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 22, 2013
|
||
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: April 23, 2013
|
By: /s/Lloyd W. Baker
|
Lloyd W. Baker
|
|
Executive Vice President and
Chief Financial Officer
|
|
Contact: Mark J. Grescovich,
President & CEO
Lloyd W. Baker, CFO
(509) 527-3636
News Release
|
•
|
Net income available to common shareholders was $11.6 million, compared to $7.2 million for the first quarter a year ago.
|
•
|
Return on average assets was 1.11% compared to 0.88% for the first quarter a year ago.
|
•
|
Revenues from core operations* totaled $50.9 million compared to $50.4 million for the first quarter a year ago.
|
•
|
Net interest margin was 4.16%, compared to 4.13% for the preceding quarter and 4.15% for the first quarter a year ago.
|
•
|
Deposit fees and other service charges increased 7%.
|
•
|
Revenues from mortgage banking increased 15%.
|
•
|
Non-performing assets decreased to $44.9 million, or 1.06% of total assets, at March 31, 2013, an 11% decrease compared to three months earlier and a 52% decrease compared to a year earlier.
|
•
|
Non-performing loans decreased to $33.4 million at March 31, 2013, a 3% decrease compared to three months earlier and a 49% decrease compared to a year earlier.
|
•
|
The ratio of tangible common equity to tangible assets increased to 12.10% at March 31, 2013.*
|
•
|
Banner increased its regular quarterly cash dividend to $0.12 per share.
|
RESULTS OF OPERATIONS
|
Quarters Ended
|
|||||||||||
(in thousands except shares and per share data)
|
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
|||||||||
INTEREST INCOME:
|
||||||||||||
Loans receivable
|
$
|
41,489
|
$
|
42,698
|
$
|
44,352
|
||||||
Mortgage-backed securities
|
1,172
|
1,165
|
927
|
|||||||||
Securities and cash equivalents
|
1,847
|
2,019
|
2,283
|
|||||||||
44,508
|
45,882
|
47,562
|
||||||||||
INTEREST EXPENSE:
|
||||||||||||
Deposits
|
2,719
|
3,088
|
4,448
|
|||||||||
Federal Home Loan Bank advances
|
24
|
63
|
63
|
|||||||||
Other borrowings
|
56
|
64
|
549
|
|||||||||
Junior subordinated debentures
|
741
|
776
|
1,012
|
|||||||||
3,540
|
3,991
|
6,072
|
||||||||||
Net interest income before provision for loan losses
|
40,968
|
41,891
|
41,490
|
|||||||||
PROVISION FOR LOAN LOSSES
|
—
|
1,000
|
5,000
|
|||||||||
Net interest income
|
40,968
|
40,891
|
36,490
|
|||||||||
OTHER OPERATING INCOME:
|
||||||||||||
Deposit fees and other service charges
|
6,301
|
6,433
|
5,869
|
|||||||||
Mortgage banking operations
|
2,838
|
3,879
|
2,475
|
|||||||||
Miscellaneous
|
790
|
2,253
|
578
|
|||||||||
9,929
|
12,565
|
8,922
|
||||||||||
Gain on sale of securities
|
1,006
|
3
|
—
|
|||||||||
Other-than-temporary impairment recovery
|
409
|
—
|
—
|
|||||||||
Net change in valuation of financial instruments carried at fair value
|
(1,347
|
)
|
386
|
1,685
|
||||||||
Total other operating income
|
9,997
|
12,954
|
10,607
|
|||||||||
OTHER OPERATING EXPENSE:
|
||||||||||||
Salary and employee benefits
|
20,729
|
20,182
|
19,510
|
|||||||||
Less capitalized loan origination costs
|
(2,871
|
)
|
(2,752
|
)
|
(2,250
|
)
|
||||||
Occupancy and equipment
|
5,329
|
5,320
|
5,477
|
|||||||||
Information / computer data services
|
1,720
|
1,836
|
1,515
|
|||||||||
Payment and card processing services
|
2,305
|
2,263
|
1,890
|
|||||||||
Professional services
|
905
|
850
|
1,344
|
|||||||||
Advertising and marketing
|
1,499
|
1,602
|
2,066
|
|||||||||
Deposit insurance
|
645
|
715
|
1,363
|
|||||||||
State/municipal business and use taxes
|
464
|
574
|
568
|
|||||||||
Real estate operations
|
(251
|
)
|
91
|
2,598
|
||||||||
Amortization of core deposit intangibles
|
505
|
509
|
552
|
|||||||||
Miscellaneous
|
3,120
|
3,329
|
3,280
|
|||||||||
Total other operating expense
|
34,099
|
34,519
|
37,913
|
|||||||||
Income before provision for income taxes
|
16,866
|
19,326
|
9,184
|
|||||||||
PROVISION FOR INCOME TAXES
|
5,284
|
4,638
|
—
|
|||||||||
NET INCOME
|
11,582
|
14,688
|
9,184
|
|||||||||
PREFERRED STOCK DIVIDEND AND ADJUSTMENTS:
|
||||||||||||
Preferred stock dividend
|
—
|
611
|
1,550
|
|||||||||
Preferred stock discount accretion
|
—
|
1,174
|
454
|
|||||||||
Gain on repurchase and retirement of preferred stock
|
—
|
(401
|
)
|
—
|
||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
11,582
|
$
|
13,304
|
$
|
7,180
|
||||||
Earnings per share available to common shareholders:
|
||||||||||||
Basic
|
$
|
0.60
|
$
|
0.69
|
$
|
0.40
|
||||||
Diluted
|
$
|
0.60
|
$
|
0.69
|
$
|
0.40
|
||||||
Cumulative dividends declared per common share
|
$
|
0.12
|
$
|
0.01
|
$
|
0.01
|
||||||
Weighted average common shares outstanding:
|
||||||||||||
Basic
|
19,312,824
|
19,312,761
|
17,761,667
|
|||||||||
Diluted
|
19,423,244
|
19,420,612
|
17,790,402
|
|||||||||
Common shares issued via restricted stock grants, DRIP and stock purchases (net)
|
58
|
86
|
474,296
|
FINANCIAL CONDITION
|
||||||||||||
(in thousands except shares and per share data)
|
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
|||||||||
ASSETS
|
||||||||||||
Cash and due from banks
|
$
|
59,414
|
$
|
66,370
|
$
|
55,723
|
||||||
Federal funds and interest-bearing deposits
|
96,300
|
114,928
|
143,885
|
|||||||||
Securities - at fair value
|
67,761
|
71,232
|
77,706
|
|||||||||
Securities - available for sale
|
476,683
|
472,920
|
386,716
|
|||||||||
Securities - held to maturity
|
88,408
|
86,452
|
76,853
|
|||||||||
Federal Home Loan Bank stock
|
36,373
|
36,705
|
37,371
|
|||||||||
Loans receivable:
|
||||||||||||
Held for sale
|
5,384
|
11,920
|
4,623
|
|||||||||
Held for portfolio
|
3,234,937
|
3,223,794
|
3,225,039
|
|||||||||
Allowance for loan losses
|
(77,128
|
)
|
(77,491
|
)
|
(81,544
|
)
|
||||||
3,163,193
|
3,158,223
|
3,148,118
|
||||||||||
Accrued interest receivable
|
15,235
|
13,930
|
16,047
|
|||||||||
Real estate owned held for sale, net
|
11,160
|
15,778
|
27,723
|
|||||||||
Property and equipment, net
|
88,414
|
89,117
|
90,106
|
|||||||||
Other intangibles, net
|
3,724
|
4,230
|
5,777
|
|||||||||
Bank-owned life insurance
|
60,425
|
59,891
|
59,056
|
|||||||||
Other assets
|
70,536
|
75,788
|
35,683
|
|||||||||
$
|
4,237,626
|
$
|
4,265,564
|
$
|
4,160,764
|
|||||||
LIABILITIES
|
||||||||||||
Deposits:
|
||||||||||||
Non-interest-bearing
|
$
|
962,156
|
$
|
981,240
|
$
|
771,812
|
||||||
Interest-bearing transaction and savings accounts
|
1,575,525
|
1,547,271
|
1,457,030
|
|||||||||
Interest-bearing certificates
|
982,903
|
1,029,293
|
1,197,328
|
|||||||||
3,520,584
|
3,557,804
|
3,426,170
|
||||||||||
Advances from Federal Home Loan Bank at fair value
|
278
|
10,304
|
10,467
|
|||||||||
Customer repurchase agreements and other borrowings
|
88,446
|
76,633
|
91,253
|
|||||||||
Junior subordinated debentures at fair value
|
73,220
|
73,063
|
49,368
|
|||||||||
Accrued expenses and other liabilities
|
24,157
|
26,389
|
21,136
|
|||||||||
Deferred compensation
|
14,879
|
14,452
|
13,580
|
|||||||||
3,721,564
|
3,758,645
|
3,611,974
|
||||||||||
STOCKHOLDERS' EQUITY
|
||||||||||||
Preferred stock - Series A
|
—
|
—
|
121,156
|
|||||||||
Common stock
|
568,116
|
567,907
|
540,068
|
|||||||||
Retained earnings (accumulated deficit)
|
(51,851
|
)
|
(61,102
|
)
|
(112,465
|
)
|
||||||
Other components of stockholders' equity
|
(203
|
)
|
114
|
31
|
||||||||
516,062
|
506,919
|
548,790
|
||||||||||
$
|
4,237,626
|
$
|
4,265,564
|
$
|
4,160,764
|
|||||||
Common Shares Issued:
|
||||||||||||
Shares outstanding at end of period
|
19,462,483
|
19,454,965
|
18,027,768
|
|||||||||
Less unearned ESOP shares at end of period
|
34,340
|
34,340
|
34,340
|
|||||||||
Shares outstanding at end of period excluding unearned ESOP shares
|
19,428,143
|
19,420,625
|
17,993,428
|
|||||||||
Common stockholders' equity per share (1)
|
$
|
26.56
|
$
|
26.10
|
$
|
23.77
|
||||||
Common stockholders' tangible equity per share (1) (2)
|
$
|
26.37
|
$
|
25.88
|
$
|
23.45
|
||||||
Common stockholders' tangible equity to tangible assets (2)
|
12.10
|
%
|
11.80
|
%
|
10.15
|
%
|
||||||
Consolidated Tier 1 leverage capital ratio
|
13.28
|
%
|
12.74
|
%
|
14.00
|
%
|
(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 and other intangibles. Tangible assets excludes other intangible assets. These ratios represent non-GAAP financial measures.
|
(dollars in thousands)
|
||||||||||||
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
||||||||||
LOANS (including loans held for sale):
|
||||||||||||
Commercial real estate:
|
||||||||||||
Owner occupied
|
$
|
497,442
|
$
|
489,581
|
$
|
468,318
|
||||||
Investment properties
|
602,761
|
583,641
|
612,617
|
|||||||||
Multifamily real estate
|
134,290
|
137,504
|
132,306
|
|||||||||
Commercial construction
|
34,762
|
30,229
|
40,276
|
|||||||||
Multifamily construction
|
34,147
|
22,581
|
20,654
|
|||||||||
One- to four-family construction
|
171,876
|
160,815
|
148,717
|
|||||||||
Land and land development:
|
||||||||||||
Residential
|
78,446
|
77,010
|
89,329
|
|||||||||
Commercial
|
12,477
|
13,982
|
12,044
|
|||||||||
Commercial business
|
619,478
|
618,049
|
609,497
|
|||||||||
Agricultural business including secured by farmland
|
210,225
|
230,031
|
188,955
|
|||||||||
One- to four-family real estate
|
566,730
|
581,670
|
619,511
|
|||||||||
Consumer:
|
||||||||||||
Consumer secured by one- to four-family real estate
|
165,305
|
170,123
|
180,460
|
|||||||||
Consumer-other
|
112,382
|
120,498
|
106,978
|
|||||||||
Total loans outstanding
|
$
|
3,240,321
|
$
|
3,235,714
|
$
|
3,229,662
|
||||||
Restructured loans performing under their restructured terms
|
$
|
54,611
|
$
|
57,460
|
$
|
53,391
|
||||||
Loans 30 - 89 days past due and on accrual
|
$
|
6,984
|
$
|
11,685
|
$
|
14,336
|
||||||
Total delinquent loans (including loans on non-accrual)
|
$
|
40,390
|
$
|
45,300
|
$
|
79,249
|
||||||
Total delinquent loans / Total loans outstanding
|
1.25
|
%
|
1.40
|
%
|
2.45
|
%
|
GEOGRAPHIC CONCENTRATION OF LOANS AT
|
||||||||||||||||||||
March 31, 2013
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||||||
Commercial real estate:
|
||||||||||||||||||||
Owner occupied
|
$
|
376,330
|
$
|
58,671
|
$
|
57,363
|
$
|
5,078
|
$
|
497,442
|
||||||||||
Investment properties
|
467,720
|
87,184
|
43,750
|
4,107
|
602,761
|
|||||||||||||||
Multifamily real estate
|
112,625
|
13,208
|
8,196
|
261
|
134,290
|
|||||||||||||||
Commercial construction
|
23,636
|
6,566
|
1,207
|
3,353
|
34,762
|
|||||||||||||||
Multifamily construction
|
15,566
|
18,581
|
—
|
—
|
34,147
|
|||||||||||||||
One- to four-family construction
|
97,016
|
72,729
|
2,131
|
—
|
171,876
|
|||||||||||||||
Land and land development:
|
||||||||||||||||||||
Residential
|
47,106
|
29,614
|
1,726
|
—
|
78,446
|
|||||||||||||||
Commercial
|
7,482
|
3,043
|
1,952
|
—
|
12,477
|
|||||||||||||||
Commercial business
|
393,638
|
83,574
|
55,047
|
87,219
|
619,478
|
|||||||||||||||
Agricultural business including secured by farmland
|
105,886
|
38,934
|
65,405
|
—
|
210,225
|
|||||||||||||||
One- to four-family real estate
|
352,209
|
188,804
|
23,660
|
2,057
|
566,730
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
Consumer secured by one- to four-family real estate
|
111,010
|
41,897
|
11,721
|
677
|
165,305
|
|||||||||||||||
Consumer-other
|
76,807
|
30,233
|
5,337
|
5
|
112,382
|
|||||||||||||||
Total loans outstanding
|
$
|
2,187,031
|
$
|
673,038
|
$
|
277,495
|
$
|
102,757
|
$
|
3,240,321
|
||||||||||
Percent of total loans
|
67.5
|
%
|
20.8
|
%
|
8.5
|
%
|
3.2
|
%
|
100.0
|
%
|
DETAIL OF LAND AND LAND DEVELOPMENT LOANS AT
|
|||||||||||||||||||
March 31, 2013
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
||||||||||||||
Residential:
|
|||||||||||||||||||
Acquisition & development
|
$
|
8,982
|
$
|
12,071
|
$
|
1,523
|
—
|
$
|
22,576
|
||||||||||
Improved lots
|
29,463
|
17,093
|
203
|
—
|
46,759
|
||||||||||||||
Unimproved land
|
8,661
|
450
|
—
|
—
|
9,111
|
||||||||||||||
Total residential land and development
|
$
|
47,106
|
$
|
29,614
|
$
|
1,726
|
—
|
$
|
78,446
|
||||||||||
Commercial & industrial:
|
|||||||||||||||||||
Acquisition & development
|
$
|
—
|
—
|
$
|
482
|
—
|
$
|
482
|
|||||||||||
Improved land
|
4,143
|
136
|
541
|
—
|
4,820
|
||||||||||||||
Unimproved land
|
3,339
|
2,907
|
929
|
—
|
7,175
|
||||||||||||||
Total commercial land and development
|
$
|
7,482
|
$
|
3,043
|
$
|
1,952
|
—
|
$
|
12,477
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||
(dollars in thousands)
|
||||||||||||
Quarters Ended
|
||||||||||||
CHANGE IN THE
|
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
|||||||||
ALLOWANCE FOR LOAN LOSSES
|
||||||||||||
Balance, beginning of period
|
$
|
77,491
|
$
|
78,783
|
$
|
82,912
|
||||||
Provision
|
—
|
1,000
|
5,000
|
|||||||||
Recoveries of loans previously charged off:
|
||||||||||||
Commercial real estate
|
1,586
|
159
|
614
|
|||||||||
Multifamily real estate
|
—
|
—
|
—
|
|||||||||
Construction and land
|
101
|
1,499
|
370
|
|||||||||
One- to four-family real estate
|
116
|
174
|
5
|
|||||||||
Commercial business
|
386
|
1,395
|
236
|
|||||||||
Agricultural business, including secured by farmland
|
37
|
4
|
—
|
|||||||||
Consumer
|
102
|
108
|
136
|
|||||||||
2,328
|
3,339
|
1,361
|
||||||||||
Loans charged off:
|
||||||||||||
Commercial real estate
|
(348
|
)
|
(558
|
)
|
(1,323
|
)
|
||||||
Multifamily real estate
|
—
|
—
|
—
|
|||||||||
Construction and land
|
(435
|
)
|
(1,301
|
)
|
(2,924
|
)
|
||||||
One- to four-family real estate
|
(651
|
)
|
(1,748
|
)
|
(966
|
)
|
||||||
Commercial business
|
(929
|
)
|
(1,094
|
)
|
(1,407
|
)
|
||||||
Agricultural business, including secured by farmland
|
—
|
(155
|
)
|
(275
|
)
|
|||||||
Consumer
|
(328
|
)
|
(775
|
)
|
(834
|
)
|
||||||
(2,691
|
)
|
(5,631
|
)
|
(7,729
|
)
|
|||||||
Net charge-offs
|
(363
|
)
|
(2,292
|
)
|
(6,368
|
)
|
||||||
Balance, end of period
|
$
|
77,128
|
$
|
77,491
|
$
|
81,544
|
||||||
Net charge-offs / Average loans outstanding
|
0.01
|
%
|
0.07
|
%
|
0.20
|
%
|
ALLOCATION OF
|
||||||||||||
ALLOWANCE FOR LOAN LOSSES
|
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
|||||||||
Specific or allocated loss allowance:
|
||||||||||||
Commercial real estate
|
$
|
14,776
|
$
|
15,322
|
$
|
17,083
|
||||||
Multifamily real estate
|
5,075
|
4,506
|
3,261
|
|||||||||
Construction and land
|
15,214
|
14,991
|
15,871
|
|||||||||
One- to four-family real estate
|
15,930
|
16,475
|
13,123
|
|||||||||
Commercial business
|
10,011
|
9,957
|
1,887
|
|||||||||
Agricultural business, including secured by farmland
|
2,282
|
2,295
|
12,869
|
|||||||||
Consumer
|
1,238
|
1,348
|
1,274
|
|||||||||
Total allocated
|
64,526
|
64,894
|
65,368
|
|||||||||
Estimated allowance for undisbursed commitments
|
631
|
758
|
651
|
|||||||||
Unallocated
|
11,971
|
11,839
|
15,525
|
|||||||||
Total allowance for loan losses
|
$
|
77,128
|
$
|
77,491
|
$
|
81,544
|
||||||
Allowance for loan losses / Total loans outstanding
|
2.38
|
%
|
2.39
|
%
|
2.52
|
%
|
||||||
Allowance for loan losses / Non-performing loans
|
231
|
%
|
225
|
%
|
126
|
%
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||||
(dollars in thousands)
|
|||||||||||
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
|||||||||
NON-PERFORMING ASSETS
|
|||||||||||
Loans on non-accrual status:
|
|||||||||||
Secured by real estate:
|
|||||||||||
Commercial
|
$
|
6,726
|
$
|
6,579
|
$
|
10,541
|
|||||
Multifamily
|
339
|
—
|
—
|
||||||||
Construction and land
|
3,729
|
3,673
|
18,601
|
||||||||
One- to four-family
|
12,875
|
12,964
|
19,384
|
||||||||
Commercial business
|
4,370
|
4,750
|
10,121
|
||||||||
Agricultural business, including secured by farmland
|
—
|
—
|
1,481
|
||||||||
Consumer
|
3,078
|
3,395
|
2,572
|
||||||||
31,117
|
31,361
|
62,700
|
|||||||||
Loans more than 90 days delinquent, still on accrual:
|
|||||||||||
Secured by real estate:
|
|||||||||||
Commercial
|
—
|
—
|
—
|
||||||||
Multifamily
|
—
|
—
|
—
|
||||||||
Construction and land
|
—
|
—
|
—
|
||||||||
One- to four-family
|
2,243
|
2,877
|
2,129
|
||||||||
Commercial business
|
—
|
—
|
—
|
||||||||
Agricultural business, including secured by farmland
|
—
|
—
|
—
|
||||||||
Consumer
|
46
|
152
|
84
|
||||||||
2,289
|
3,029
|
2,213
|
|||||||||
Total non-performing loans
|
33,406
|
34,390
|
64,913
|
||||||||
Securities on non-accrual
|
—
|
—
|
500
|
||||||||
Real estate owned (REO) and repossessed assets
|
11,458
|
15,853
|
27,731
|
||||||||
Total non-performing assets
|
$
|
44,864
|
$
|
50,243
|
$
|
93,144
|
|||||
Total non-performing assets / Total assets
|
1.06
|
%
|
1.18
|
%
|
2.24
|
%
|
DETAIL & GEOGRAPHIC CONCENTRATION OF
|
|||||||||||||||
NON-PERFORMING ASSETS AT
|
|||||||||||||||
March 31, 2013
|
Washington
|
Oregon
|
Idaho
|
Total
|
|||||||||||
Secured by real estate:
|
|||||||||||||||
Commercial
|
$
|
5,965
|
—
|
$
|
761
|
$
|
6,726
|
||||||||
Multifamily
|
—
|
—
|
339
|
339
|
|||||||||||
Construction and land:
|
|||||||||||||||
One- to four-family construction
|
1,522
|
—
|
430
|
1,952
|
|||||||||||
Residential land acquisition & development
|
—
|
1,386
|
—
|
1,386
|
|||||||||||
Residential land improved lots
|
—
|
31
|
—
|
31
|
|||||||||||
Residential land unimproved
|
—
|
—
|
—
|
—
|
|||||||||||
Commercial land improved
|
119
|
—
|
—
|
119
|
|||||||||||
Commercial land unimproved
|
241
|
—
|
—
|
241
|
|||||||||||
Total construction and land
|
1,882
|
1,417
|
430
|
3,729
|
|||||||||||
One- to four-family
|
10,813
|
2,286
|
2,019
|
15,118
|
|||||||||||
Commercial business
|
4,299
|
71
|
—
|
4,370
|
|||||||||||
Agricultural business, including secured by farmland
|
—
|
—
|
—
|
—
|
|||||||||||
Consumer
|
2,227
|
429
|
468
|
3,124
|
|||||||||||
Total non-performing loans
|
25,186
|
4,203
|
4,017
|
33,406
|
|||||||||||
Real estate owned (REO) and repossessed assets
|
3,378
|
7,812
|
268
|
11,458
|
|||||||||||
Total non-performing assets at end of the period
|
$
|
28,564
|
$
|
12,015
|
$
|
4,285
|
$
|
44,864
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||
(dollars in thousands)
|
|||||||
Quarters Ended
|
|||||||
REAL ESTATE OWNED
|
Mar 31, 2013
|
Mar 31, 2012
|
|||||
Balance, beginning of period
|
$
|
15,778
|
$
|
42,965
|
|||
Additions from loan foreclosures
|
1,086
|
1,601
|
|||||
Additions from capitalized costs
|
46
|
127
|
|||||
Proceeds from dispositions of REO
|
(6,481
|
)
|
(15,441
|
)
|
|||
Gain on sale of REO
|
804
|
100
|
|||||
Valuation adjustments in the period
|
(73
|
)
|
(1,629
|
)
|
|||
Balance, end of period
|
$
|
11,160
|
$
|
27,723
|
Quarters Ended
|
|||||||||||||||||||
REAL ESTATE OWNED- FIVE COMPARATIVE QUARTERS
|
Mar 31, 2013
|
Dec 31, 2012
|
Sep 30, 2012
|
Jun 30, 2012
|
Mar 31, 2012
|
||||||||||||||
Balance, beginning of period
|
$
|
15,778
|
$
|
20,356
|
$
|
25,816
|
$
|
27,723
|
$
|
42,965
|
|||||||||
Additions from loan foreclosures
|
1,086
|
2,332
|
3,111
|
6,886
|
1,601
|
||||||||||||||
Additions from capitalized costs
|
46
|
17
|
97
|
7
|
127
|
||||||||||||||
Proceeds from dispositions of REO
|
(6,481
|
)
|
(7,306
|
)
|
(10,368
|
)
|
(7,799
|
)
|
(15,441
|
)
|
|||||||||
Gain on sale of REO
|
804
|
1,105
|
2,955
|
566
|
100
|
||||||||||||||
Valuation adjustments in the period
|
(73
|
)
|
(726
|
)
|
(1,255
|
)
|
(1,567
|
)
|
(1,629
|
)
|
|||||||||
Balance, end of period
|
$
|
11,160
|
$
|
15,778
|
$
|
20,356
|
$
|
25,816
|
$
|
27,723
|
REAL ESTATE OWNED- BY TYPE AND STATE
|
|||||||||||||||
March 31, 2013
|
Washington
|
Oregon
|
Idaho
|
Total
|
|||||||||||
Commercial real estate
|
$
|
—
|
—
|
$
|
198
|
$
|
198
|
||||||||
One- to four-family construction
|
401
|
—
|
—
|
401
|
|||||||||||
Land development- commercial
|
—
|
—
|
—
|
—
|
|||||||||||
Land development- residential
|
1,610
|
6,321
|
70
|
8,001
|
|||||||||||
Agricultural land
|
—
|
—
|
—
|
—
|
|||||||||||
One- to four-family real estate
|
1,077
|
1,483
|
—
|
2,560
|
|||||||||||
Total
|
$
|
3,088
|
$
|
7,804
|
$
|
268
|
$
|
11,160
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||
(dollars in thousands)
|
||||||||||||
DEPOSITS & OTHER BORROWINGS
|
||||||||||||
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
||||||||||
DEPOSIT COMPOSITION
|
||||||||||||
Non-interest-bearing
|
$
|
962,156
|
$
|
981,240
|
$
|
771,812
|
||||||
Interest-bearing checking
|
400,598
|
410,316
|
368,810
|
|||||||||
Regular savings accounts
|
759,866
|
727,957
|
673,704
|
|||||||||
Money market accounts
|
415,061
|
408,998
|
414,516
|
|||||||||
Interest-bearing transaction & savings accounts
|
1,575,525
|
1,547,271
|
1,457,030
|
|||||||||
Interest-bearing certificates
|
982,903
|
1,029,293
|
1,197,328
|
|||||||||
Total deposits
|
$
|
3,520,584
|
$
|
3,557,804
|
$
|
3,426,170
|
||||||
INCLUDED IN TOTAL DEPOSITS
|
||||||||||||
Public transaction accounts
|
$
|
73,273
|
$
|
79,955
|
$
|
68,590
|
||||||
Public interest-bearing certificates
|
53,552
|
60,518
|
69,856
|
|||||||||
Total public deposits
|
$
|
126,825
|
$
|
140,473
|
$
|
138,446
|
||||||
Total brokered deposits
|
$
|
15,709
|
$
|
15,702
|
$
|
30,978
|
||||||
OTHER BORROWINGS
|
||||||||||||
Customer repurchase agreements / "Sweep accounts"
|
$
|
88,446
|
$
|
76,633
|
$
|
91,253
|
GEOGRAPHIC CONCENTRATION OF DEPOSITS AT
|
||||||||||||||||
March 31, 2013
|
Washington
|
Oregon
|
Idaho
|
Total
|
||||||||||||
$
|
2,665,776
|
$
|
618,161
|
$
|
236,647
|
$
|
3,520,584
|
Minimum for Capital Adequacy
|
||||||||||||||
REGULATORY CAPITAL RATIOS AT
|
Actual
|
or "Well Capitalized"
|
||||||||||||
March 31, 2013
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||
Banner Corporation-consolidated:
|
||||||||||||||
Total capital to risk-weighted assets
|
$
|
600,052
|
17.06
|
%
|
$
|
281,339
|
8.00
|
%
|
||||||
Tier 1 capital to risk-weighted assets
|
555,684
|
15.80
|
%
|
140,670
|
4.00
|
%
|
||||||||
Tier 1 leverage capital to average assets
|
555,684
|
13.28
|
%
|
167,373
|
4.00
|
%
|
||||||||
Banner Bank:
|
||||||||||||||
Total capital to risk-weighted assets
|
540,659
|
16.19
|
%
|
334,048
|
10.00
|
%
|
||||||||
Tier 1 capital to risk-weighted assets
|
498,503
|
14.92
|
%
|
200,429
|
6.00
|
%
|
||||||||
Tier 1 leverage capital to average assets
|
498,503
|
12.57
|
%
|
198,241
|
5.00
|
%
|
||||||||
Islanders Bank:
|
||||||||||||||
Total capital to risk-weighted assets
|
33,369
|
18.20
|
%
|
18,335
|
10.00
|
%
|
||||||||
Tier 1 capital to risk-weighted assets
|
31,068
|
16.94
|
%
|
11,001
|
6.00
|
%
|
||||||||
Tier 1 leverage capital to average assets
|
31,068
|
13.53
|
%
|
11,481
|
5.00
|
%
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||
(dollars in thousands)
|
||||||||||||
(rates / ratios annualized)
|
||||||||||||
Quarters Ended
|
||||||||||||
OPERATING PERFORMANCE
|
Mar 31, 2013
|
Dec 31, 2012
|
Mar 31, 2012
|
|||||||||
Average loans
|
$
|
3,215,228
|
$
|
3,201,389
|
$
|
3,250,767
|
||||||
Average securities
|
673,298
|
660,731
|
660,638
|
|||||||||
Average interest earning cash
|
107,950
|
175,441
|
111,536
|
|||||||||
Average non-interest-earning assets
|
219,211
|
227,728
|
185,035
|
|||||||||
Total average assets
|
$
|
4,215,687
|
$
|
4,265,289
|
$
|
4,207,976
|
||||||
Average deposits
|
$
|
3,501,972
|
$
|
3,507,202
|
$
|
3,421,448
|
||||||
Average borrowings
|
210,462
|
214,275
|
280,439
|
|||||||||
Average non-interest-bearing other liabilities (1)
|
(11,558
|
)
|
(2,208
|
)
|
(36,699
|
)
|
||||||
Total average liabilities
|
3,700,876
|
3,719,269
|
3,665,188
|
|||||||||
Total average stockholders' equity
|
514,811
|
546,020
|
542,788
|
|||||||||
Total average liabilities and equity
|
$
|
4,215,687
|
$
|
4,265,289
|
$
|
4,207,976
|
||||||
Interest rate yield on loans
|
5.23
|
%
|
5.31
|
%
|
5.49
|
%
|
||||||
Interest rate yield on securities
|
1.78
|
%
|
1.85
|
%
|
1.92
|
%
|
||||||
Interest rate yield on cash
|
0.25
|
%
|
0.26
|
%
|
0.23
|
%
|
||||||
Interest rate yield on interest-earning assets
|
4.52
|
%
|
4.52
|
%
|
4.76
|
%
|
||||||
Interest rate expense on deposits
|
0.31
|
%
|
0.35
|
%
|
0.52
|
%
|
||||||
Interest rate expense on borrowings
|
1.58
|
%
|
1.68
|
%
|
2.33
|
%
|
||||||
Interest rate expense on interest-bearing liabilities
|
0.39
|
%
|
0.43
|
%
|
0.66
|
%
|
||||||
Interest rate spread
|
4.13
|
%
|
4.09
|
%
|
4.10
|
%
|
||||||
Net interest margin
|
4.16
|
%
|
4.13
|
%
|
4.15
|
%
|
||||||
Other operating income / Average assets
|
0.96
|
%
|
1.21
|
%
|
1.01
|
%
|
||||||
Other operating income EXCLUDING fair value
|
||||||||||||
adjustments / Average assets (2)
|
1.05
|
%
|
1.17
|
%
|
0.85
|
%
|
||||||
Other operating expense / Average assets
|
3.28
|
%
|
3.22
|
%
|
3.62
|
%
|
||||||
Efficiency ratio (other operating expense / revenue)
|
66.91
|
%
|
62.94
|
%
|
72.77
|
%
|
||||||
Efficiency ratio EXCLUDING fair value adjustments(2)
|
65.70
|
%
|
63.39
|
%
|
75.21
|
%
|
||||||
Return on average assets
|
1.11
|
%
|
1.37
|
%
|
0.88
|
%
|
||||||
Return on average equity
|
9.12
|
%
|
10.70
|
%
|
6.81
|
%
|
||||||
Return on average tangible equity (3)
|
9.20
|
%
|
10.79
|
%
|
6.88
|
%
|
||||||
Average equity / Average assets
|
12.21
|
%
|
12.80
|
%
|
12.90
|
%
|
(1)
|
Average non-interest-bearing liabilities include fair value adjustments related to FHLB advances and Junior Subordinated Debentures.
|
(2)
|
Earnings information excluding fair value adjustments (alternately referred to as other operating income from core operations or revenues from core operations) represent non-GAAP financial measures.
|
(3)
|
Average tangible equity excludes other intangibles and represents a non-GAAP financial measure.
|