SECURITIES AND EXCHANGE COMMISSION
|
||
WASHINGTON, D.C. 20549
|
||
FORM 8-K
|
||
CURRENT REPORT
|
||
PURSUANT TO SECTION 13 OR 15 (d) OF THE
|
||
SECURITIES EXCHANGE ACT OF 1934
|
||
Date of Report (Date of earliest event reported): January 25, 2012
|
||
Banner Corporation
|
||
(Exact name of registrant as specified in its charter)
|
||
Washington
|
0-26584
|
91-1691604
|
(State or other jurisdiction
|
(Commission
|
(I.R.S. Employer
|
of incorporation)
|
File Number)
|
Identification No.)
|
10 S. First Avenue, Walla Walla, Washington
|
99362
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Registrant's telephone number (including area code) (509) 527-3636
|
||
Not Applicable
|
||
(Former name or former address, if changed since last report)
|
[ ]
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
[ ]
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
[ ]
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
[ ]
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
BANNER CORPORATION
|
|
Date: January 25, 2012
|
By: /s/Mark J. Grescovich
|
Mark J. Grescovich
|
|
President and
Chief Executive Officer
|
|
![]() |
![]() |
Contact: Mark J. Grescovich,
President & CEO
Lloyd W. Baker, CFO
(509) 527-3636
|
News Release
|
RESULTS OF OPERATIONS
|
Quarters Ended
|
Twelve Months Ended | |||||||||||||
(in thousands except shares and per share data)
|
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
Dec 31, 2011
|
Dec 31, 2010
|
||||||||||
INTEREST INCOME:
|
|||||||||||||||
Loans receivable
|
$
|
45,115
|
$
|
45,641
|
$
|
49,390
|
$
|
184,357
|
$
|
205,784
|
|||||
Mortgage-backed securities
|
922
|
799
|
902
|
3,455
|
4,045
|
||||||||||
Securities and cash equivalents
|
2,414
|
3,121
|
1,936
|
9,751
|
8,253
|
||||||||||
48,451
|
49,561
|
52,228
|
197,563
|
218,082
|
|||||||||||
INTEREST EXPENSE:
|
|||||||||||||||
Deposits
|
5,169
|
6,169
|
9,521
|
26,164
|
52,320
|
||||||||||
Federal Home Loan Bank advances
|
64
|
64
|
314
|
370
|
1,318
|
||||||||||
Other borrowings
|
559
|
559
|
584
|
2,265
|
2,448
|
||||||||||
Junior subordinated debentures
|
1,073
|
1,041
|
1,052
|
4,193
|
4,226
|
||||||||||
6,865
|
7,833
|
11,471
|
32,992
|
60,312
|
|||||||||||
Net interest income before provision for loan losses
|
41,586
|
41,728
|
40,757
|
164,571
|
157,770
|
||||||||||
PROVISION FOR LOAN LOSSES
|
5,000
|
5,000
|
20,000
|
35,000
|
70,000
|
||||||||||
Net interest income
|
36,586
|
36,728
|
20,757
|
129,571
|
87,770
|
||||||||||
OTHER OPERATING INCOME:
|
|||||||||||||||
Deposit fees and other service charges
|
5,894
|
6,096
|
5,515
|
22,962
|
22,009
|
||||||||||
Mortgage banking operations
|
1,936
|
1,401
|
2,086
|
5,154
|
6,370
|
||||||||||
Loan servicing fees
|
136
|
289
|
177
|
1,078
|
951
|
||||||||||
Miscellaneous
|
972
|
586
|
514
|
2,420
|
2,302
|
||||||||||
8,938
|
8,372
|
8,292
|
31,614
|
31,632
|
|||||||||||
Other-than-temporary impairment recovery (loss)
|
- -
|
3,000
|
- -
|
3,000
|
(4,231
|
) | |||||||||
Net change in valuation of financial instruments carried at fair value
|
(1,787
|
) |
(1,032
|
) |
(706)
|
(624
|
) |
1,747
|
|||||||
Total other operating income
|
7,151
|
10,340
|
7,586
|
33,990
|
29,148
|
||||||||||
OTHER OPERATING EXPENSE:
|
|||||||||||||||
Salary and employee benefits
|
18,730
|
18,226
|
17,045
|
72,499
|
67,490
|
||||||||||
Less capitalized loan origination costs
|
(2,404
|
) |
(1,929
|
) |
(2,123)
|
(8,001
|
) |
(7,199
|
) | ||||||
Occupancy and equipment
|
5,379
|
5,352
|
5,501
|
21,561
|
22,232
|
||||||||||
Information / computer data services
|
1,388
|
1,547
|
1,531
|
6,023
|
6,132
|
||||||||||
Payment and card processing services
|
2,156
|
2,132
|
1,942
|
7,874
|
7,067
|
||||||||||
Professional services
|
1,210
|
1,950
|
1,740
|
6,017
|
6,401
|
||||||||||
Advertising and marketing
|
2,036
|
1,602
|
1,740
|
7,281
|
7,457
|
||||||||||
Deposit insurance
|
1,367
|
1,299
|
1,999
|
6,024
|
8,622
|
||||||||||
State/municipal business and use taxes
|
562
|
553
|
616
|
2,153
|
2,259
|
||||||||||
Real estate operations
|
4,365
|
6,698
|
7,044
|
22,262
|
26,025
|
||||||||||
Amortization of core deposit intangibles
|
555
|
554
|
600
|
2,276
|
2,459
|
||||||||||
Miscellaneous
|
3,323
|
3,054
|
3,399
|
12,135
|
11,856
|
||||||||||
Total other operating expense
|
38,667
|
41,038
|
41,034
|
158,104
|
160,801
|
||||||||||
Income (loss) before provision for (benefit from) income taxes
|
5,070
|
6,030
|
(12,691
|
) |
5,457
|
(43,883
|
) | ||||||||
PROVISION FOR (BENEFIT FROM ) INCOME TAXES
|
- -
|
- -
|
- -
|
- -
|
18,013
|
||||||||||
NET INCOME (LOSS)
|
5,070
|
6,030
|
(12,691
|
) |
5,457
|
(61,896
|
) | ||||||||
PREFERRED STOCK DIVIDEND AND DISCOUNT ACCRETION:
|
|||||||||||||||
Preferred stock dividend
|
1,550
|
1,550
|
1,550
|
6,200
|
6,200
|
||||||||||
Preferred stock discount accretion
|
425
|
425
|
398
|
1,701
|
1,593
|
||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
3,095
|
$
|
4,055
|
$
|
(14,639
|
) $
|
(2,444
|
) $
|
(69,689
|
) | ||||
Earnings (loss) per share available to common shareholder
|
|||||||||||||||
Basic
|
$
|
0.18
|
$
|
0.24
|
$
|
(0.91
|
) $
|
(0.15
|
) $
|
(7.21
|
) | ||||
Diluted
|
$
|
0.18
|
$
|
0.24
|
$
|
(0.91
|
) $
|
(0.15
|
) $
|
(7.21
|
) | ||||
Cumulative dividends declared per common share
|
$
|
0.01
|
$
|
0.01
|
$
|
0.07
|
$
|
0.10
|
$
|
0.28
|
|||||
Weighted average common shares outstanding
|
|||||||||||||||
Basic
|
17,269,269
|
16,808,589
|
16,008,467
|
16,724,113
|
9,664,906
|
||||||||||
Diluted
|
17,298,004
|
16,837,324
|
16,008,467
|
16,752,848
|
9,664,906
|
||||||||||
Common shares issued in connection with exercise of stock options or DRIP
|
522,223
|
346,489
|
241,653
|
1,375,185
|
836,989
|
FINANCIAL CONDITION
|
||||||||||
(in thousands except shares and per share data)
|
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
|||||||
ASSETS
|
||||||||||
Cash and due from banks
|
$
|
62,678
|
$
|
53,503
|
$
|
39,756
|
||||
Federal funds and interest-bearing deposits
|
69,758
|
234,824
|
321,896
|
|||||||
Securities - at fair value
|
80,727
|
85,419
|
95,379
|
|||||||
Securities - available for sale
|
465,795
|
383,670
|
200,227
|
|||||||
Securities - held to maturity
|
75,438
|
79,289
|
72,087
|
|||||||
Federal Home Loan Bank stock
|
37,371
|
37,371
|
37,371
|
|||||||
Loans receivable:
|
||||||||||
Held for sale
|
3,007
|
2,003
|
3,492
|
|||||||
Held for portfolio
|
3,293,331
|
3,223,243
|
3,399,625
|
|||||||
Allowance for loan losses
|
(82,912
|
) |
(86,128
|
) |
(97,401
|
) | ||||
3,213,426
|
3,139,118
|
3,305,716
|
||||||||
Accrued interest receivable
|
15,570
|
16,101
|
15,927
|
|||||||
Real estate owned held for sale, net
|
42,965
|
66,459
|
100,872
|
|||||||
Property and equipment, net
|
91,435
|
92,454
|
96,502
|
|||||||
Other intangibles, net
|
6,331
|
6,887
|
8,609
|
|||||||
Bank-owned life insurance
|
58,563
|
58,058
|
56,653
|
|||||||
Other assets
|
37,255
|
38,611
|
55,087
|
|||||||
$
|
4,257,312
|
$
|
4,291,764
|
$
|
4,406,082
|
|||||
LIABILITIES
|
||||||||||
Deposits:
|
||||||||||
Non-interest-bearing
|
$
|
777,563
|
$
|
763,008
|
$
|
600,457
|
||||
Interest-bearing transaction and savings accounts
|
1,447,594
|
1,461,383
|
1,433,248
|
|||||||
Interest-bearing certificates
|
1,250,497
|
1,313,043
|
1,557,493
|
|||||||
3,475,654
|
3,537,434
|
3,591,198
|
||||||||
Advances from Federal Home Loan Bank at fair value
|
10,533
|
10,572
|
43,523
|
|||||||
Customer repurchase agreements and other borrowings
|
152,128
|
139,704
|
175,813
|
|||||||
Junior subordinated debentures at fair value
|
49,988
|
48,770
|
48,425
|
|||||||
Accrued expenses and other liabilities
|
23,253
|
19,593
|
21,048
|
|||||||
Deferred compensation
|
13,306
|
14,200
|
14,603
|
|||||||
3,724,862
|
3,770,273
|
3,894,610
|
||||||||
STOCKHOLDERS' EQUITY
|
||||||||||
Preferred stock - Series A
|
120,702
|
120,276
|
119,000
|
|||||||
Common stock
|
531,149
|
523,284
|
509,457
|
|||||||
Retained earnings (accumulated deficit)
|
(119,465
|
) |
(122,384
|
) |
(115,348
|
) | ||||
Other components of stockholders' equity
|
64
|
315
|
(1,637
|
) | ||||||
532,450
|
521,491
|
511,472
|
||||||||
$
|
4,257,312
|
$
|
4,291,764
|
$
|
4,406,082
|
|||||
Common Shares Issued:
|
||||||||||
Shares outstanding at end of period
|
17,553,472
|
17,031,249
|
16,164,781
|
|||||||
Less unearned ESOP shares at end of period
|
34,340
|
34,340
|
34,340
|
|||||||
Shares outstanding at end of period excluding unearned ESOP shares
|
17,519,132
|
16,996,909
|
16,130,441
|
|||||||
Common stockholders' equity per share (1)
|
$
|
23.50
|
$
|
23.61
|
$
|
24.33
|
||||
Common stockholders' tangible equity per share (1) (2)
|
$
|
23.14
|
$
|
23.20
|
$
|
23.80
|
||||
Common stockholders' tangible equity to tangible assets (2)
|
9.54
|
% |
9.20
|
% |
8.73
|
% | ||||
Consolidated Tier 1 leverage capital ratio
|
13.44
|
% |
13.19
|
% |
12.24
|
% | ||||
(1)
|
- Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares
|
|||||||||
outstanding and excludes unallocated shares in the ESOP.
|
||||||||||
(2)
|
- Common stockholders' tangible equity excludes preferred stock, core deposit and other intangibles.
|
|||||||||
Tangible assets excludes other intangible assets. These ratios represent non-GAAP financial measures.
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
||||||||||||||
LOANS (including loans held for sale):
|
||||||||||||||||
Commercial real estate
|
||||||||||||||||
Owner occupied
|
$
|
469,806
|
$
|
474,863
|
$
|
515,093
|
|
|||||||||
Investment properties
|
621,622
|
586,652
|
550,610
|
|||||||||||||
Multifamily real estate
|
139,710
|
134,146
|
134,634
|
|||||||||||||
Commercial construction
|
42,391
|
38,124
|
62,707
|
|||||||||||||
Multifamily construction
|
19,436
|
16,335
|
27,394
|
|||||||||||||
One- to four-family construction
|
144,177
|
145,776
|
153,383
|
|||||||||||||
Land and land development
|
||||||||||||||||
Residential
|
97,491
|
96,875
|
167,764
|
|||||||||||||
Commercial
|
15,197
|
19,173
|
32,386
|
|||||||||||||
Commercial business
|
601,440
|
580,876
|
585,457
|
|||||||||||||
Agricultural business including secured by farmland
|
218,171
|
211,571
|
204,968
|
|||||||||||||
One- to four-family real estate
|
642,501
|
639,909
|
682,924
|
|||||||||||||
Consumer
|
103,347
|
98,794
|
99,761
|
|||||||||||||
Consumer secured by one- to four-family real estate
|
181,049
|
182,152
|
186,036
|
|||||||||||||
Total loans outstanding
|
$
|
3,296,338
|
$
|
3,225,246
|
$
|
3,403,117
|
|
|||||||||
Restructured loans performing under their restructured terms
|
$
|
54,533
|
$
|
51,990
|
$
|
60,115
|
|
|||||||||
Loans 30 - 89 days past due and on accrual
|
$
|
9,962
|
$
|
7,895
|
$
|
28,847
|
|
|||||||||
Total delinquent loans (including loans on non-accrual)
|
$
|
85,274
|
$
|
91,044
|
$
|
180,336
|
|
|||||||||
Total delinquent loans / Total loans outstanding
|
2.59
|
% |
2.82
|
% |
5.30
|
% | ||||||||||
GEOGRAPHIC CONCENTRATION OF LOANS AT
|
||||||||||||||||
December 31, 2011
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||
Commercial real estate
|
||||||||||||||||
Owner occupied
|
$
|
352,965
|
$
|
62,354
|
$
|
51,321
|
$
|
3,166
|
$
|
469,806
|
||||||
Investment properties
|
478,798
|
94,855
|
42,736
|
5,233
|
621,622
|
|||||||||||
Multifamily real estate
|
121,699
|
9,344
|
8,260
|
407
|
139,710
|
|||||||||||
Commercial construction
|
24,386
|
2,255
|
15,750
|
- -
|
42,391
|
|||||||||||
Multifamily construction
|
19,436
|
- -
|
- -
|
- -
|
19,436
|
|||||||||||
One- to four-family construction
|
79,294
|
63,058
|
1,825
|
- -
|
144,177
|
|||||||||||
Land and land development
|
||||||||||||||||
Residential
|
49,611
|
43,382
|
4,498
|
- -
|
97,491
|
|||||||||||
Commercial
|
12,874
|
890
|
1,433
|
- -
|
15,197
|
|||||||||||
Commercial business
|
392,390
|
81,984
|
66,156
|
60,910
|
601,440
|
|||||||||||
Agricultural business including secured by farmland
|
106,212
|
49,721
|
62,210
|
28
|
218,171
|
|||||||||||
One- to four-family real estate
|
399,566
|
213,782
|
26,901
|
2,252
|
642,501
|
|||||||||||
Consumer
|
72,349
|
25,871
|
5,127
|
- -
|
103,347
|
|||||||||||
Consumer secured by one- to four-family real estate
|
126,507
|
42,412
|
11,631
|
499
|
181,049
|
|||||||||||
Total loans outstanding
|
$
|
2,236,087
|
$
|
689,908
|
$
|
297,848
|
$
|
72,495
|
$
|
3,296,338
|
||||||
Percent of total loans
|
67.8
|
% |
20.9
|
% |
9.0
|
% |
2.3
|
% |
100.0
|
% | ||||||
DETAIL OF LAND AND LAND DEVELOPMENT LOANS AT
|
||||||||||||||||
December 31, 2011
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||
Residential
|
||||||||||||||||
Acquisition & development
|
$
|
13,200
|
$
|
17,343
|
$
|
3,607
|
$
|
- -
|
$
|
34,150
|
||||||
Improved lots
|
22,651
|
23,055
|
408
|
- -
|
46,114
|
|||||||||||
Unimproved land
|
13,760
|
2,984
|
483
|
- -
|
17,227
|
|||||||||||
Total residential land and development
|
$
|
49,611
|
$
|
43,382
|
$
|
4,498
|
$
|
- -
|
$
|
97,491
|
||||||
Commercial & industrial
|
||||||||||||||||
Acquisition & development
|
$
|
2,557
|
$
|
- -
|
$
|
481
|
$
|
- -
|
$
|
3,038
|
||||||
Improved land
|
5,892
|
- -
|
191
|
- -
|
6,083
|
|||||||||||
Unimproved land
|
4,425
|
890
|
761
|
- -
|
6,076
|
|||||||||||
Total commercial land and development
|
$
|
12,874
|
$
|
890
|
$
|
1,433
|
$
|
- -
|
$
|
15,197
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||
Quarters Ended
|
Twelve Months Ended | |||||||||||||||
CHANGE IN THE
|
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
Dec 31, 2011
|
Dec 31, 2010
|
|||||||||||
ALLOWANCE FOR LOAN LOSSES
|
||||||||||||||||
Balance, beginning of period
|
$
|
86,128
|
$
|
92,000
|
$
|
96,435
|
$
|
97,401
|
$
|
95,269
|
||||||
Provision
|
5,000
|
5,000
|
20,000
|
35,000
|
70,000
|
|||||||||||
Recoveries of loans previously charged off:
|
||||||||||||||||
Commercial real estate
|
37
|
1
|
- -
|
53
|
- -
|
|||||||||||
Multifamily real estate
|
- -
|
- -
|
- -
|
- -
|
- -
|
|||||||||||
Construction and land
|
762
|
89
|
112
|
1,602
|
897
|
|||||||||||
One- to four-family real estate
|
241
|
34
|
11
|
356
|
136
|
|||||||||||
Commercial business
|
511
|
414
|
776
|
1,082
|
2,865
|
|||||||||||
Agricultural business, including secured by farmland
|
5
|
10
|
36
|
20
|
45
|
|||||||||||
Consumer
|
73
|
69
|
79
|
304
|
284
|
|||||||||||
1,629
|
617
|
1,014
|
3,417
|
4,227
|
||||||||||||
Loans charged off:
|
||||||||||||||||
Commercial real estate
|
(1,575
|
) |
(1,644
|
) |
(1,575
|
) |
(6,079
|
) |
(1,668
|
) | ||||||
Multifamily real estate
|
(11
|
) |
- -
|
- -
|
(682
|
) |
- -
|
|||||||||
Construction and land
|
(3,269
|
) |
(6,445
|
) |
(11,811
|
) |
(26,328
|
) |
(43,592
|
) | ||||||
One- to four-family real estate
|
(3,324
|
) |
(2,483
|
) |
(2,483
|
) |
(9,910
|
) |
(7,860
|
) | ||||||
Commercial business
|
(1,172
|
) |
(863
|
) |
(3,211
|
) |
(8,396
|
) |
(15,244
|
) | ||||||
Agricultural business, including secured by farmland
|
(188
|
) |
- -
|
(460
|
) |
(477
|
) |
(1,940
|
) | |||||||
Consumer
|
(306
|
) |
(54
|
) |
(508
|
) |
(1,034
|
) |
(1,791
|
) | ||||||
(9,845
|
) |
(11,489
|
) |
(20,048
|
) |
(52,906
|
) |
(72,095
|
) | |||||||
Net charge-offs
|
(8,216
|
) |
(10,872
|
) |
(19,034
|
) |
(49,489
|
) |
(67,868
|
) | ||||||
Balance, end of period
|
$
|
82,912
|
$
|
86,128
|
$
|
97,401
|
$
|
82,912
|
$
|
97,401
|
||||||
Net charge-offs / Average loans outstanding
|
0.25
|
% |
0.33
|
% |
0.55%
|
1.50
|
% |
1.88
|
% | |||||||
ALLOCATION OF
|
||||||||||||||||
ALLOWANCE FOR LOAN LOSSES
|
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
|||||||||||||
Specific or allocated loss allowance
|
||||||||||||||||
Commercial real estate
|
$
|
16,457
|
$
|
14,217
|
$
|
11,779
|
||||||||||
Multifamily real estate
|
3,952
|
2,958
|
3,963
|
|||||||||||||
Construction and land
|
18,184
|
22,683
|
33,121
|
|||||||||||||
Commercial business
|
15,159
|
16,894
|
24,545
|
|||||||||||||
Agricultural business, including secured by farmland
|
1,548
|
1,257
|
1,846
|
|||||||||||||
One- to four-family real estate
|
12,299
|
11,249
|
5,829
|
|||||||||||||
Consumer
|
1,253
|
1,277
|
1,794
|
|||||||||||||
Total allocated
|
68,852
|
70,535
|
82,877
|
|||||||||||||
Estimated allowance for undisbursed commitments
|
678
|
508
|
1,426
|
|||||||||||||
Unallocated
|
13,382
|
15,085
|
13,098
|
|||||||||||||
Total allowance for loan losses
|
$
|
82,912
|
$
|
86,128
|
$
|
97,401
|
||||||||||
Allowance for loan losses / Total loans outstanding
|
2.52
|
% |
2.67
|
% |
2.86
|
% | ||||||||||
Allowance for loan losses / Non-performing loans
|
110
|
% |
104
|
% |
64
|
% | ||||||||||
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
||||||||||||||
NON-PERFORMING ASSETS
|
||||||||||||||||
Loans on non-accrual status
|
||||||||||||||||
Secured by real estate:
|
||||||||||||||||
Commercial
|
$
|
9,226
|
$
|
8,908
|
$
|
24,727
|
|
|||||||||
Multifamily
|
362
|
- -
|
1,889
|
|||||||||||||
Construction and land
|
27,731
|
35,841
|
75,734
|
|||||||||||||
One- to four-family
|
17,408
|
15,274
|
16,869
|
|||||||||||||
Commercial business
|
13,460
|
15,754
|
21,100
|
|||||||||||||
Agricultural business, including secured by farmland
|
1,896
|
1,301
|
5,853
|
|||||||||||||
Consumer
|
2,905
|
4,232
|
2,332
|
|||||||||||||
72,988
|
81,310
|
148,504
|
||||||||||||||
Loans more than 90 days delinquent, still on accrual
|
||||||||||||||||
Secured by real estate:
|
||||||||||||||||
Commercial
|
- -
|
- -
|
- -
|
|||||||||||||
Multifamily
|
- -
|
- -
|
- -
|
|||||||||||||
Construction and land
|
- -
|
- -
|
- -
|
|||||||||||||
One- to four-family
|
2,147
|
1,111
|
2,955
|
|||||||||||||
Commercial business
|
4
|
687
|
- -
|
|||||||||||||
Agricultural business, including secured by farmland
|
- -
|
- -
|
- -
|
|||||||||||||
Consumer
|
173
|
41
|
30
|
|||||||||||||
2,324
|
1,839
|
2,985
|
||||||||||||||
Total non-performing loans
|
75,312
|
83,149
|
151,489
|
|||||||||||||
Securities on non-accrual
|
500
|
1,942
|
1,896
|
|||||||||||||
Real estate owned (REO) and repossessed assets
|
43,039
|
66,538
|
100,945
|
|||||||||||||
Total non-performing assets
|
$
|
118,851
|
$
|
151,629
|
$
|
254,330
|
|
|||||||||
Total non-performing assets / Total assets
|
2.79
|
% |
3.53
|
% |
5.77
|
% | ||||||||||
DETAIL & GEOGRAPHIC CONCENTRATION OF
|
||||||||||||||||
NON-PERFORMING ASSETS AT
|
||||||||||||||||
December 31, 2011
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||
Secured by real estate:
|
||||||||||||||||
Commercial
|
$
|
8,723
|
$
|
368
|
$
|
135
|
$
|
- -
|
$
|
9,226
|
||||||
Multifamily
|
362
|
- -
|
- -
|
- -
|
362
|
|||||||||||
Construction and land
|
||||||||||||||||
One- to four-family construction
|
4,039
|
2,278
|
306
|
- -
|
6,623
|
|||||||||||
Commercial construction
|
949
|
- -
|
- -
|
- -
|
949
|
|||||||||||
Multifamily construction
|
- -
|
- -
|
- -
|
- -
|
- -
|
|||||||||||
Residential land acquisition & development
|
6,668
|
3,709
|
1,592
|
- -
|
11,969
|
|||||||||||
Residential land improved lots
|
1,563
|
3,352
|
73
|
- -
|
4,988
|
|||||||||||
Residential land unimproved
|
702
|
916
|
485
|
- -
|
2,103
|
|||||||||||
Commercial land acquisition & development
|
308
|
- -
|
- -
|
- -
|
308
|
|||||||||||
Commercial land improved
|
454
|
- -
|
- -
|
- -
|
454
|
|||||||||||
Commercial land unimproved
|
337
|
- -
|
- -
|
- -
|
337
|
|||||||||||
Total construction and land
|
15,020
|
10,255
|
2,456
|
- -
|
27,731
|
|||||||||||
One- to four-family
|
14,830
|
3,376
|
1,349
|
- -
|
19,555
|
|||||||||||
Commercial business
|
12,627
|
113
|
724
|
- -
|
13,464
|
|||||||||||
Agricultural business, including secured by farmland
|
1,486
|
- -
|
410
|
- -
|
1,896
|
|||||||||||
Consumer
|
2,441
|
131
|
506
|
- -
|
3,078
|
|||||||||||
Total non-performing loans
|
55,489
|
14,243
|
5,580
|
- -
|
75,312
|
|||||||||||
Securities on non-accrual
|
- -
|
- -
|
500
|
- -
|
500
|
|||||||||||
Real estate owned (REO) and repossessed assets
|
18,380
|
17,967
|
6,692
|
- -
|
43,039
|
|||||||||||
Total non-performing assets at end of the period
|
$
|
73,869
|
$
|
32,210
|
$
|
12,772
|
$
|
- -
|
$
|
118,851
|
||||||
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||
(dollars in thousands)
|
||||||||||||||
Quarters Ended | Twelve Months Ended | |||||||||||||
REAL ESTATE OWNED
|
Dec 31, 2011
|
Dec 31, 2010
|
Dec 31, 2011
|
Dec 31, 2010
|
||||||||||
Balance, beginning of period
|
$
|
66,459
|
$
|
107,159
|
$
|
100,872
|
$
|
77,743
|
||||||
Additions from loan foreclosures
|
7,482
|
16,855
|
53,197
|
87,761
|
||||||||||
Additions from capitalized costs
|
150
|
1,650
|
4,404
|
4,006
|
||||||||||
Dispositions of REO
|
(28,299
|
) |
(19,095
|
) |
(99,070
|
) |
(51,651
|
) | ||||||
Gain (loss) on sale of REO
|
(170
|
) |
(524
|
) |
(1,374
|
) |
(1,891
|
) | ||||||
Valuation adjustments in the period
|
(2,657
|
) |
(5,173
|
) |
(15,064
|
) |
(15,096
|
) | ||||||
Balance, end of period
|
$
|
42,965
|
$
|
100,872
|
$
|
42,965
|
$
|
100,872
|
||||||
Quarters Ended
|
||||||||||||||
REAL ESTATE OWNED- FIVE COMPARATIVE QUARTERS
|
Dec 31, 2011
|
Sep 30, 2011
|
Jun 30, 2011
|
Mar 31, 2011
|
Dec 31, 2010
|
|||||||||
Balance, beginning of period
|
$
|
66,459
|
$
|
71,205
|
$
|
94,945
|
$
|
100,872
|
$
|
107,159
|
||||
Additions from loan foreclosures
|
7,482
|
18,881
|
11,918
|
14,916
|
16,855
|
|||||||||
Additions from capitalized costs
|
150
|
1,107
|
1,532
|
1,615
|
1,650
|
|||||||||
Dispositions of REO
|
(28,299
|
) |
(19,440
|
) |
(32,437
|
) |
(18,894
|
) |
(19,095
|
) | ||||
Gain (loss) on sale of REO
|
(170
|
) |
(725
|
) |
58
|
(537
|
) |
(524
|
) | |||||
Valuation adjustments in the period
|
(2,657
|
) |
(4,569
|
) |
(4,811
|
) |
(3,027
|
) |
(5,173
|
) | ||||
Balance, end of period
|
$
|
42,965
|
$
|
66,459
|
$
|
71,205
|
$
|
94,945
|
$
|
100,872
|
||||
REAL ESTATE OWNED- BY TYPE AND STATE
|
Washington
|
Oregon
|
Idaho
|
Total
|
||||||||||
Commercial real estate
|
$
|
1,852
|
$
|
- -
|
$
|
1,620
|
$
|
3,472
|
||||||
One- to four-family construction
|
405
|
2,323
|
- -
|
2,728
|
||||||||||
Land development- commercial
|
3,876
|
112
|
200
|
4,188
|
||||||||||
Land development- residential
|
5,333
|
11,881
|
3,316
|
20,530
|
||||||||||
One- to four-family real estate
|
6,896
|
3,651
|
1,500
|
12,047
|
||||||||||
Total
|
$
|
18,362
|
$
|
17,967
|
$
|
6,636
|
$
|
42,965
|
DEPOSITS & OTHER BORROWINGS
|
||||||||||||||||||||
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
||||||||||||||||||
DEPOSIT COMPOSITION
|
||||||||||||||||||||
Non-interest-bearing
|
$ | 777,563 | $ | 763,008 | $ | 600,457 | ||||||||||||||
Interest-bearing checking
|
362,542 | 362,090 | 357,702 | |||||||||||||||||
Regular savings accounts
|
669,596 | 670,210 | 616,512 | |||||||||||||||||
Money market accounts
|
415,456 | 429,083 | 459,034 | |||||||||||||||||
Interest-bearing transaction & savings accounts
|
1,447,594 | 1,461,383 | 1,433,248 | |||||||||||||||||
Interest-bearing certificates
|
1,250,497 | 1,313,043 | 1,557,493 | |||||||||||||||||
Total deposits
|
$ | 3,475,654 | $ | 3,537,434 | $ | 3,591,198 | ||||||||||||||
INCLUDED IN TOTAL DEPOSITS
|
||||||||||||||||||||
Public transaction accounts
|
$ | 72,064 | $ | 67,753 | $ | 64,482 | ||||||||||||||
Public interest-bearing certificates
|
67,112 | 69,321 | 81,809 | |||||||||||||||||
Total public deposits
|
$ | 139,176 | $ | 137,074 | $ | 146,291 | ||||||||||||||
Total brokered deposits
|
$ | 49,194 | $ | 59,576 | $ | 102,984 | ||||||||||||||
INCLUDED IN OTHER BORROWINGS
|
||||||||||||||||||||
Customer repurchase agreements / "Sweep accounts"
|
$ | 102,131 | $ | 89,633 | $ | 125,140 | ||||||||||||||
GEOGRAPHIC CONCENTRATION OF DEPOSITS AT
|
||||||||||||||||||||
December 31, 2011
|
Washington
|
Oregon
|
Idaho
|
Total
|
||||||||||||||||
$ | 2,657,016 | $ | 595,801 | $ | 222,837 | $ | 3,475,654 | |||||||||||||
Minimum for Capital Adequacy | ||||||||||||||||||||
REGULATORY CAPITAL RATIOS AT
|
Actual |
or "Well Capitalized"
|
||||||||||||||||||
December 31, 2011
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||
Banner Corporation-consolidated
|
||||||||||||||||||||
Total capital to risk-weighted assets
|
$ | 615,091 | 18.07 | % | $ | 272,242 | 8.00 | % | ||||||||||||
Tier 1 capital to risk-weighted assets
|
572,036 | 16.80 | % | 136,121 | 4.00 | % | ||||||||||||||
Tier 1 leverage capital to average assets
|
572,036 | 13.44 | % | 169,639 | 4.00 | % | ||||||||||||||
Banner Bank
|
||||||||||||||||||||
Total capital to risk-weighted assets
|
511,614 | 15.81 | % | 323,499 | 10.00 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets
|
470,668 | 14.54 | % | 194,100 | 6.00 | % | ||||||||||||||
Tier 1 leverage capital to average assets
|
470,668 | 11.71 | % | 200,955 | 5.00 | % | ||||||||||||||
Islanders Bank
|
||||||||||||||||||||
Total capital to risk-weighted assets
|
30,627 | 16.06 | % | 19,068 | 10.00 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets
|
28,237 | 14.81 | % | 11,441 | 6.00 | % | ||||||||||||||
Tier 1 leverage capital to average assets
|
28,237 | 12.08 | % | 11,689 | 5.00 | % |
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||
(rates / ratios annualized)
|
|||||||||||||||||||||
Quarters Ended
|
Twelve Months Ended | ||||||||||||||||||||
OPERATING PERFORMANCE
|
Dec 31, 2011
|
Sep 30, 2011
|
Dec 31, 2010
|
Dec 31, 2011
|
Dec 31, 2010
|
||||||||||||||||
Average loans
|
$ | 3,237,305 | $ | 3,271,728 | $ | 3,458,400 | $ | 3,297,650 | $ | 3,607,151 | |||||||||||
Average securities
|
670,807 | 544,468 | 418,647 | 548,446 | 398,297 | ||||||||||||||||
Average interest earning cash
|
148,070 | 224,993 | 368,194 | 219,025 | 291,968 | ||||||||||||||||
Average non-interest-earning assets
|
207,609 | 206,420 | 254,242 | 215,646 | 262,888 | ||||||||||||||||
Total average assets
|
$ | 4,263,791 | $ | 4,247,609 | $ | 4,499,483 | $ | 4,280,767 | $ | 4,560,304 | |||||||||||
Average deposits
|
$ | 3,477,587 | $ | 3,498,594 | $ | 3,669,442 | $ | 3,510,274 | $ | 3,768,748 | |||||||||||
Average borrowings
|
294,675 | 270,648 | 344,906 | 292,555 | 350,636 | ||||||||||||||||
Average non-interest-bearing liabilities
|
(38,703 | ) | (41,337 | ) | (38,355 | ) | (40,266 | ) | (37,378 | ) | |||||||||||
Total average liabilities
|
3,733,559 | 3,727,905 | 3,975,993 | 3,762,563 | 4,082,006 | ||||||||||||||||
Total average stockholders' equity
|
530,232 | 519,704 | 523,490 | 518,204 | 478,298 | ||||||||||||||||
Total average liabilities and equity
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$ | 4,263,791 | $ | 4,247,609 | $ | 4,499,483 | $ | 4,280,767 | $ | 4,560,304 | |||||||||||
Interest rate yield on loans
|
5.53 | % | 5.53 | % | 5.67 | % | 5.59 | % | 5.70 | % | |||||||||||
Interest rate yield on securities
|
1.92 | % | 2.75 | % | 2.46 | % | 2.32 | % | 2.91 | % | |||||||||||
Interest rate yield on cash
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0.23 | % | 0.26 | % | 0.26 | % | 0.23 | % | 0.24 | % | |||||||||||
Interest rate yield on interest-earning assets
|
4.74 | % | 4.87 | % | 4.88 | % | 4.86 | % | 5.07 | % | |||||||||||
Interest rate expense on deposits
|
0.59 | % | 0.70 | % | 1.03 | % | 0.75 | % | 1.39 | % | |||||||||||
Interest rate expense on borrowings
|
2.28 | % | 2.44 | % | 2.24 | % | 2.33 | % | 2.28 | % | |||||||||||
Interest rate expense on interest-bearing liabilities
|
0.72 | % | 0.82 | % | 1.13 | % | 0.87 | % | 1.46 | % | |||||||||||
Interest rate spread
|
4.02 | % | 4.05 | % | 3.75 | % | 3.99 | % | 3.61 | % | |||||||||||
Net interest margin
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4.07 | % | 4.10 | % | 3.81 | % | 4.05 | % | 3.67 | % | |||||||||||
Other operating income / Average assets
|
0.67 | % | 0.97 | % | 0.67 | % | 0.79 | % | 0.64 | % | |||||||||||
Other operating income EXCLUDING fair value and OTTI
|
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adjustments / Average assets (1)
|
0.83 | % | 0.78 | % | 0.73 | % | 0.74 | % | 0.69 | % | |||||||||||
Other operating expense / Average assets
|
3.60 | % | 3.83 | % | 3.62 | % | 3.69 | % | 3.53 | % | |||||||||||
Efficiency ratio (other operating expense / revenue)
|
79.34 | % | 78.82 | % | 84.88 | % | 79.62 | % | 86.03 | % | |||||||||||
Return (Loss) on average assets
|
0.47 | % | 0.56 | % | (1.12 | %) | 0.13 | % | (1.36 | %) | |||||||||||
Return (Loss) on average equity
|
3.79 | % | 4.60 | % | (9.62 | %) | 1.05 | % | (12.94 | %) | |||||||||||
Return (Loss) on average tangible equity (2)
|
3.84 | % | 4.67 | % | (9.78 | %) | 1.07 | % | (13.21 | %) | |||||||||||
Average equity / Average assets
|
12.44 | % | 12.24 | % | 11.63 | % | 12.11 | % | 10.49 | % | |||||||||||
(1)
|
- Earnings information excluding fair value and OTTI adjustments (alternately referred to as other operating income from
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core operations or revenues from core operations) represent non-GAAP financial measures.
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(2)
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- Average tangible equity excludes core deposit and other intangibles and represents a non-GAAP financial measure.
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