0000939057-12-000116.txt : 20120424 0000939057-12-000116.hdr.sgml : 20120424 20120424082101 ACCESSION NUMBER: 0000939057-12-000116 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20120423 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120424 DATE AS OF CHANGE: 20120424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANNER CORP CENTRAL INDEX KEY: 0000946673 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 911691604 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26584 FILM NUMBER: 12774580 BUSINESS ADDRESS: STREET 1: 10 S FIRST AVENUE CITY: WALLA WALLA STATE: WA ZIP: 99362 BUSINESS PHONE: 5095273636 MAIL ADDRESS: STREET 1: 10 S FIRST AVENUE CITY: WALLA WALLA STATE: WA ZIP: 99362 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WASHINGTON BANCORP INC /WA/ DATE OF NAME CHANGE: 19980727 FORMER COMPANY: FORMER CONFORMED NAME: FIRST SAVINGS BANK OF WASHINGTON BANCORP INC DATE OF NAME CHANGE: 19950614 8-K 1 k842312.htm BANNER CORPORATION FORM 8-K k842312.htm
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): April 23, 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)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

G
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

G
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

G
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

G
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

Item 2.02  Results of Operations and Financial Condition

On April 23, 2012, Banner Corporation issued its earnings release for the quarter ended March 31, 2012.  A copy of the earnings release is furnished herewith as Exhibit 99.1, which is incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits

(d)             Exhibits

The following exhibit is being furnished herewith and this list shall constitute the exhibit index:

99.1           Press Release of Banner Corporation dated April 23, 2012.




 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 
BANNER CORPORATION
   
   
   
Date: April 23, 2012
By: /s/Mark J. Grescovich                             
 
       Mark J. Grescovich
 
       President and
         Chief Executive Officer
   


 
EX-99.1 2 ex99142312.htm EXHIBIT 99.1 ex99142312.htm
Exhibit 99.1

 
     
Contact: Mark J. Grescovich,
President & CEO
Lloyd W. Baker, CFO
(509) 527-3636
 
News Release
 

Banner Corporation Earns $9.2 Million, or $0.40 Per Diluted Share, in First Quarter;
Net Income Highlighted by Strong Revenue Generation and Improved Credit Quality

Walla Walla, WA – April 23, 2012 - Banner Corporation (NASDAQ GSM: BANR), the parent company of Banner Bank and Islanders Bank, today reported that net income increased to $9.2 million in the first quarter of 2012, compared to net income of $5.1 million in the preceding quarter.  In the first quarter a year ago Banner reported a net loss of $7.8 million.
 
“Banner’s first quarter operating results provided further evidence, and confirmed through the hard work of our employees throughout the Company, that we are successfully executing on our strategies to strengthen our franchise and deliver sustainable profitability,” said Mark J. Grescovich, President and Chief Executive Officer.  “Our return to profitability for the last four quarters reflects significant progress on the key objectives of our turnaround plan.  Banner’s operating performance again showed improvement on every key metric compared to the first quarter a year ago.  Our first quarter revenues from core operations* (net interest income before the provision for loan losses plus total other operating income excluding fair value and other-than-temporary impairment (OTTI) adjustments) increased 7% when compared to the first quarter a year ago. Our net interest margin expanded to 4.11% in the first quarter compared to 3.94% in the first quarter a year ago, our deposit fee income remained strong, increasing by 11% compared to the first quarter a year ago, and revenues from mortgage banking, which increased by 37% compared to the immediately preceding quarter, were nearly three times larger than the first quarter of 2011. This progress clearly demonstrates that our strategic turnaround plan is effective and is building shareholder value.”
 
In the first quarter of 2012, Banner paid a $1.6 million dividend on the $124 million of senior preferred stock it issued to the U.S. Department of the Treasury under the Capital Purchase Program.  In addition, Banner accrued $454,000 for related discount accretion.  Including the preferred stock dividend and related accretion, net income available to common shareholders was $0.40 per share for the first quarter of 2012, compared to net income available to common shareholders of $0.18 per share in the fourth quarter of 2011 and a net loss to common shareholders of $0.60 per share for the first quarter a year ago.
 
First Quarter 2012 Highlights (compared to first quarter 2011 except as noted)
 
·  
Net income was $9.2 million, compared to a net loss of $7.8 million in the first quarter a year ago.
·  
Revenues from core operations*  increased 7% to $50.4 million.
·  
The net interest margin improved to 4.11%, compared to 4.07% in the preceding quarter and 3.94% for the first quarter of 2011.
·  
Net interest income before provision for loan losses increased 3%.
·  
Deposit fees and service charges increased 11%.
·  
Mortgage banking revenues increased 175%.
·  
Non-performing assets decreased to $93.1 million at March 31, 2012, a 22% decrease compared to three months earlier and a 59% decrease compared to a year earlier.
·  
Non-performing loans decreased to $64.9 million at March 31, 2012, a 14% decrease compared to three months earlier and a 51% decrease compared to a year earlier.
·  
Real estate owned and repossessed assets decreased to $27.7 million at March 31, 2012, a 36% decrease compared to three months earlier and a 71% decrease compared to a year earlier.

Credit Quality
 
“Improving the risk profile of Banner and aggressively managing our troubled assets has been and will remain a primary focus for the Company.  We continue to show good progress as nonperforming assets have been reduced nearly 22% compared to the fourth quarter of 2011 and 59% compared to a year ago.  Credit costs continue to decline and were significantly below those of a year ago as our special asset teams continued to make meaningful progress at reducing problem assets,” said Grescovich.
 
 
 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 2
 
 
Banner recorded a $5.0 million provision for loan losses in the first quarter of 2012, equal to the provision in the preceding quarter and substantially lower than the $17.0 million provision recorded in the first quarter a year ago.  The allowance for loan losses at March 31, 2012 totaled $81.5 million, representing 2.52% of total loans outstanding and 126% of non-performing loans.  Non-performing loans decreased 14% to $64.9 million at March 31, 2012, compared to $75.3 million three months earlier, and decreased 51% when compared to $131.7 million a year earlier.
 
Banner’s real estate owned and repossessed assets decreased 36% to $27.7 million at March 31, 2012, compared to $43.0 million three months earlier and decreased 71% when compared to $95.0 million a year ago.  Net charge-offs in the first quarter of 2012 totaled $6.4 million, or 0.20% of average loans outstanding, compared to $8.2 million, or 0.25% of average loans outstanding for the fourth quarter of 2011 and $16.8 million, or 0.50% of average loans outstanding, for the first quarter a year ago.
 
Non-performing assets decreased 22% to $93.1 million at March 31, 2012, compared to $118.9 million three months earlier and decreased 59% when compared to $228.6 million a year ago.  At March 31, 2012, Banner’s non-performing assets were 2.24% of total assets, compared to 2.79% at December 31, 2011 and 5.32% a year ago.
 
Income Statement Review
 
“The improvement in our net interest margin largely reflects continuing reductions in our funding costs, particularly in our deposit costs, and a significant reduction in the adverse effect of non-performing assets.  This reduced cost of funds coupled with changes in our asset mix made it possible for us to maintain a strong net interest margin in recent quarters and to increase it by 17 basis points compared to the first quarter a year ago, despite continued downward pressure on asset yields,” said Grescovich.  Banner’s net interest margin was 4.11% in the first quarter of 2012, compared to 4.07% in the preceding quarter and 3.94% in the first quarter a year ago.
 
Deposit costs decreased by seven basis points in the first quarter compared to the preceding quarter and 37 basis points compared to the first quarter a year earlier.  Total funding costs for the first quarter of 2012 decreased six basis points compared to the previous quarter and 34 basis points from the first quarter a year ago.  Asset yields decreased two basis points compared to the prior quarter and decreased 16 basis points from the first quarter a year ago.  Loan yields decreased nine basis points compared to the preceding quarter and decreased 22 basis points from the first quarter a year ago.  Nonaccrual loans reduced the margin by approximately 13 basis points in the first quarter of 2012 compared to approximately 14 basis points in the preceding quarter and approximately 27 basis points in the first quarter of 2011.
 
“The continued growth in core deposits and the reduced drag from non-performing assets over the past year have led to a solid increase in our revenues from core operations* compared to the first quarter last year,” said Grescovich.  First quarter net interest income, before the provision for loan losses, was $41.1 million, compared to $41.6 million in the preceding quarter and $40.1 million in the first quarter a year ago.  Revenues from core operations* were $50.4 million in the first quarter of 2012, compared to $50.5 million in the fourth quarter of 2011 and $47.0 million in the first quarter a year ago.
 
Banner’s first quarter 2012 results included a net gain of $1.7 million for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value.  In the preceding quarter Banner recorded a net loss of $1.8 million for fair value adjustments and in the first quarter of 2011 Banner recorded a net gain of $256,000 for fair value adjustments.
 
Total other operating income, which includes the above-mentioned changes in the valuation of financial instruments, was $11.0 million in the first quarter of 2012 compared to $7.2 million in both the preceding quarter and the first quarter a year ago.  Other operating income from core operations* (total other operating income, excluding fair value and OTTI adjustments) for the current quarter was $9.3 million, compared to $8.9 million for the preceding quarter and $7.0 million for the first quarter a year ago.
 
Deposit fees and other service charges were $5.9 million in the first quarter of 2012, equal to the preceding quarter and an 11% increase compared to $5.3 million in the first quarter a year ago.  As a result of exceptionally strong homeowner refinance activity, revenues from mortgage banking activities increased 37% to $2.7 million in the first quarter of 2012, compared to $1.9 million in the immediately preceding quarter.  Income from mortgage banking operations was $962,000 in the first quarter of 2011.
 
“Operating expenses declined for the first quarter compared to the preceding quarter and the first quarter a year ago, largely due to lower costs associated with the real estate owned portfolio, particularly valuation adjustments,” said Grescovich.  “These credit costs should continue to decline as further problem asset resolution occurs.”
 
Total other operating expenses (non-interest expenses) were $37.9 million in the first quarter of 2012, compared to $38.7 million in the preceding quarter and $38.1 million in the first quarter of 2011.  The decrease was largely a result of decreased costs related to real estate owned and FDIC deposit insurance, partially offset by increased compensation-related expenses.
 
 
 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 3
 
*Earnings information excluding fair value and other-than-temporary impairment (OTTI) adjustments (alternately referred to as other operating income from core operations or revenues from core operations) represent non-GAAP (Generally Accepted Accounting Principles) financial measures.  Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company’s core operations reflected in the current quarter’s results.  Where applicable, the Company has also presented comparable earnings information using GAAP financial measures.
 
 
Balance Sheet Review
 
“Loan balances declined slightly compared to the previous quarter, primarily as a result of the expected seasonal pay down of agricultural loans, the impact of refinancing activity on residential mortgage loans and further reductions in land development loans.  Production levels for targeted loans remained encouraging, resulting in a consistent pipeline of lending opportunities and modest growth in commercial business loans.  While we expect a continued challenging economic environment, we believe that our well-focused marketing efforts to attract business clients will allow us to capitalize on additional lending opportunities going forward,” said Grescovich.
 
Net loans were $3.15 billion at March 31, 2012, compared to $3.21 billion at December 31, 2011 and $3.23 billion a year ago.  Commercial and agricultural business loans were $798.5 million at March 31, 2012 compared to $819.6 million at December 31, 2011 and $765.9 million a year ago.  Commercial real estate and multi-family real estate loans were $1.21 billion at March 31, 2012, compared to $1.23 billion at both December 31, 2011 and at March 31, 2011.
 
The combined total of securities at fair value, available for sale and held to maturity, was $541.3 million at March 31, 2012 compared to $622.0 million at December 31, 2011 and $407.0 million at March 31, 2011.  The aggregate total of securities and interest-bearing deposits decreased to $685.2 million at March 31, 2012 compared to $691.7 million at December 31, 2011 and $678.9 million a year ago.  The change in the mix of interest-bearing deposits and securities holdings compared to a year ago reflects a modest extension of the expected duration of this aggregate position designed to increase the yield relative to interest-bearing deposits.  The securities purchased in recent periods were primarily short- to intermediate-term U.S. Government Agency notes and mortgage-backed securities and, to a lesser extent, intermediate-term tax-exempt municipal securities.
 
Deposits totaled $3.43 billion at March 31, 2012, compared to $3.48 billion at the end of the preceding quarter and $3.54 billion a year ago.  Non-interest-bearing accounts increased 24% to $771.8 million at March 31, 2012, compared to $622.8 million a year ago.  At December 31, 2011, non-interest-bearing accounts totaled $777.6 million.  Interest-bearing transaction and savings accounts were $1.46 billion at March 31, 2012, compared to $1.45 billion at December 31, 2011 and $1.46 billion a year ago.
 
“The improvements in our deposit mix are reflective of our super community bank strategy that is reducing our funding cost by remixing our deposits away from high-priced CDs, growing new client relationships, and improving our core funding position.  To that point, total transaction and savings accounts increased by 7% compared to a year ago and non-interest-bearing accounts increased by 24% over the same period,” said Grescovich.
 
On March 31, 2012, Banner Bank repaid a $50 million, three-year borrowing that was guaranteed under the FDIC Temporary Liquidity Guarantee Program (TLGP) as reflected in other borrowings on the attached financial statements.   Assets totaled $4.16 billion at March 31, 2012, compared to $4.26 billion at the end of the preceding quarter and $4.30 billion a year ago.
 
At March 31, 2012, total stockholders’ equity was $548.8 million, including $121.2 million attributable to preferred stock, and common stockholders’ equity was $427.6 million, or $23.77 per share.  In May 2011, Banner announced a 1-for-7 reverse stock split, which took effect on June 1, 2011.  Every seven shares of Banner’s pre-split common shares were automatically consolidated into one post-split share.  Taking the reverse stock split into account, Banner had 18.0 million shares outstanding at March 31, 2012, compared to 16.4 million shares outstanding a year ago.  At March 31, 2012, tangible common stockholders’ equity, which excludes other intangible assets and  preferred stock, was $421.9 million, or 10.15% of tangible assets, compared to $405.4 million, or 9.54% of tangible assets at December 31, 2011 and $377.3 million, or 8.79% of tangible assets a year ago.
 
Banner Corporation and its subsidiary banks continue to maintain capital levels significantly in excess of the requirements to be categorized as “well-capitalized” under applicable regulatory standards.  Banner Corporation’s Tier 1 leverage capital to average assets ratio increased to 14.00% and its total capital to risk-weighted assets ratio increased to 18.98% at March 31, 2012.
 
Regulatory Agreements
 
On March 19, 2012, Banner Bank received notice from the FDIC and the Washington Department of Financial Institutions terminating their Memorandum of Understanding with Banner Bank dated March 23, 2010.  On April 10, 2012, Banner Corporation received notice from the Federal Reserve Bank of San Francisco terminating its Memorandum of Understanding with Banner Corporation dated March 29, 2010.
 
 
 
 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 4

 
Conference Call
 
Banner will host a conference call on Tuesday, April 24, 2012, at 8:00 a.m. PDT, to discuss its first quarter results.  The conference call can be accessed live by telephone at (480) 629-9692 to participate in the call.  To listen to the call online, go to the Company’s website at www.bannerbank.com.  A replay will be available for a week at (303) 590-3030, using access code 4527868.
 
About the Company
 
Banner Corporation is a $4.16 billion bank holding company operating two commercial banks in Washington, Oregon and Idaho.  Banner serves the Pacific Northwest region with a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans.  Visit Banner Bank on the Web at www.bannerbank.com.
 
This press release contains statements that the Company believes are “forward-looking statements.” These statements relate to the Company’s financial condition, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially include, but are not limited to, the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets and may lead to increased losses and non-performing assets and may result in our allowance for loan losses not being adequate to cover actual losses; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates and the relative differences between short and long-term interest rates, loan and deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Board of Governors of the Federal Reserve System and of our bank subsidiaries by the FDIC, the Washington Department of Financial Institutions or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or any of the Banks which could require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; our ability to attract and retain deposits; increases in premiums for deposit insurance; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets and liabilities, which estimates may prove to be incorrect and result in significant changes in valuations; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; the failure or security breach of computer systems on which we depend; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common and preferred stock and interest or principal payments on our junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of war or terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks detailed in Banner Corporation’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2012 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect our operating and stock price performance.

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 5
 
RESULTS OF OPERATIONS
       Quarters Ended
(in thousands except shares and per share data)
    
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
                     
INTEREST INCOME
              
 
Loans receivable
    
$
           43,988
$
          45,115
$
          46,755
 
Mortgage-backed securities
    
                927
  
               922
  
               875
 
Securities and cash equivalents
    
             2,283
  
            2,414
  
            2,033
           
           47,198
  
          48,451
  
          49,663
INTEREST EXPENSE
              
 
Deposits
      
             4,448
  
            5,169
  
            7,812
 
Federal Home Loan Bank advances
    
                  63
  
                 64
  
               178
 
Other borrowings
      
                549
  
               559
  
               579
 
Junior subordinated debentures
    
             1,012
  
            1,073
  
            1,038
           
             6,072
  
            6,865
  
            9,607
 
Net interest income before provision for loan losses
    
           41,126
  
          41,586
  
          40,056
                     
PROVISION FOR LOAN LOSSES
    
             5,000
  
            5,000
  
          17,000
 
Net interest income
      
           36,126
  
          36,586
  
          23,056
                     
OTHER OPERATING INCOME
              
 
Deposit fees and other service charges
    
             5,869
  
            5,894
  
            5,279
 
Mortgage banking operations
    
             2,649
  
            1,936
  
               962
 
Loan servicing fees
      
                217
  
               136
  
               256
 
Miscellaneous
      
                551
  
               972
  
               493
           
9,286
  
8,938
  
6,990
 
Net change in valuation of financial instruments carried at fair value
             1,685
  
           (1,787)
  
               256
 
Total other operating income
    
           10,971
  
            7,151
  
            7,246
                     
OTHER OPERATING EXPENSE
              
 
Salary and employee benefits
    
           19,510
  
          18,730
  
          17,255
 
Less capitalized loan origination costs
    
           (2,250)
  
           (2,404)
  
          (1,720)
 
Occupancy and equipment
    
             5,477
  
            5,379
  
            5,394
 
Information / computer data services
    
             1,515
  
            1,388
  
            1,567
 
Payment and card processing services
    
             1,890
  
            2,156
  
            1,647
 
Professional services
      
             1,344
  
            1,210
  
            1,672
 
Advertising and marketing
    
             2,066
  
            2,036
  
            1,740
 
Deposit insurance
      
             1,363
  
            1,367
  
            1,969
 
State/municipal business and use taxes
    
                568
  
               562
  
               494
 
Real estate operations
    
             2,598
  
            4,365
  
            4,631
 
Amortization of core deposit intangibles
    
                552
  
               555
  
               597
 
Miscellaneous
      
             3,280
  
            3,323
  
            2,898
 
Total other operating expense
    
           37,913
  
          38,667
  
          38,144
 
Income (loss) before provision for (benefit from) income taxes
  
             9,184
  
            5,070
  
          (7,842)
                     
PROVISION FOR  (BENEFIT FROM ) INCOME TAXES
  
                  - -
  
                  - -
  
                 - -
NET INCOME (LOSS)
      
             9,184
  
            5,070
  
          (7,842)
                     
PREFERRED STOCK DIVIDEND AND DISCOUNT ACCRETION
            
 
Preferred stock dividend
    
             1,550
  
            1,550
  
            1,550
 
Preferred stock discount accretion
    
                454
  
               425
  
               426
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
             7,180
$
            3,095
$
          (9,818)
                     
Earnings (loss) per share available to common shareholder
            
   
Basic
    
$
               0.40
$
              0.18
$
            (0.60)
   
Diluted
    
$
               0.40
$
              0.18
$
            (0.60)
                     
Cumulative dividends declared per common share
  
$
               0.01
$
              0.01
$
              0.07
                     
Weighted average common shares outstanding
              
   
Basic
      
    17,761,667
  
   17,269,269
  
   16,271,621
   
Diluted
      
    17,790,402
  
   17,298,004
  
   16,271,621
Common shares issued in connection with exercise of stock options or DRIP
         474,296
  
        522,223
  
        278,940

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 6
 
FINANCIAL  CONDITION
              
(in thousands except shares and per share data)
    
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
                   
ASSETS
              
Cash and due from banks
  
$
             55,723 
$
             62,678 
$
             44,381 
Federal funds and interest-bearing deposits
    
           143,885 
 
             69,758 
 
           271,924 
Securities - at fair value
      
             77,706 
 
             80,727 
 
             90,881 
Securities - available for sale
    
           386,716 
 
           465,795 
 
           240,968 
Securities - held to maturity
    
             76,853 
 
             75,438 
 
             75,114 
Federal Home Loan Bank stock
    
             37,371 
 
             37,371 
   
             37,371 
Loans receivable:
                
 
Held for sale
      
               4,623 
 
               3,007 
 
               1,493 
 
Held for portfolio
      
        3,225,039 
 
        3,293,331 
 
        3,324,587 
 
Allowance for loan losses
    
            (81,544)
  
           (82,912)
  
            (97,632)
         
        3,148,118 
  
        3,213,426 
 
        3,228,448 
                   
Accrued interest receivable
    
             16,047 
 
             15,570 
   
             16,503 
Real estate owned held for sale, net
    
             27,723 
 
             42,965 
 
             94,945 
Property and equipment, net
    
             90,106 
 
             91,435 
 
             94,743 
Other intangibles, net
      
               5,777 
  
               6,331 
 
               8,011 
Bank-owned life insurance
      
             59,056 
 
             58,563 
 
             57,123 
Other assets
      
             35,683 
 
             37,255 
 
             39,291 
       
$
        4,160,764 
$
        4,257,312 
$
        4,299,703 
LIABILITIES
              
                   
Deposits:
                
 
Non-interest-bearing
    
$
           771,812 
$
           777,563 
$
           622,759 
 
Interest-bearing transaction and savings accounts
  
        1,457,030 
 
        1,447,594 
 
        1,459,895 
 
Interest-bearing certificates
    
        1,197,328 
 
        1,250,497 
 
        1,457,994 
         
        3,426,170 
 
        3,475,654 
 
        3,540,648 
                   
Advances from Federal Home Loan Bank at fair value
  
             10,467 
 
             10,533 
 
             10,567 
Customer repurchase agreements and other borrowings
  
             91,253 
 
           152,128 
 
           159,902 
Junior subordinated debentures at fair value
    
             49,368 
 
             49,988 
 
             48,395 
                   
Accrued expenses and other liabilities
    
             21,136 
 
             23,253 
 
             20,958 
Deferred compensation
      
             13,580 
 
             13,306 
 
             14,489 
            
        3,611,974 
 
        3,724,862 
 
        3,794,959 
STOCKHOLDERS' EQUITY
              
                   
Preferred stock - Series A
      
           121,156 
 
           120,702 
 
           119,426 
Common stock
      
           540,068 
 
           531,149 
 
           513,950 
Retained earnings (accumulated deficit)
    
          (112,465)
  
         (119,465)
  
          (126,318)
Other components of stockholders' equity
    
                    31 
 
                    64 
 
              (2,314)
         
           548,790 
 
           532,450 
 
           504,744 
       
$
        4,160,764 
$
        4,257,312 
$
        4,299,703 
Common Shares Issued:
              
Shares outstanding at end of period
    
      18,027,768 
 
      17,553,472 
 
      16,443,720 
 
Less unearned ESOP shares at end of period
    
             34,340 
 
             34,340 
 
             34,340 
Shares outstanding at end of period excluding unearned ESOP shares
  
      17,993,428 
 
      17,519,132 
 
      16,409,380 
                   
Common stockholders' equity per share (1)
  
$
               23.77 
$
               23.50 
$
               23.48 
Common stockholders' tangible equity per share (1) (2)
$
               23.45 
$
               23.14 
$
               22.99 
Common stockholders' tangible equity to tangible assets (2)
  
10.15%
  
9.54%
  
8.79%
Consolidated Tier 1 leverage capital ratio
    
14.00%
  
13.44%
  
12.50%
(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 core deposits and preferred stock, core deposit and other intangibles.
 
  Tangible assets excludes other intangible assets.  These ratios represent non-GAAP financial measures.

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 7
 
ADDITIONAL FINANCIAL INFORMATION
                        
 
(dollars in thousands)
                          
             
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
          
 
LOANS (including loans held for sale)
                        
 
Commercial real estate
                          
   
Owner occupied
    
$
              468,318
$
              469,806
$
              521,823
          
   
Investment properties
      
              612,617
  
              621,622
  
              564,337
          
 
Multifamily real estate
      
              132,306
  
              139,710
  
              147,569
          
 
Commercial construction
      
                40,276
  
                42,391
  
                26,580
          
 
Multifamily construction
      
                20,654
  
                19,436
  
                19,694
          
 
One- to four-family construction
    
              148,717
  
              144,177
  
              151,015
          
 
Land and land development
                          
   
Residential
      
                89,329
  
                97,491
  
              147,913
          
   
Commercial
      
                12,044
  
                15,197
  
                30,539
          
 
Commercial business
      
              609,497
  
              601,440
  
              577,128
          
 
Agricultural business including secured by farmland
  
              188,955
  
              218,171
  
              188,756
          
 
One- to four-family real estate
    
              619,511
  
              642,501
  
              665,396
          
 
Consumer
      
              106,978
  
              103,347
  
              104,129
          
 
Consumer secured by one- to four-family real estate
  
              180,460
  
              181,049
  
              181,201
          
     
Total loans outstanding
    
$
           3,229,662
$
           3,296,338
$
           3,326,080
          
 
Restructured loans performing under their restructured terms
$
                53,391
$
                54,533
$
                60,968
          
 
Loans 30 - 89 days past due and on accrual
  
$
                14,336
$
                  9,962
$
                16,587
          
 
Total delinquent loans (including loans on non-accrual)
$
                79,249
$
                85,274
$
              148,285
          
 
Total delinquent loans  /  Total loans outstanding
  
2.45%
  
2.59%
  
4.46%
          
                                 
 
GEOGRAPHIC CONCENTRATION OF LOANS AT
                      
     
March 31, 2012
      
Washington
  
Oregon
  
Idaho
  
Other
  
Total
  
                                 
 
Commercial real estate
                          
   
Owner occupied
    
$
              355,126
$
                58,739
$
                51,341
$
                  3,112
$
              468,318
  
   
Investment properties
      
              473,807
  
                91,070
  
                42,581
  
                  5,159
  
              612,617
  
 
Multifamily real estate
      
              110,525
  
                13,210
  
                  8,192
  
                     379
  
              132,306
  
 
Commercial construction
      
                23,748
  
                  6,861
  
                  9,667
  
                       - -
  
                40,276
  
 
Multifamily construction
      
                20,654
  
                       - -
  
                       - -
  
                       - -
  
                20,654
  
 
One- to four-family construction
    
                77,225
  
                69,370
  
                  2,122
  
                       - -
  
              148,717
  
 
Land and land development
                          
   
Residential
      
                47,833
  
                39,135
  
                  2,361
  
                       - -
  
                89,329
  
   
Commercial
      
                  9,338
  
                     887
  
                  1,819
  
                       - -
  
                12,044
  
 
Commercial business
      
              396,611
  
                74,683
  
                67,449
  
                70,754
  
              609,497
  
 
Agricultural business including secured by farmland
  
                99,778
  
                35,073
  
                54,104
  
                       - -
  
              188,955
  
 
One- to four-family real estate
    
              379,602
  
              210,708
  
                26,977
  
                  2,224
  
              619,511
  
 
Consumer
      
                70,662
  
                30,697
  
                  5,619
  
                       - -
  
              106,978
  
 
Consumer secured by one- to four-family real estate
  
              124,494
  
                43,420
  
                12,011
  
                     535
  
              180,460
  
     
Total loans outstanding
    
$
           2,189,403
$
              673,853
$
              284,243
$
                82,163
$
           3,229,662
  
                                 
     
Percent of total loans
      
67.8%
  
20.9%
  
8.8%
  
2.5%
  
100.0%
  
                                 
 
DETAIL OF LAND AND LAND DEVELOPMENT LOANS AT
                    
     
March 31, 2012
      
Washington
  
Oregon
  
Idaho
  
Other
  
Total
  
                                 
 
Residential
                          
   
Acquisition & development
  
$
                12,115
$
                14,708
$
                  1,903
$
                       - -
$
                28,726
  
   
Improved lots
      
                22,615
  
                21,510
  
                     370
  
                       - -
  
                44,495
  
   
Unimproved land
      
                13,103
  
                  2,917
  
                       88
  
                       - -
  
                16,108
  
     
Total residential land and development
  
$
                47,833
$
                39,135
$
                  2,361
$
                       - -
$
                89,329
  
 
Commercial & industrial
                          
   
Acquisition & development
  
$
                  1,555
$
                       - -
$
                     483
$
                       - -
$
                  2,038
  
   
Improved land
      
                  3,458
  
                       - -
  
                     580
  
                       - -
  
                  4,038
  
   
Unimproved land
      
                  4,325
  
                     887
  
                     756
  
                       - -
  
                  5,968
  
     
Total commercial land and development
  
$
                  9,338
$
                     887
$
                  1,819
$
                       - -
$
                12,044
  
 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 8

 
ADDITIONAL FINANCIAL INFORMATION
            
 
(dollars in thousands)
                
             
Quarters Ended
 
CHANGE IN THE
      
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
 
ALLOWANCE FOR LOAN LOSSES
              
                       
 
Balance, beginning of period
  
$
                82,912
$
                86,128
$
                97,401
                       
 
Provision
      
                  5,000
  
                  5,000
  
                17,000
                       
 
Recoveries of loans previously charged off:
            
     
Commercial real estate
    
                     614
  
                       37
  
                       - -
     
Multifamily real estate
    
                       - -
  
                       - -
  
                       - -
     
Construction and land
    
                     370
  
                     762
  
                       35
     
One- to four-family real estate
    
                         5
  
                     241
  
                       52
     
Commercial business
    
                     236
  
                     511
  
                       81
     
Agricultural business, including secured by farmland
                       - -
  
                         5
  
                       - -
     
Consumer
      
                     136
  
                       73
  
                       78
             
                  1,361
  
                  1,629
  
                     246
 
Loans charged off:
                
     
Commercial real estate
    
                (1,323)
  
                (1,575)
  
                   (989)
     
Multifamily real estate
    
                       - -
  
                     (11)
  
                   (427)
     
Construction and land
    
                (2,924)
  
                (3,269)
  
              (10,537)
     
One- to four-family real estate
    
                   (966)
  
                (3,324)
  
                (2,209)
     
Commercial business
    
                (1,407)
  
                (1,172)
  
                (2,368)
     
Agricultural business, including secured by farmland
                   (275)
  
                   (188)
  
                   (123)
     
Consumer
      
                   (834)
  
                   (306)
  
                   (362)
             
                (7,729)
  
                (9,845)
  
              (17,015)
     
Net charge-offs
      
                (6,368)
  
                (8,216)
  
              (16,769)
 
Balance, end of period
    
$
                81,544
$
                82,912
$
                97,632
                       
 
Net charge-offs / Average loans outstanding
  
0.20%
  
0.25%
  
0.50%
                       
 
ALLOCATION OF
                
 
ALLOWANCE FOR LOAN LOSSES
    
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
 
Specific or allocated loss allowance
              
   
Commercial real estate
  
$
                17,083
$
                16,457
$
                11,871
   
Multifamily real estate
    
                  3,261
  
                  3,952
  
                  6,055
   
Construction and land
    
                15,871
  
                18,184
  
                30,346
   
Commercial business
      
                13,123
  
                15,159
  
                22,054
   
Agricultural business, including secured by farmland
  
                  1,887
  
                  1,548
  
                  1,441
   
One- to four-family real estate
    
                12,869
  
                12,299
  
                  8,149
   
Consumer
      
                  1,274
  
                  1,253
  
                  1,452
                       
     
Total allocated
      
65,368
  
68,852
  
81,368
                       
   
Estimated allowance for undisbursed commitments
                     651
  
                     678
  
                  1,158
   
Unallocated
      
                15,525
  
                13,382
  
                15,106
     
Total allowance for loan losses
  
$
81,544
$
82,912
$
97,632
                       
 
Allowance for loan losses / Total loans outstanding
  
2.52%
  
2.52%
  
2.94%
                       
 
Allowance for loan losses / Non-performing loans
  
126%
  
110%
  
74%

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 9
 
 
ADDITIONAL FINANCIAL INFORMATION
                    
 
(dollars in thousands)
                        
               
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
        
 
NON-PERFORMING ASSETS
                      
                                 
 
Loans on non-accrual status
                      
   
Secured by real estate:
                        
       
Commercial
    
$
              10,541
$
                9,226
$
              23,443
        
       
Multifamily
      
                      - -
  
                   362
  
                1,361
        
       
Construction and land
    
              18,601
  
              27,731
  
              67,163
        
       
One- to four-family
      
              19,384
  
              17,408
  
              16,571
        
   
Commercial business
      
              10,121
  
              13,460
  
              15,904
        
   
Agricultural business, including secured by farmland
                1,481
  
                1,896
  
                1,984
        
   
Consumer
      
                2,572
  
                2,905
  
                4,655
        
               
              62,700
  
              72,988
  
            131,081
        
                                 
 
Loans more than 90 days delinquent, still on accrual
                    
   
Secured by real estate:
                        
       
Commercial
      
                      - -
  
                      - -
  
                      - -
        
       
Multifamily
      
                      - -
  
                      - -
  
                      - -
        
       
Construction and land
    
                      - -
  
                      - -
  
                      - -
        
       
One- to four-family
      
                2,129
  
                2,147
  
                   561
        
   
Commercial business
      
                      - -
  
                       4
  
                     14
        
   
Agricultural business, including secured by farmland
                      - -
  
                      - -
  
                      - -
        
   
Consumer
      
                     84
  
                   173
  
                     42
        
               
                2,213
  
                2,324
  
                   617
        
 
Total non-performing loans
      
              64,913
  
              75,312
  
            131,698
        
 
Securities on non-accrual
      
                   500
  
                   500
  
                1,904
        
 
Real estate owned (REO) and repossessed assets
  
              27,731
  
              43,039
  
              94,969
        
       
Total non-performing assets
  
$
              93,144
$
            118,851
$
            228,571
        
                                 
 
Total non-performing assets  /  Total assets
  
2.24%
  
2.79%
  
5.32%
        
                                 
 
DETAIL & GEOGRAPHIC CONCENTRATION OF
                    
   
NON-PERFORMING ASSETS AT
                    
       
March 31, 2012
    
Washington
  
Oregon
  
Idaho
  
Other
  
Total
 
Secured by real estate:
                        
   
Commercial
    
$
                7,698
$
                   355
$
                2,488
$
                      - -
$
              10,541
   
Multifamily
      
                      - -
  
                      - -
  
                      - -
  
                      - -
  
                      - -
   
Construction and land
                        
     
One- to four-family construction
    
                3,782
  
                2,226
  
                   243
  
                      - -
  
                6,251
     
Commercial construction
    
                   942
  
                      - -
  
                      - -
  
                      - -
  
                   942
     
Multifamily construction
    
                      - -
  
                      - -
  
                      - -
  
                      - -
  
                      - -
     
Residential land acquisition & development
  
                4,691
  
                1,836
  
                      - -
  
                      - -
  
                6,527
     
Residential land improved lots
    
                   424
  
                2,309
  
                     73
  
                      - -
  
                2,806
     
Residential land unimproved
    
                   287
  
                   916
  
                     88
  
                      - -
  
                1,291
     
Commercial land acquisition & development
  
                      - -
  
                      - -
  
                      - -
  
                      - -
  
                      - -
     
Commercial land improved
    
                   454
  
                      - -
  
                      - -
  
                      - -
  
                   454
     
Commercial land unimproved
    
                   330
  
                      - -
  
                      - -
  
                      - -
  
                   330
       
Total construction and land
    
              10,910
  
                7,287
  
                   404
  
                      - -
  
              18,601
   
One- to four-family
      
              16,753
  
                3,386
  
                1,374
  
                      - -
  
              21,513
 
Commercial business
      
                9,511
  
                   138
  
                   472
  
                      - -
  
              10,121
 
Agricultural business, including secured by farmland
  
                1,346
  
                      - -
  
                   135
  
                      - -
  
                1,481
 
Consumer
      
                2,128
  
                     25
  
                   503
  
                      - -
  
                2,656
 
Total non-performing loans
      
48,346
  
11,191
  
5,376
  
 - -
  
64,913
 
Securities on non-accrual
      
                      - -
  
                      - -
  
                   500
  
                      - -
  
                   500
 
Real estate owned (REO) and repossessed assets
  
              14,497
  
              10,341
  
                2,893
  
                      - -
  
              27,731
       
Total  non-performing assets at end of the period
$
              62,843
$
              21,532
$
                8,769
$
                      - -
$
              93,144
                                 

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 10
 
ADDITIONAL FINANCIAL INFORMATION
                        
(dollars in thousands)
                          
           Quarters Ended              
REAL ESTATE OWNED
    
Mar 31, 2012
  
Mar 31,2011
              
                             
Balance, beginning of period
  
$
            42,965 
$
          100,872 
             
 
Additions from loan foreclosures
    
              1,601 
 
            14,916 
             
 
Additions from capitalized costs
    
                 127 
 
              1,615 
              
 
Dispositions of REO
      
          (15,441)
  
          (18,894)
              
 
Gain (loss) on sale of REO
    
                 100 
 
               (537)
              
 
Valuation adjustments in the period
    
            (1,629)
  
            (3,027)
              
Balance, end of period
    
$
27,723 
$
94,945 
             
                             
         
Quarters Ended
  
                             
REAL ESTATE OWNED- FIVE COMPARATIVE QUARTERS
  
Mar 31, 2012
  
Dec 31, 2011
  
Sep 30, 2011
  
Jun 30, 2011
  
Mar 31, 2011
  
                             
Balance, beginning of period
  
$
            42,965  
$
            66,459 
$
            71,205 
$
            94,945 
$
          100,872 
 
 
Additions from loan foreclosures
    
              1,601  
 
              7,482 
 
            18,881 
 
            11,918 
   
            14,916 
 
 
Additions from capitalized costs
    
                 127  
 
                 150 
 
              1,107 
 
              1,532 
 
              1,615 
 
 
Dispositions of REO
      
          (15,441)
  
          (28,299)
  
          (19,440)
  
          (32,437)
  
          (18,894)
  
 
Gain (loss) on sale of REO
    
                 100  
 
               (170)
  
               (725)
  
                   58 
 
               (537)
  
 
Valuation adjustments in the period
    
            (1,629)
  
            (2,657)
  
            (4,569)
  
            (4,811)
  
            (3,027)
  
Balance, end of period
    
$
27,723  
$
42,965 
$
66,459 
$
71,205 
$
94,945 
 
                             
REAL ESTATE OWNED- BY TYPE AND STATE
  
Washington
  
Oregon
  
Idaho
  
Total
      
                             
Commercial real estate
    
$
              2,064  
$
                   - - 
$
                 494 
$
              2,558 
     
One- to four-family construction
    
                 405  
 
                 732 
 
                   - - 
 
              1,137 
     
Land development- commercial
    
              3,875  
 
                   75 
 
                 200 
 
              4,150 
     
Land development- residential
    
              4,354  
 
              7,793 
 
              1,181 
 
            13,328 
     
One- to four-family real estate
    
              3,791  
 
              1,741 
 
              1,018 
 
              6,550 
     
Total
    
$
14,489  
$
10,341 
$
2,893 
$
27,723 
     

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 11

DEPOSITS & OTHER BORROWINGS
                    
           
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
      
 
DEPOSIT COMPOSITION
                    
                           
 
Non-interest-bearing
    
$
              771,812
$
              777,563
$
              622,759
      
 
Interest-bearing checking
      
              368,810
  
              362,542
  
              361,430
      
 
Regular savings accounts
      
              673,704
  
              669,596
  
              648,520
      
 
Money market accounts
      
              414,516
  
              415,456
  
              449,945
      
   
Interest-bearing transaction & savings accounts
  
           1,457,030
  
           1,447,594
  
           1,459,895
      
 
Interest-bearing certificates
      
           1,197,328
  
           1,250,497
  
           1,457,994
      
   
Total deposits
    
$
           3,426,170
$
           3,475,654
$
           3,540,648
      
                           
                           
 
INCLUDED IN TOTAL DEPOSITS
                    
                           
 
Public transaction accounts
  
$
                68,590
$
                72,064
$
                62,873
      
 
Public interest-bearing certificates
    
                69,856
  
                67,112
  
                67,527
      
   
Total public deposits
    
$
              138,446
$
              139,176
$
              130,400
      
                           
 
Total brokered deposits
    
$
                30,978
$
                49,194
$
                92,940
      
                           
                           
 
OTHER BORROWINGS
                      
 
Customer repurchase agreements / "Sweep accounts"
$
                91,253
$
              102,131
$
              109,227
      
 
Temporary liquidity guarantee notes
    
                       - -
  
                49,997
  
                49,990
      
 
Other
      
                       - -
  
                       - -
  
                     685
      
 
Total other borrowings
    
$
                91,253
$
              152,128
$
              159,902
      
                           
                           
 
GEOGRAPHIC CONCENTRATION OF DEPOSITS AT
                  
   
March 31, 2012
    
Washington
  
Oregon
  
Idaho
  
Total
  
                           
         
$
           2,599,804
$
              601,842
$
              224,524
$
           3,426,170
  
                           
                           
                           
                           
                   
Minimum for Capital Adequacy
REGULATORY CAPITAL RATIOS AT
  
Actual
  
or "Well Capitalized"
  
   
March 31, 2012
    
Amount
  
Ratio
  
Amount
  
Ratio
  
                           
Banner Corporation-consolidated
                    
   
Total capital to risk-weighted assets
  
$
630,106
  
18.98%
$
265,573
  
8.00%
  
   
Tier 1 capital to risk-weighted assets
    
588,116
  
17.72%
  
132,787
  
4.00%
  
   
Tier 1 leverage capital to average assets
  
588,116
  
14.00%
  
168,018
  
4.00%
  
                           
Banner Bank
                      
   
Total capital to risk-weighted assets
    
519,867
  
16.47%
  
252,445
  
10.00%
  
   
Tier 1 capital to risk-weighted assets
    
479,938
  
15.21%
  
126,223
  
6.00%
  
   
Tier 1 leverage capital to average assets
  
479,938
  
12.10%
  
158,658
  
5.00%
  
                           
Islanders Bank
                      
   
Total capital to risk-weighted assets
    
30,967
  
16.44%
  
15,066
  
10.00%
  
   
Tier 1 capital to risk-weighted assets
    
28,607
  
15.19%
  
7,533
  
6.00%
  
   
Tier 1 leverage capital to average assets
  
28,607
  
12.48%
  
9,172
  
5.00%
  

 
 
 
BANR – First Quarter 2012 Results
April 23, 2012
Page 12
 
ADDITIONAL FINANCIAL INFORMATION
              
(dollars in thousands)
                
(rates / ratios annualized)
              
         
Quarters Ended
                   
OPERATING PERFORMANCE
    
Mar 31, 2012
  
Dec 31, 2011
  
Mar 31, 2011
                   
                   
Average loans
    
$
       3,250,767
$
       3,237,305
$
       3,349,978
Average securities
      
          660,638
  
          670,807
  
          465,017
Average interest earning cash
    
          111,536
  
          148,070
  
          308,575
Average non-interest-earning assets
    
          185,035
  
          207,609
  
          233,365
 
Total average assets
    
$
       4,207,976
$
       4,263,791
$
       4,356,935
                   
Average deposits
    
$
       3,421,448
$
       3,477,587
$
       3,561,020
Average borrowings
      
          280,439
  
          294,675
  
          322,261
Average non-interest-bearing other liabilities
    
          (36,699)
  
          (38,703)
  
          (39,755)
 
Total average liabilities
    
       3,665,188
  
       3,733,559
  
       3,843,526
Total average stockholders' equity
    
          542,788
  
          530,232
  
          513,409
 
Total average liabilities and equity
  
$
       4,207,976
$
       4,263,791
$
       4,356,935
                   
Interest rate yield on loans
    
5.44%
  
5.53%
  
5.66%
Interest rate yield on securities
    
1.92%
  
1.92%
  
2.38%
Interest rate yield on cash
    
0.23%
  
0.23%
  
0.23%
 
Interest rate yield on interest-earning assets
    
4.72%
  
4.74%
  
4.88%
                   
Interest rate expense on deposits
    
0.52%
  
0.59%
  
0.89%
Interest rate expense on borrowings
    
2.33%
  
2.28%
  
2.26%
 
Interest rate expense on interest-bearing liabilities
  
0.66%
  
0.72%
  
1.00%
Interest rate spread
      
4.06%
  
4.02%
  
3.88%
Net interest margin
      
4.11%
  
4.07%
  
3.94%
                   
Other operating income / Average assets
    
1.05%
  
0.67%
  
0.67%
                   
Other operating income EXCLUDING fair value and OTTI
            
 
adjustments / Average assets (1)
    
0.89%
  
0.83%
  
0.65%
                   
Other operating expense / Average assets
    
3.62%
  
3.60%
  
3.55%
                   
Efficiency ratio (other operating expense / revenue)
  
72.77%
  
79.34%
  
80.64%
                   
Return (Loss) on average assets
    
0.88%
  
0.47%
  
(0.73%)
                   
Return (Loss) on average equity
    
6.81%
  
3.79%
  
(6.19%)
                   
Return (Loss) on average tangible equity (2)
    
6.88%
  
3.84%
  
(6.30%)
                   
Average equity  /  Average assets
    
12.90%
  
12.44%
  
11.78%
                   
(1)
 - Earnings information excluding fair value and OTTI adjustments (alternately referred to as other operating income from
 
   core operations or revenues from core operations) represent non-GAAP financial measures.
                   
(2)
 - Average tangible equity excludes core deposit and other intangibles and represents a non-GAAP financial measure.
                   
 
 
 
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