288,566 | ||||||||||||
Non-interest-earning assets (including fair value adjustments on
interest-earning assets)
|
215,494 | 268,864 | 224,414 | 262,193 | ||||||||||||
Total average assets
|
$ | 4,256,080 | $ | 4,553,647 | $ | 4,306,228 | $ | 4,550,759 | ||||||||
Deposits
|
$ | 3,504,884 | $ | 3,830,659 | $ | 3,532,796 | $ | 3,815,798 | ||||||||
Advances from FHLB
|
10,220 | 46,026 | 19,228 | 57,299 | ||||||||||||
Other borrowings
|
149,242 | 180,255 | 159,668 | 180,563 | ||||||||||||
Junior subordinated debentures
|
123,716 | 123,716 | 123,716 | 123,716 | ||||||||||||
Total average interest-bearing liabilities
|
3,788,062 | 4,180,656 | 3,835,408 | 4,177,376 | ||||||||||||
Non-interest-bearing liabilities (including fair value adjustments on
interest-bearing liabilities)
|
(41,253 | ) | (38,527 | ) | (40,508 | ) | (37,498 | ) | ||||||||
Total average liabilities
|
3,746,809 | 4,142,129 | 3,794,900 | 4,139,878 | ||||||||||||
Equity
|
509,271 | 411,518 | 511,328 | 410,881 | ||||||||||||
Total average liabilities and equity
|
$ | 4,256,080 | $ | 4,553,647 | $ | 4,306,228 | $ | 4,550,759 | ||||||||
Interest Rate Yield/Expense (rates are annualized)
|
||||||||||||||||
Interest Rate Yield:
|
||||||||||||||||
Interest-bearing deposits
|
0.20 | % | 0.23 | % | 0.22 | % | 0.23 | % | ||||||||
Investment securities
|
2.10 | 3.04 | 2.14 | 3.07 | ||||||||||||
Mortgage-backed obligations
|
4.53 | 4.60 | 4.44 | 4.65 | ||||||||||||
FHLB stock
|
0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
Total interest rate yield on securities and cash equivalents
|
1.72 | 2.09 | 1.62 | 2.19 | ||||||||||||
Loans receivable
|
5.64 | 5.72 | 5.65 | 5.73 | ||||||||||||
Total interest rate yield on interest-earning assets
|
4.95 | 5.21 | 4.92 | 5.25 | ||||||||||||
Interest Rate Expense:
|
||||||||||||||||
Deposits
|
0.80 | 1.54 | 0.85 | 1.61 | ||||||||||||
Advances from FHLB
|
2.51 | 2.79 | 2.54 | 2.40 | ||||||||||||
Other borrowings
|
1.53 | 1.39 | 1.45 | 1.41 | ||||||||||||
Junior subordinated debentures
|
3.38 | 3.39 | 3.39 | 3.38 | ||||||||||||
Total interest rate expense on interest-bearing liabilities
|
0.92 | 1.60 | 0.96 | 1.67 | ||||||||||||
Interest spread
|
4.03 | % | 3.61 | % | 3.96 | % | 3.58 | % | ||||||||
Net interest margin on interest earning assets
|
4.09 | % | 3.65 | % | 4.01 | % | 3.62 | % | ||||||||
Additional Key Financial Ratios (ratios are annualized)
|
||||||||||||||||
Return (loss) on average assets
|
0.21 | % | (0.44 | )% | (0.26 | )% | (0.29 | )% | ||||||||
Return (loss) on average equity
|
1.73 | (4.82 | ) | (2.23 | ) | (3.17 | ) | |||||||||
Average equity / average assets
|
11.97 | 9.04 | 11.87 | 9.03 | ||||||||||||
Average interest-earning assets / interest-bearing liabilities
|
106.67 | 102.49 | 106.42 | 102.66 | ||||||||||||
Non-interest (other operating) income/average assets
|
0.87 | 0.54 | 0.77 | 0.62 | ||||||||||||
Non-interest (other operating) expenses / average assets
|
3.79 | 3.35 | 3.67 | 3.25 | ||||||||||||
Efficiency ratio (1)
|
79.79 | 84.26 | 80.20 | 80.70 | ||||||||||||
Tangible common stockholders’ equity to tangible assets (2)
|
9.14 | 9.08 | 9.14 | 9.08 |
(1)
|
Other operating expense divided by the total of net interest income (before provision for loan losses) and other operating income (non-interest income)
|
June 30
2011
|
December 31
2010
|
June 30
2010
|
|||||||
Nonaccrual Loans: (1)
|
|||||||||
Secured by real estate:
|
|||||||||
Commercial
|
$
|
22,421
|
$
|
24,727
|
$
|
9,433
|
|||
Multifamily
|
1,560
|
1,889
|
363
|
||||||
Construction and land
|
53,529
|
75,734
|
110,931
|
||||||
One- to four-family
|
15,435
|
16,869
|
19,878
|
||||||
Commercial business
|
15,264
|
21,100
|
23,474
|
||||||
Agricultural business, including secured by farmland
|
1,342
|
5,853
|
7,556
|
||||||
Consumer
|
4,400
|
2,332
|
3,588
|
||||||
113,951
|
148,504
|
175,223
|
|||||||
Loans more than 90 days delinquent, still on accrual:
|
|||||||||
Secured by real estate:
|
|||||||||
Commercial
|
--
|
--
|
1,137
|
||||||
Multifamily
|
--
|
--
|
--
|
||||||
Construction and land
|
--
|
--
|
692
|
||||||
One- to four-family
|
622
|
2,955
|
772
|
||||||
Commercial business
|
1
|
--
|
--
|
||||||
Agricultural business, including secured by farmland
|
545
|
--
|
--
|
||||||
Consumer
|
126
|
30
|
118
|
||||||
1,294
|
2,985
|
2,719
|
|||||||
Total non-performing loans
|
115,245
|
151,489
|
177,942
|
||||||
Securities on nonaccrual at fair value
|
1,896
|
1,896
|
3,500
|
||||||
REO and other repossessed assets held for sale, net
|
71,265
|
100,945
|
101,701
|
||||||
Total non-performing assets
|
$
|
188,406
|
$
|
254,330
|
$
|
283,143
|
|||
Total non-performing loans to net loans before allowance for loan losses
|
3.49
|
%
|
4.45
|
%
|
4.90
|
%
|
|||
Total non-performing loans to total assets
|
2.74
|
%
|
3.44
|
%
|
3.78
|
%
|
|||
Total non-performing assets to total assets
|
4.48
|
%
|
5.77
|
%
|
6.02
|
%
|
|||
TDRs (2)
|
$
|
55,652
|
$
|
60,115
|
$
|
43,899
|
|||
Loans 30-89 days past due and on accrual
|
$
|
11,560
|
$
|
28,847
|
$
|
26,050
|
(1) | For the three and six months ended June 30, 2011, interest income of $2.3 million and $5.1 million, respectively, would have been recorded had nonaccrual loans been current, and no interest income on these loans was included in net income for this period. |
(2) |
These loans are performing under their restructured terms.
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||
Secured by real estate:
|
|||||||||||||||
Commercial
|
$
|
17,852
|
$
|
477
|
$
|
4,092
|
$
|
--
|
$
|
22,421
|
|||||
Multifamily
|
1,560
|
--
|
--
|
--
|
1,560
|
||||||||||
Construction and land
|
|||||||||||||||
One- to four-family construction
|
6,486
|
3,082
|
641
|
--
|
10,209
|
||||||||||
Multifamily construction
|
--
|
648
|
--
|
--
|
648
|
||||||||||
Commercial construction
|
1,510
|
--
|
--
|
--
|
1,510
|
||||||||||
Residential land acquisition & development
|
18,374
|
6,207
|
1,470
|
--
|
26,051
|
||||||||||
Residential land improved lots
|
2,744
|
3,705
|
131
|
--
|
6,580
|
||||||||||
Residential land unimproved
|
2,739
|
916
|
2,428
|
--
|
6,083
|
||||||||||
Commercial land acquisition & development
|
--
|
--
|
--
|
--
|
--
|
||||||||||
Commercial land improved
|
1,954
|
--
|
--
|
--
|
1,954
|
||||||||||
Commercial land unimproved
|
494
|
--
|
--
|
--
|
494
|
||||||||||
Total construction and land
|
34,301
|
14,558
|
4,670
|
--
|
53,529
|
||||||||||
One- to four-family
|
12,059
|
2,766
|
1,232
|
--
|
16,057
|
||||||||||
Commercial business
|
14,265
|
76
|
775
|
149
|
15,265
|
||||||||||
Agricultural business, including secured by farmland
|
1,290
|
--
|
597
|
--
|
1,887
|
||||||||||
Consumer
|
2,205
|
1,851
|
470
|
--
|
4,526
|
||||||||||
Total non-performing loans
|
83,532
|
19,728
|
11,836
|
149
|
115,245
|
||||||||||
Securities on nonaccrual
|
--
|
--
|
500
|
1,396
|
1,896
|
||||||||||
REO and other repossessed assets held for sale, net
|
31,457
|
32,827
|
6,981
|
--
|
71,265
|
||||||||||
Total non-performing assets
|
$
|
114,989
|
$
|
52,555
|
$
|
19,317
|
$
|
1,545
|
$
|
188,406
|
|||||
Percent of non-performing assets
|
61.0
|
%
|
27.9
|
%
|
10.3
|
%
|
0.8
|
%
|
100.0
|
%
|
Amount
|
Percent of Total
Non-Performing
Loans
|
Collateral Securing the Indebtedness
|
Geographic Location
|
|||||||
$
|
9,328
|
8.1
|
%
|
48 residential lots
|
Greater Seattle-Puget Sound area
|
|||||
7,194
|
6.2
|
105 residential lots
|
Greater Seattle-Puget Sound area
|
|||||||
4,000
|
3.5
|
Six commercial buildings and other investments
|
Colorado and Puget Sound area
|
|||||||
2,959
|
2.6
|
Business assets, accounts receivable and vehicles
|
Greater Spokane, WA area
|
|||||||
2,485
|
2.2
|
17 residential lots
Three completed homes
One home under construction
|
Greater Seattle-Puget Sound area
|
|||||||
2,368
|
2.1
|
13 residential lots
33.2 acres land zoned residential
|
Greater Portland, OR area
|
|||||||
2,359
|
2.0
|
Accounts receivable and inventory
|
Greater Seattle-Puget Sound area
|
|||||||
2,136
|
1.9
|
17 residential lots
|
Greater Portland, OR area
|
|||||||
2,071
|
1.8
|
One commercial office building
|
Greater Spokane, WA area
|
|||||||
1,859
|
1.6
|
One hotel and restaurant
|
Greater Spokane, WA area
|
|||||||
1,819
|
1.6
|
20 residential lots
One completed home
Two half-acre residential parcels
4.5 acres commercial land
|
Greater Seattle-Puget Sound area
|
|||||||
1,706
|
1.5
|
50% interest in office building
Second mortgage on 61 condo/townhome units
|
Greater Portland, OR area
|
|||||||
1,612
|
1.4
|
12 residential condo units
|
Greater Boise, ID area
|
|||||||
1,585
|
1.4
|
84 residential lots
|
Central Oregon
|
|||||||
1,565
|
1.4
|
11 completed homes
|
Greater Seattle-Puget Sound area
|
|||||||
1,511
|
1.3
|
Four completed condo units
Two completed homes
|
Greater Portland, OR area
|
|||||||
1,510
|
1.3
|
One commercial condo units
Two completed homes
|
Greater Seattle-Puget Sound area
|
|||||||
67,178
|
58.1
|
Various collateral; relationships under $1.5 million
|
Various (mostly in WA, OR and ID)
|
|||||||
$
|
115,245
|
100.0
|
%
|
Total non-performing loans
|
Amount
|
Percent of
Total REO
|
REO Description
|
Geographic Location
|
|||||
$
|
31,005
|
43.4
|
%
|
28 completed homes
Eight homes under construction
226 residential lots
186 townhouse lots
49 acres undeveloped buildable land
29 condominium lots
Three condominium units under construction
|
Greater Portland, Oregon area
|
|||
24,621
|
34.6
|
16 completed homes
55 residential lots
One land development project with 167 residential lots
Seven acres of land with nine parcels zoned commercial
One home under construction
Seven acres of land for 25 single family residences
|
Greater Seattle-Puget Sound area
|
|||||
6,102
|
8.6
|
8 completed homes
181 residential lots
Four townhouse lots
20 acres zoned agricultural but permitted for residential
development
Four commercial lots
Seven acres raw land zoned residential
|
Greater Boise, Idaho area
|
|||||
4,815
|
6.8
|
11 acres commercial land in three parcels
One single-family residence on 10 acres land
Seven acre residential site with 95 acres farmland
One commercial building
One residential condo
|
Other Oregon locations
|
|||||
2,747
|
3.9
|
Three completed homes
51 residential lots
One residential duplex
One agricultural warehouse and storefront
One home on 31 acres agricultural land
|
Other Washington locations
|
|||||
1,915
|
2.7
|
Two completed homes
Four residential lots
One parcel land for 81 residential lots
One commercial office building
|
Greater Spokane, WA area
|
|||||
$
|
71,205
|
100.0
|
%
|
Actual
|
Minimum for Capital
Adequacy Purposes
|
Minimum to be Categorized as
“Well-Capitalized” Under
Prompt Corrective Action
Provisions
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
Banner Corporation—consolidated
|
|||||||||||||||||||
Total capital to risk-weighted assets
|
$
|
591,709
|
17.29
|
%
|
$
|
273,802
|
8.00
|
%
|
|||||||||||
Tier 1 capital to risk-weighted assets
|
548,320
|
16.02
|
136,901
|
4.00
|
|||||||||||||||
Tier 1 leverage capital to average assets
|
548,320
|
12.90
|
169,964
|
4.00
|
|||||||||||||||
Banner Bank (1)
|
|||||||||||||||||||
Total capital to risk-weighted assets
|
497,052
|
15.32
|
259,501
|
8.00
|
$
|
324,376
|
10.00
|
%
|
|||||||||||
Tier 1 capital to risk-weighted assets
|
455,902
|
14.05
|
129,751
|
4.00
|
194,626
|
6.00
|
|||||||||||||
Tier 1 leverage capital to average assets
|
455,902
|
11.37
|
160,389
|
4.00
|
200,486
|
5.00
|
|||||||||||||
Islanders Bank
|
|||||||||||||||||||
Total capital to risk-weighted assets
|
30,226
|
14.93
|
16,195
|
8.00
|
20,243
|
10.00
|
|||||||||||||
Tier 1 capital to risk-weighted assets
|
27,695
|
13.68
|
8,097
|
4.00
|
12,146
|
6.00
|
|||||||||||||
Tier 1 leverage capital to average assets
|
27,695
|
11.78
|
9,405
|
4.00
|
11,756
|
5.00
|
Estimated Change in
|
|||||||||||||||||
Change (in Basis Points) in
Interest Rates (1)
|
Net Interest Income
Next 12 Months
|
Net Economic Value
|
|||||||||||||||
+400
|
$
|
(3,536
|
)
|
(2.2
|
)%
|
$
|
(181,755
|
)
|
(28.2
|
)%
|
|||||||
+300
|
(1,895
|
)
|
(1.2
|
)
|
(138,404
|
)
|
(21.5
|
)
|
|||||||||
+200
|
(741
|
)
|
(0.5
|
)
|
(96,381
|
)
|
(15.0
|
)
|
|||||||||
+100
|
(237
|
)
|
(0.1
|
)
|
(50,037
|
)
|
(7.8
|
)
|
|||||||||
0
|
--
|
--
|
--
|
--
|
|||||||||||||
-25
|
783
|
0.5
|
5,915
|
0.9
|
|||||||||||||
-50
|
688
|
0.4
|
2,986
|
0.5
|
Within
6 Months
|
After 6
Months
Within 1 Year
|
After 1 Year
Within 3
Years
|
After 3 Years
Within 5
Years
|
After 5 Years
Within 10
Years
|
Over
10 Years
|
Total
|
|||||||||||||||
Interest-earning assets: (1)
|
|||||||||||||||||||||
Construction loans
|
$
|
178,151
|
$
|
15,389
|
$
|
16,725
|
$
|
4,375
|
$
|
677
|
$
|
134
|
$
|
215,451
|
|||||||
Fixed-rate mortgage loans
|
138,301
|
95,483
|
318,683
|
165,710
|
167,989
|
69,370
|
955,536
|
||||||||||||||
Adjustable-rate mortgage loans
|
399,597
|
152,100
|
401,147
|
180,908
|
7,813
|
--
|
1,141,565
|
||||||||||||||
Fixed-rate mortgage-backed securities
|
10,522
|
8,469
|
21,481
|
11,084
|
10,440
|
3,344
|
65,340
|
||||||||||||||
Adjustable-rate mortgage-backed securities
|
1,607
|
693
|
5,843
|
--
|
--
|
--
|
8,143
|
||||||||||||||
Fixed-rate commercial/agricultural loans
|
61,333
|
30,880
|
77,948
|
31,176
|
6,114
|
251
|
207,702
|
||||||||||||||
Adjustable-rate commercial/agricultural loans
|
478,561
|
11,110
|
32,264
|
12,442
|
766
|
--
|
535,143
|
||||||||||||||
Consumer and other loans
|
159,490
|
15,043
|
43,805
|
17,885
|
20,958
|
1,044
|
258,225
|
||||||||||||||
Investment securities and interest-earning deposits
|
378,294
|
47,607
|
56,721
|
25,073
|
42,967
|
63,761
|
614,423
|
||||||||||||||
Total rate sensitive assets
|
1,805,856
|
376,774
|
974,617
|
448,653
|
257,724
|
137,904
|
4,001,528
|
||||||||||||||
Interest-bearing liabilities: (2)
|
|||||||||||||||||||||
Regular savings and NOW accounts
|
166,948
|
144,893
|
338,084
|
338,084
|
--
|
--
|
988,009
|
||||||||||||||
Money market deposit accounts
|
217,141
|
130,284
|
86,856
|
--
|
--
|
--
|
434,281
|
||||||||||||||
Certificates of deposit
|
688,765
|
403,997
|
242,977
|
59,415
|
3,178
|
--
|
1,398,332
|
||||||||||||||
FHLB advances
|
220
|
--
|
10,000
|
--
|
--
|
--
|
10,220
|
||||||||||||||
Other borrowings
|
463
|
50,000
|
--
|
--
|
--
|
--
|
50,463
|
||||||||||||||
Junior subordinated debentures
|
123,716
|
--
|
--
|
--
|
--
|
--
|
123,716
|
||||||||||||||
Retail repurchase agreements
|
85,822
|
--
|
--
|
--
|
--
|
--
|
85,822
|
||||||||||||||
Total rate sensitive liabilities
|
1,283,075
|
729,174
|
677,917
|
397,499
|
3,178
|
--
|
3,090,843
|
||||||||||||||
Excess (deficiency) of interest-sensitive assets over interest-sensitive liabilities
|
$
|
522,781
|
$
|
(352,400
|
)
|
$
|
296,700
|
$
|
51,154
|
$
|
254,546
|
$
|
137,904
|
$
|
910,685
|
||||||
Cumulative excess (deficiency) of interest-sensitive assets
|
$
|
522,781
|
$
|
170,381
|
$
|
467,081
|
$
|
518,235
|
$
|
772,781
|
$
|
910,685
|
$
|
910,685
|
|||||||
Cumulative ratio of interest-earning assets to interest-bearing liabilities
|
140.74
|
%
|
108.47
|
%
|
117.36
|
%
|
116.78
|
%
|
125.00
|
%
|
129.46
|
%
|
129.46
|
%
|
|||||||
Interest sensitivity gap to total assets
|
12.43
|
%
|
(8.38
|
)%
|
7.05
|
%
|
1.22
|
%
|
6.05
|
%
|
3.28
|
%
|
21.65
|
%
|
|||||||
Ratio of cumulative gap to total assets
|
12.43
|
%
|
4.05
|
%
|
11.10
|
%
|
12.32
|
%
|
18.37
|
%
|
21.65
|
%
|
21.65
|
%
|
PART II - OTHER INFORMATION
|
Exhibit
|
Index of Exhibits
|
|
3{a}
|
Amended and Restated Articles of Incorporation of Registrant [incorporated by reference to the Registrant’s Current Report on Form 8-K filed on April 28, 2010 (File No. 000-26584)].
|
|
3{b}
|
Certificate of designation relating to the Company’s Fixed Rate Cumulative Perpetual Preferred Stock Series A [incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 24, 2008 (File No. 000-26584)].
|
|
3{c}
|
Bylaws of Registrant [incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 1, 2011 (File No. 0-26584)].
|
|
4{a}
|
Warrant to purchase shares of Company’s common stock dated November 21, 2008 [incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 24, 2008 (File No. 000-26584)].
|
|
4{b}
|
Letter Agreement (including Securities Purchase Agreement Standard Terms attached as Exhibit A) dated November 21, 2008 between the Company and the United States Department of the Treasury [incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 24, 2008 (File No. 000-26584)].
|
|
10{a}
|
Executive Salary Continuation Agreement with Gary L. Sirmon [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended March 31, 1996 (File No. 0-26584)].
|
|
10{b}
|
Employment Agreement with Michael K. Larsen [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended March 31, 1996 (File No. 0-26584)].
|
|
10{c}
|
Employment Agreement with Mark J. Grescovich [incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 30, 2010 (File No. 000-265840].
|
|
10{d}
|
Executive Salary Continuation Agreement with Michael K. Larsen [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended March 31, 1996 (File No. 0-26584)].
|
|
10{e}
|
1996 Stock Option Plan [incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 dated August 26, 1996 (File No. 333-10819)].
|
|
10{f}
|
1996 Management Recognition and Development Plan [incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 dated August 26, 1996 (File No. 333-10819)].
|
|
10{g}
|
Consultant Agreement with Jesse G. Foster, dated as of December 19, 2003. [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-23584)].
|
|
10{h}
|
Supplemental Retirement Plan as Amended with Jesse G. Foster [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended March 31, 1997 (File No. 0-26584)].
|
|
10{i}
|
Employment Agreement with Lloyd W. Baker [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 0-26584)].
|
|
10{j}
|
Employment Agreement with D. Michael Jones [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 0-26584)].
|
|
10{k}
|
Supplemental Executive Retirement Program Agreement with D. Michael Jones [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-26584)].
|
|
10{l}
|
Form of Supplemental Executive Retirement Program Agreement with Gary Sirmon, Michael K. Larsen, Lloyd W. Baker, Cynthia D. Purcell, Richard B. Barton and Paul E. Folz [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2001 and the exhibits filed with the Form 8-K on May 6, 2008].
|
|
10{m}
|
1998 Stock Option Plan [incorporated by reference to exhibits filed with the Registration Statement on Form S-8 dated February 2, 1999 (File No. 333-71625)].
|
|
10{n}
|
2001 Stock Option Plan [incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 dated August 8, 2001 (File No. 333-67168)].
|
|
10{o}
|
Form of Employment Contract entered into with Cynthia D. Purcell, Richard B. Barton, Paul E. Folz and Douglas M. Bennett [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-26584)].
|
|
10{p}
|
2004 Executive Officer and Director Stock Account Deferred Compensation Plan [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 0-26584)].
|
|
10{q}
|
2004 Executive Officer and Director Investment Account Deferred Compensation Plan [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 0-26584)].
|
|
10{r}
|
Long-Term Incentive Plan [incorporated by reference to the exhibits filed with the Form 8-K on May 6, 2008].
|
|
10{s}
|
Form of Compensation Modification Agreement [incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 24, 2008 (File No. 000-26584)].
|
|
10{t}
|
2005 Executive Officer and Director Stock Account Deferred Compensation Plan.
|
|
10{u}
|
Entry into an Indemnification Agreement with each of the Company's Directors [incorporated by reference to exhibits filed with the Form 8-K on January 29, 2010].
|
31.1
|
Certification of Chief Executive Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32 | Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Statements of Financial Condition; (2) Consolidated Statements of Operations; (3) Consolidated Statements of Changes in Stockholders' Equity; (4) Consolidated Statements of Cash Flows; and (5) Selected Notes to the Consolidated Financial Statements. * | |
|
|
Banner Corporation | |
August 5, 2011
|
/s/ Mark J. Grescovich |
Mark J. Grescovich | |
President and Chief Executive Officer | |
(Principal Executive Officer) | |
August 5, 2011 | /s/ Lloyd W. Baker |
Lloyd W. Baker
|
|
Treasurer and Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
I, Mark J. Grescovich, certify that:
|
|||
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 of Banner Corporation;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
||
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
||
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
||
August 5, 2011
|
/s/Mark J. Grescovich
|
||
Mark J. Grescovich
|
|||
Chief Executive Officer
|
I, Lloyd W. Baker, certify that:
|
|||
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 of Banner Corporation;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
||
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
||
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
||
August 5, 2011
|
/s/Lloyd W. Baker
|
||
Lloyd W. Baker
|
|||
Chief Financial Officer
|
|
• the information contained in the report fairly presents, in all material respects, the Company’s financial condition and results of operations as of the dates and for the periods presented in the financial statements included in such report.
|
August 5, 2011
|
/s/Mark J. Grescovich
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Mark J. Grescovich
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Chief Executive Officer
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August 5, 2011
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/s/Lloyd W. Baker
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Lloyd W. Baker
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Chief Financial Officer
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BANNER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $)
In Thousands, except Share data |
Total
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Preferred Stock
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Common Stock and Paid in Capital
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Retained Earnings (Accumulated Deficit)
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Accumulated Other Comprehensive Income (Loss)
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Stockholders' Equity
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Balance at start of period amount at Dec. 31, 2009 | Â | $ 117,407 | $ 329,549 | $ (42,077) | $ 249 | $ 405,128 | ||||||||
Balance at start of period shares at Dec. 31, 2009 | Â | 124,000 | 3,042,744 | Â | Â | Â | ||||||||
Net income (loss) | Â | Â | Â | (61,896) | Â | (61,896) | ||||||||
Change in valuation of securities, available-for-sale, net of income tax | Â | Â | Â | Â | 59 | 59 | ||||||||
Amortization of unrealized loss on tax exempt securities transferred from available-for-sale to held-to-maturity, net of income taxes | Â | Â | Â | Â | 42 | 42 | ||||||||
Accretion of preferred stock discount | Â | 1,593 | Â | (1,593) | Â | Â | ||||||||
Accrual of dividends on preferred stock | Â | Â | Â | (6,200) | Â | (6,200) | ||||||||
Accrual of dividends on common stock | Â | Â | Â | (3,582) | Â | (3,582) | [1] | |||||||
Proceeds from issuance of common stock for stockholder reinvestment program, net of registration expenses shares | Â | Â | 836,989 | Â | Â | Â | ||||||||
Proceeds from issuance of common stock for stockholder reinvestment program, net of registration expenses amount | Â | Â | 16,201 | Â | Â | 16,201 | ||||||||
Proceeds from issuance of common stock, net of offering costs shares | Â | Â | 12,234,143 | Â | Â | Â | ||||||||
Proceeds from issuance of common stock, net of offering costs amount | Â | Â | 161,637 | Â | Â | 161,637 | ||||||||
Amortization of compensation related to Management Recognition Plan (MRP) | Â | Â | 2 | Â | Â | 2 | ||||||||
Amortization of compensation related to restricted stock grant shares | Â | Â | 16,565 | Â | Â | Â | ||||||||
Amortization of compensation related to restricted stock grant amount | Â | Â | 28 | Â | Â | 28 | ||||||||
Amortization of compensation related to stock options | Â | Â | 53 | Â | Â | 53 | ||||||||
Balance at end of period amount at Dec. 31, 2010 | Â | 119,000 | 507,470 | (115,348) | 350 | 511,472 | ||||||||
Balance at end of period shares at Dec. 31, 2010 | Â | 124,000 | 16,130,441 | Â | Â | Â | ||||||||
Net income (loss) | (5,643) | Â | Â | (5,643) | Â | (5,643) | ||||||||
Change in valuation of securities, available-for-sale, net of income tax | Â | Â | Â | Â | 1,289 | 1,289 | ||||||||
Amortization of unrealized loss on tax exempt securities transferred from available-for-sale to held-to-maturity, net of income taxes | 9 | Â | Â | Â | 9 | 9 | ||||||||
Accretion of preferred stock discount | 851 | 851 | Â | (851) | Â | Â | ||||||||
Accrual of dividends on preferred stock | Â | Â | Â | (3,100) | Â | (3,100) | ||||||||
Accrual of dividends on common stock | Â | Â | Â | (1,326) | Â | (1,326) | [2] | |||||||
Proceeds from issuance of common stock for stockholder reinvestment program, net of registration expenses shares | Â | Â | 503,913 | Â | Â | Â | ||||||||
Proceeds from issuance of common stock for stockholder reinvestment program, net of registration expenses amount | 8,265 | [3] | Â | 8,265 | Â | Â | 8,265 | |||||||
Amortization of compensation related to restricted stock grant amount | Â | Â | 42 | Â | Â | 42 | ||||||||
Amortization of compensation related to stock options | Â | Â | 18 | Â | Â | 18 | ||||||||
Balance at end of period amount at Jun. 30, 2011 | Â | $ 119,851 | $ 515,795 | $ (126,268) | $ 1,648 | $ 511,026 | ||||||||
Balance at end of period shares at Jun. 30, 2011 | Â | 124,000 | 16,634,354 | Â | Â | Â | ||||||||
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Document and Entity Information (USD $)
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3 Months Ended |
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Jun. 30, 2011
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Document and Entity Information | Â |
Entity Registrant Name | Banner Corporation |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2011 |
Amendment Flag | false |
Entity Central Index Key | 0000946673 |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 16,815,255 |
Entity Public Float | $ 294,266,963 |
Entity Filer Category | Accelerated Filer |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2011 |
Document Fiscal Period Focus | Q2 |
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Loans Receivable And The Allowance For Loan Losses
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Jun. 30, 2011
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Loans Receivable And The Allowance For Loan Losses | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable And The Allowance For Loan Losses | Note 7: LOANS RECEIVABLE AND THE ALLOWANCE FOR LOAN LOSSES
We originate residential mortgage loans for both portfolio investment and sale in the secondary market. At the time of origination, mortgage loans are designated as held for sale or held for investment. Loans held for sale are stated at the lower of cost or estimated market value determined on an aggregate basis. Net unrealized losses on loans held for sale are recognized through a valuation allowance by charges to income. The Banks also originate construction, land and land development, commercial and multifamily real estate, commercial business, agricultural and consumer loans for portfolio investment. Loans receivable not designated as held for sale are recorded at the principal amount outstanding, net of allowance for loan losses, deferred fees, discounts and premiums. Premiums, discounts and deferred loan fees are amortized to maturity using the level-yield methodology.
Interest is accrued as earned unless management doubts the collectability of the loan or the unpaid interest. Interest accruals are generally discontinued when loans become 90 days past due for scheduled interest payments. All previously accrued but uncollected interest is deducted from interest income upon transfer to nonaccrual status. Future collection of interest is included in interest income based upon an assessment of the likelihood that the loans will be repaid or recovered. A loan may be put on nonaccrual status sooner than this policy would dictate if, in managements judgment, the loan may be uncollectable. Such interest is then recognized as income only if it is ultimately collected.
Some of the Companys loans are reported as troubled debt restructurings (TDRs). Loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include forgiveness of principal or accrued interest, extending the maturity date(s) or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Loans identified as TDRs are accounted for in accordance with the Banks impaired loan accounting policies.
Loans receivable, including loans held for sale, at June 30, 2011, December 31, 2010 and June 30, 2010 are summarized as follows (dollars in thousands):
Loan amounts are net of unearned, unamortized loan fees (and costs) of approximately $10 million, $11 million and $12 million at June 30, 2011, December 31, 2010 and June 30, 2010, respectively.
The Companys loans by geographic concentration at June 30, 2011 were as follows (dollars in thousands):
The geographic concentrations of Banners land and land development loans by state at June 30, 2011 were as follows (dollars in thousands):
The Company originates both adjustable- and fixed-rate loans. The maturity and repricing composition of those loans, less undisbursed amounts and deferred fees, at June 30, 2011, December 31, 2010 and June 30, 2010 were as follows (in thousands):
The adjustable-rate loans have interest rate adjustment limitations and are generally indexed to various prime (The Wall Street Journal) or LIBOR rates, One to Five Year Constant Maturity Treasury Indices or FHLB borrowing rates. Future market factors may affect the correlation of the interest rate adjustment with the rates the Banks pay on the short-term deposits that primarily have been utilized to fund these loans.
Impaired Loans and the Allowance for Loan Losses. A loan is considered impaired when, based on current information and circumstances, the Company determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. Impaired loans are comprised of loans on nonaccrual, TDRs and loans that are 90 days or more past due, but are still on accrual.
The amount of impaired loans and the related allocated reserve for loan losses as of June 30, 2011 and December 31, 2010 were as follows (in thousands):
As of June 30, 2011, the Company had additional commitments to advance funds up to an amount of $568,000 related to impaired loans.
The following tables provide additional information on impaired loans, with and without specific allowance reserves, at their recorded investment amount as of June 30, 2011 and December 31, 2010. Recorded investment includes the unpaid principal balance or the carrying amount of loans less charge-offs and net deferred loan fees (in thousands):
Credit Quality Indicators: To appropriately and effectively manage the ongoing credit quality of the Companys loan portfolio, management has implemented a risk-rating or loan grading system for its loans. The system is a tool to evaluate portfolio asset quality throughout each applicable loans life as an asset of the Company. Generally, loans and leases are risk rated on an aggregate borrower/relationship basis with individual loans sharing similar ratings. There are some instances when specific situations relating to individual loans will provide the basis for different risk ratings within the aggregate relationship. Loans are graded on a scale of 1 to 9. For a description of the general characteristics of these categories, please refer to Note 6 of the Notes to the Consolidated Financial Statements in our 2010 Form 10-K.
The following table shows Banners portfolio of risk-rated loans and non-risk-rated loans by grade or other characteristics as of June 30, 2011 and December 31, 2010 (in thousands):
The following table provides additional detail on delinquency aging of Banners loans, including delinquent loans on accrual and on non-accrual status as of June 30, 2011 and December 31, 2010 (in thousands):
The following tables provide additional information on the allowance for loan losses and loan balances individually and collectively evaluated for impairment at or for the three and six months ended June 30, 2011 and 2010 (in thousands):
(1)The portion of the allowance allocated to commitments was $1.0 million and the portion that is unallocated was $15.5 million.
(1)The portion of the allowance allocated to commitments was $900,000 and the portion that is unallocated was $9.6 million.
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