Exhibit 99.1
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CONTACT:
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MARK J. GRESCOVICH,
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PRESIDENT & CEO
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PETER J. CONNER, CFO
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(509) 527-3636
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NEWS RELEASE
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Banner Corporation Reports First Quarter Earnings of $16.9 million
Initiates Pandemic Relief and Community Support Actions
Walla Walla, WA - April 27, 2020 - Banner Corporation (NASDAQ GSM: BANR) ("Banner"), the parent company of Banner Bank and Islanders Bank, today reported net income of $16.9
million, or $0.47 per diluted share, for the first quarter 2020, compared to $33.7 million, or $0.95 per diluted share, in the preceding quarter and $33.3 million, or $0.95 per diluted share, in the first quarter of 2019. Banner's first quarter
earnings reflect the impact of the COVID-19 pandemic resulting in a substantial reduction in business activity or the closing of businesses in all the western states Banner operates.
First quarter of 2020 results also include $1.1 million of acquisition-related expenses, compared to $4.4 million of acquisition-related expenses in the preceding quarter and
$2.1 million in the first quarter of 2019.
“We are in unprecedented times - as a health crisis has quickly evolved to also become an economic crisis, creating far-reaching impacts to clients and the communities we
serve,” said Mark Grescovich, President and CEO. “In mid-March we began preparations for the COVID-19 pandemic by closing branch lobbies, mobilizing personnel to work from home and providing appropriate IT equipment and services to accommodate
Stay-At-Home Orders. Our lending teams have reached out to borrowers that have been affected by the economic decline and offered assistance in various forms including deferred payments and interest-only payments. We have worked with our customers
to file applications for the Paycheck Protection Program offered through the Small Business Administration and expect this program to provide some near-term relief to help small businesses sustain operations. Meanwhile, we are monitoring the
economy closely and reviewing loan payment deferrals and interest waivers daily and have elevated our liquidity levels in anticipation of cash needs of our customers.”
Grescovich concluded, “In anticipation of future credit losses, we determined it is prudent to increase the allowance for credit losses through the addition of $21.7 million
in credit loss provisions for the quarter ended March 31, 2020.” This provision compares to a $4.0 million provision for loan losses during the previous quarter and a $2.0 million provision for loan losses in the first quarter a year ago. The
allowance for credit losses - loans was 1.41% of total loans and 299% of non-performing loans at the end of the first quarter of 2020. The increased allowance includes provisions taken in anticipation of changes in risks associated with loan
classification assignments and a deteriorating economy.
At March 31, 2020, Banner Corporation had $12.78 billion in assets, $9.16 billion in net loans and $10.45 billion in deposits. Banner operates 176 branch offices, including
branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population.
COVID-19 Pandemic Response
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SBA Paycheck Protection Program. The U.S. Small Business Administration (SBA) is providing assistance to small businesses impacted by COVID-19
through the Paycheck Protection Program (PPP), which is designed to provide near-term relief to help small businesses sustain operations. Banner is offering small businesses loans to clients in its service area through this program. As
of April 16, 2020, the funds allocated to the PPP from the CARES Act had been fully allocated. Congress recently approved a second round of funding for the PPP. Banner will continue to process applications received under the PPP until
the available funds have been fully allocated. Banner is also planning to assist small businesses with accessing other borrowing options as they become available, including the Main Street Lending Program and other government sponsored
lending programs, as appropriate.
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Loan Accommodations. Banner is offering payment and financial relief programs for borrowers impacted by COVID-19. These programs include loan
payment deferrals for up to 90 days, waived late fees, and, on a more limited basis, waived interest or allowed interest-only loan payments and we have temporarily suspended foreclosure proceedings. Since these loans were performing
loans that were current on their payments prior to COVID-19, these modifications are not considered to be troubled debt restructurings.
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Allowance for Credit Losses - Loans. Banner recorded a provision for credit losses of $21.7 million for the first quarter of 2020, compared to
a $4.0 million provision in the preceding quarter and a $2.0 million provision in the first quarter a year ago. The provision for the current quarter reflects expected lifetime credit losses based upon the conditions and economic outlook
that existed as of March 31, 2020. The probability of further decline in economic conditions, including higher unemployment rates and lower gross domestic product, has increased since quarter end and should it materialize, an additional
provision for expected credit losses will be necessary.
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Branch Operations, IT Changes and One-Time Expenses. We have taken various steps to help protect customers and staff by limiting branch
activities to appointment only and use of our drive-up facilities, and by encouraging the use of our digital and electronic banking channels, all the while adjusting for evolving State and Federal guidelines. To further the well-being of
staff and customers, Banner implemented measures to allow employees to work from home to the extent practicable. To facilitate this approach, Banner allocated additional computer equipment to staff and
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BANR - First Quarter 2020 Results
April 27, 2020
Page 2
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enhanced the Company's network capabilities with several upgrades. These expenses plus other expenses incurred in response to the COVID-19 pandemic resulted in $239,000 of related
costs during the first quarter of 2020.
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Capital Management. At March 31, 2020, the tangible common shareholders' equity to tangible assets ratio was 9.70% and Banner’s capital was
well in excess of all regulatory requirements. During the current quarter, prior to the COVID-19 pandemic outbreak, Banner repurchased 624,780 shares of its common stock. To preserve capital, Banner has discontinued any additional
repurchase of shares until further notice and will closely monitor capital levels going forward.
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First Quarter 2020 Highlights
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Revenues were $138.4 million, compared to $139.8 million in the preceding quarter, and increased 3% when compared to $134.2 million in the first quarter a year ago.
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Net interest income, before the provision for loan losses, was $119.3 million in the first quarter of 2020, compared to $119.5 million in the preceding quarter and $116.1 million in
the first quarter a year ago.
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Net interest margin was 4.19%, compared to 4.20% in the preceding quarter and 4.37% in the first quarter a year ago.
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Mortgage banking revenues increased 63% to $10.2 million, compared to $6.2 million in the preceding quarter, and increased 198% compared to $3.4 million in the first quarter a year
ago, reflecting strong refinance demand due to decreasing market interest rates.
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Return on average assets was 0.54%, compared to 1.07% in the preceding quarter and 1.15% in the first quarter a year ago.
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Net loans receivable decreased modestly to $9.16 billion at March 31, 2020, compared to $9.20 billion at December 31, 2019, and increased 7% when compared to $8.60 billion at March 31,
2019.
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Non-performing assets increased to $46.1 million, or 0.36% of total assets, at March 31, 2020, compared to $40.5 million, or 0.32% of total assets in the preceding quarter, and $22.0
million, or 0.19% of total assets, at March 31, 2019.
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Provision for credit losses - loans was $21.7 million, and the allowance for credit losses - loans was $130.5 million, or 1.41% of total loans receivable, as of March 31, 2020,
compared to $100.6 million, or 1.08% of total loans receivable as of December 31, 2019.
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Provision for credit losses - unfunded loan commitments was $1.7 million, and the allowance for credit losses - unfunded loan commitments was $11.5 million as of March 31, 2020,
compared to $2.7 million as of December 31, 2019.
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Core deposits increased 4% to $9.28 billion at March 31, 2020, compared to $8.93 billion at December 31, 2019, and increased 13% compared to $8.21 billion a year ago. Core deposits
represented 89% of total deposits at March 31, 2020.
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Dividends to shareholders were $0.41 per share in the quarter ended March 31, 2020.
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Common shareholders’ equity per share increased 2% to $45.63 at March 31, 2020, compared to $44.59 at the preceding quarter end, and increased 6% from $42.99 a year ago.
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Tangible common shareholders' equity per share* increased 3% to $34.23 at March 31, 2020, compared to $33.33 at the preceding quarter end, and increased 5% from $32.47 a year ago.
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*Tangible common shareholders' equity per share and the ratio of tangible common equity to tangible assets (both of which exclude goodwill and other
intangible assets, net), and references to adjusted revenue (which excludes fair value adjustments and net gain (loss) on the sale of securities from the total of net interest income before provision for loan losses and non-interest income) and the
adjusted efficiency ratio (which excludes acquisition-related expenses, COVID-19 expenses, amortization of core deposit intangibles, real estate owned gain (loss), Federal Home Loan Bank (FHLB) prepayment penalties and state/municipal taxes from
non-interest expense divided by adjusted revenue) 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 Banner's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. Where applicable, comparable
earnings information using GAAP financial measures is also presented. See also Non-GAAP Financial Measures reconciliation tables on the last two pages of this press release.
Significant Recent Initiatives and Events
On November 1, 2019, Banner completed the acquisition of AltaPacific Bancorp (“AltaPacific”) and its wholly-owned subsidiary, AltaPacific Bank, of Santa Rosa, California. At
closing AltaPacific Bank had six branch locations, including one in Northern California and five in Southern California. Pursuant to the previously announced terms, AltaPacific shareholders received 0.2712 shares of Banner common stock in exchange
for each share of AltaPacific common stock, plus cash in lieu of any fractional shares and cash to buyout AltaPacific stock options for a total consideration paid of $87.6 million.
The AltaPacific merger was accounted for using the acquisition method of accounting. Accordingly, the assets (including identifiable intangible assets) and the liabilities
of AltaPacific were measured at their respective estimated fair values as of the merger date. The excess of the purchase price over the fair value of the net assets acquired was attributed to goodwill. The fair value on the merger date represents
management's best estimates based on available information and facts and circumstances in existence on the merger date. The acquisition accounting is subject to adjustment within a measurement period of one year from the acquisition date. The
acquisition provided $425.7 million of assets, $332.4 million of loans, and $313.4 million of deposits to Banner. During the first quarter of 2020, Banner completed the integration of AltaPacific systems into Banner's core systems and closure of
overlapping branches.
Adoption of New Accounting Standard
In June 2016, Financial Accounting Standards Board issued Accounting Standard Update No. 2016-13, Measurement of Credit Losses on Financial Instruments (ASU 2016-13). GAAP
prior to ASU 2016-13 required an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The main objective of ASU 2016-13 is to provide financial statement users with more
decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU 2016-13 became effective for Banner on January 1, 2020. The
adoption of ASU No. 2016-13 resulted in a $7.8 million increase to its allowance
BANR - First Quarter 2020 Results
April 27, 2020
Page 3
for credit losses - loans and a $7.0 million increase to its allowance for credit losses - unfunded loan commitments. The combined increases were recorded net of tax as an
$11.2 million reduction to retained earnings as of the adoption date.
Income Statement Review
Net interest income, before the provision for credit losses, was $119.3 million in the first quarter of 2020, compared to $119.5 million in the preceding quarter and $116.1
million in the first quarter a year ago.
Banner's net interest margin was 4.19% for the first quarter of 2020, a one basis-point decrease compared to 4.20% in the preceding quarter and an 18 basis-point decrease compared to 4.37% in the first quarter a year ago. Grescovich added, "The net interest margin remained
steady during the quarter as improved securities yields combined with a decline in funding cost helped offset the decline in loan yields. The 150 basis-point decrease in the fed funds target rate did not occur until late in the quarter in March
2020, and the full effect of the lower interest rate environment had not yet been realized at quarter end. Banner expects to see further margin compression during the second quarter." Acquisition accounting adjustments added ten basis points to
the net interest margin in the current quarter compared to eight basis points in the preceding quarter and seven basis points in the first quarter a year ago. The total purchase discount for acquired loans was $22.2 million at March 31, 2020,
compared to $25.0 million at December 31, 2019, and $24.2 million at March 31, 2019.
Average interest-earning asset yields decreased six basis points to 4.63% in the first quarter compared to 4.69% for the preceding quarter and decreased 26 basis points
compared to 4.89% in the first quarter a year ago. Average loan yields decreased ten basis points to 5.03% compared to 5.13% in the preceding quarter and decreased 28 basis points compared to 5.31% in the first quarter a year ago. Loan discount
accretion added 12 basis points to loan yields in the first quarter of 2020, compared to 11 basis points in the preceding quarter and nine basis points in the first quarter a year ago. Deposit costs were 0.35% in the first quarter of 2020, a five
basis-point decrease compared to the preceding quarter and a two basis-point decrease compared to the first quarter a year ago. The decrease in deposit costs during the current quarter compared to the preceding quarter are the result of recent
decreases in market interest rates; however, changes in the average rate paid on interest-bearing deposits tend to lag changes in market interest rates. The total cost of funds was 0.46% during the first quarter of 2020, a six basis-point decrease
compared to the preceding quarter and a ten basis-point decrease compared to the first quarter a year ago.
Banner recorded a $21.7 million provision for credit losses in the current quarter, compared to $4.0 million in the prior quarter and $2.0 million in the same quarter a year
ago as calculated under the prior incurred loss methodology. The provision for the current quarter reflects expected lifetime credit losses based upon the conditions that existed as of March 31, 2020 and the potential effects from forecasted
deterioration of economic metrics due to the COVID-19 pandemic based on the outlook as of March 31, 2020.
Total non-interest income was $19.2 million in the first quarter of 2020, compared to $20.3 million in the fourth quarter of 2019 and $18.1 million in the first quarter a
year ago. Deposit fees and other service charges were $9.8 million in the first quarter of 2020, compared to $9.6 million in the preceding quarter and $12.6 million in the first quarter a year ago. The decrease in deposit fees and other service
charges from the first quarter a year ago is primarily a result of Banner becoming subject to the Durbin Amendment on July 1, 2019, which reduced interchange fee income by approximately $7 million during the second half of 2019. Mortgage banking
revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, increased to $10.2 million in the first quarter, compared to $6.2 million in the preceding quarter and $3.4 million in the first quarter of 2019.
The higher mortgage banking revenue quarter-over-quarter primarily reflects an increase in the gain on sale spread on one- to four-family held for sale loans. The increases compared to the first quarter of 2019 were primarily due to increased
production of one- to four-family held-for-sale loans primarily due to increased refinance activity. Home purchase activity accounted for 54% of one- to four-family mortgage loan originations in the first quarter of 2020, compared to 56% in the
prior quarter and 80% in the first quarter of 2019.
Banner’s first quarter 2020 results included a $4.6 million net loss for fair value adjustments as a result of changes in the valuation of financial instruments carried at
fair value, principally comprised of certain investment securities held for trading as a result of widening market spreads during the quarter, and a $78,000 net gain on the sale of securities. In the preceding quarter, results included a $36,000
net loss for fair value adjustments and a $62,000 net gain on the sale of securities. In the first quarter a year ago, results included an $11,000 net gain for fair value adjustments and a $1,000 net gain on the sale of securities.
Total revenue decreased nominally to $138.4 million for the first quarter of 2020, compared to $139.8 million in the preceding quarter, and increased 3% compared to $134.2
million in the first quarter a year ago. Adjusted revenue* (the total of net interest income before provision for credit losses and total non-interest income excluding the net gain and loss on the sale of securities and the net change in valuation
of financial instruments) was $142.9 million in the first quarter of 2020, compared to $139.7 million in the preceding quarter and $134.2 million in the first quarter of 2019.
Banner’s total non-interest expense was $95.2 million in the first quarter of 2020, compared to $93.7 million in the preceding quarter and $90.0 million in the first quarter
of 2019. The increase in non-interest expense during the first quarter of 2020 reflects the first full quarter expenses associated with the operations acquired from AltaPacific, as well as lower deferred loan costs primarily related to lower loan
originations. Acquisition-related expenses were $1.1 million for the first quarter of 2020, compared to $4.4 million for the preceding quarter and $2.1 million in the first quarter of 2019. The current quarter includes a $1.7 million provision
for credit losses - unfunded loan commitments compared to no provision for the prior quarter or the year ago quarter. Banner’s efficiency ratio was 68.76% for the current quarter, compared to 67.03% in the preceding quarter and 67.06% in the year
ago quarter. Banner’s adjusted efficiency ratio* was 63.47% for the current quarter, compared to 61.19% in the preceding quarter and 63.32% in the year ago quarter.
For the first quarter of 2020, Banner had $4.6 million in state and federal income tax expense for an effective tax rate of 21.4%, reflecting the benefits from tax exempt income. Banner’s
statutory income tax rate is 23.5%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates.
BANR - First Quarter 2020 Results
April 27, 2020
Page 4
Balance Sheet Review
Total assets increased 1% to $12.78 billion at March 31, 2020, compared to $12.60 billion at December 31, 2019, and increased 9% when compared to $11.74 billion at March 31,
2019. The total of securities and interest-bearing deposits held at other banks was $2.15 billion at March 31, 2020, compared to $1.89 billion at both December 31, 2019 and March 31, 2019. The increase during the current quarter was primarily the
result of security purchases made towards the end of the quarter as balance sheet liquidity increased and market spreads widened. The average effective duration of Banner's securities portfolio was approximately 2.9 years at March 31, 2020,
compared to 3.0 years at March 31, 2019.
Net loans receivable decreased modestly to $9.16 billion at March 31, 2020, compared to $9.20 billion at December 31, 2019, and increased 7% when compared to $8.60 billion at
March 31, 2019. The year-over-year increase in net loans included $332.4 million of portfolio loans acquired in the AltaPacific acquisition during the preceding quarter. Commercial real estate and multifamily real estate loans increased slightly
to $4.02 billion at March 31, 2020, compared to $4.01 billion at December 31, 2019, and increased 11% compared to $3.63 billion a year ago. Commercial business loans increased 1% to $2.17 billion at March 31, 2020, compared to $2.14 billion at
December 31, 2019, and increased 12% compared to $1.94 billion a year ago. Agricultural business loans decreased to $330.3 million at March 31, 2020, compared to $337.3 million three months earlier and $339.5 million a year ago. Total
construction, land and land development loans were $1.22 billion at March 31, 2020, a small decrease from $1.23 billion at December 31, 2019, and a 6% increase compared to $1.15 billion a year earlier. Consumer loans decreased to $661.8 million at
March 31, 2020, compared to $664.3 million at December 31, 2019, and $693.3 million a year ago. One- to four-family loans decreased to $881.4 million at March 31, 2020, compared to $925.5 million at December 31, 2019, and $942.5 million a year
ago.
Loans held for sale were $182.4 million at March 31, 2020, compared to $210.4 million at December 31, 2019, and $45.9 million at March 31, 2019. The volume of one- to four- family residential
mortgage loans sold was $204.0 million in the current quarter, compared to $268.1 million in the preceding quarter and $107.2 million in the first quarter a year ago. During the first quarter of 2020, Banner sold $119.7 million in multifamily
loans compared to $103.4 million in the preceding quarter and $149.9 million in the first quarter a year ago.
Total deposits increased 4% to $10.45 billion at March 31, 2020, compared to $10.05 billion at December 31, 2019, and increased 11% when compared to $9.38 billion a year
ago. The year-over-year increase in deposits included $313.4 million in deposits acquired in the AltaPacific acquisition during the preceding quarter. Non-interest-bearing account balances increased 4% to $4.11 billion at March 31, 2020, compared
to $3.95 billion at December 31, 2019, and increased 12% compared to $3.68 billion a year ago. Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 4% from the prior quarter and increased 13%
compared to a year ago and represented 89% of total deposits at March 31, 2020. Certificates of deposit increased 4% to $1.17 billion at March 31, 2020, compared to $1.12 billion at December 31, 2019, and increased slightly compared to $1.16
billion a year earlier. The increase in certificates of deposit during the first quarter of 2020 primarily reflects the increase in brokered deposits to $251.0 million at March 31, 2020, compared to $202.9 million at December 31, 2019 and $239.4
million a year ago. FHLB borrowings totaled $247.0 million at March 31, 2020, compared to $450.0 million at December 31, 2019, and $418.0 million a year earlier.
At March 31, 2020, total common shareholders' equity was $1.60 billion, or 12.53% of assets, compared to $1.59 billion or 12.65% of assets at December 31, 2019, and $1.51
billion or 12.87% of assets a year ago. At March 31, 2020, tangible common shareholders' equity*, which excludes goodwill and other intangible assets, net, was $1.20 billion, or 9.70% of tangible assets*, compared to $1.19 billion, or 9.77% of
tangible assets, at December 31, 2019, and $1.14 billion, or 10.04% of tangible assets, a year ago. Banner's tangible book value per share* increased to $34.23 at March 31, 2020, compared to $32.47 per share a year ago.
Banner and its subsidiary banks continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At March 31, 2020, Banner's
common equity Tier 1 capital ratio was 10.52%, its Tier 1 leverage capital to average assets ratio was 10.45%, and its total capital to risk-weighted assets ratio was 12.98%.
Credit Quality
The allowance for credit losses - loans was $130.5 million at March 31, 2020, or 1.41% of total loans receivable outstanding and 299% of non-performing loans, compared to
$100.6 million at December 31, 2019, or 1.08% of total loans receivable outstanding and 254% of non-performing loans, and $97.3 million at March 31, 2019, or 1.12% of total loans receivable outstanding and 504% of non-performing loans. In addition
to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments which was $11.5 million at March 31, 2020, compared to $2.7 million at December 31, 2019 and $2.6 million at March 31, 2019.
Net loan recoveries totaled $404,000 in the first quarter, compared to net loan charge-offs of $1.2 million in both the preceding quarter and in the first quarter a year ago. Banner recorded a $21.7 million provision for credit losses in the
current quarter, compared to $4.0 million in the prior quarter and $2.0 million in the year ago quarter primarily due to forecasted credit losses related to the COVID-19 pandemic. Non-performing loans were $43.7 million at March 31, 2020, compared
to $39.6 million at December 31, 2019, and $19.3 million a year ago. The increase in non-performing loans year-over-year was largely due to one commercial banking relationship totaling $14.7 million moving to nonaccrual during the prior quarter.
Real estate owned and other repossessed assets were $2.4 million at March 31, 2020, compared to $936,000 at December 31, 2019, and $2.7 million a year ago.
In accordance with acquisition accounting, loans acquired from acquisitions were recorded at their estimated fair value, which resulted in a net discount to the loans’
contractual amounts, a portion of which reflects a discount for possible credit losses. Credit discounts are included in the determination of fair value, and as a result, no allowance for credit losses is recorded for acquired loans at the
acquisition date. At March 31, 2020, the total purchase discount for acquired loans was $22.2 million.
Banner's total non-performing assets were $46.1 million, or 0.36% of total assets, at March 31, 2020, compared to $40.5 million, or 0.32% of total assets, at December 31,
2019, and $22.0 million, or 0.19% of total assets, a year ago.
BANR - First Quarter 2020 Results
April 27, 2020
Page 5
Conference Call
Banner will host a conference call on Tuesday, April 28, 2020, at 8:00 a.m. PDT, to discuss its first quarter results. To listen to the call on-line, go to www.bannerbank.com.
Investment professionals are invited to dial (866) 235-9915 to participate in the call. A replay will be available for one week at (877) 344-7529 using access code 10140349, or at www.bannerbank.com.
About the Company
Banner Corporation is a $12.78 billion bank holding company operating two commercial banks in four Western states through a network of branches offering 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.
Forward-Looking Statements
When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or
other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "may," “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,”
“estimate,” “project,” “plans,” "potential," or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on
any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims 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 statements may relate to future financial performance, strategic plans or objectives, revenues or earnings
projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner's
operating and stock price performance.
Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following:
(1) the effect of the COVID-19 pandemic, including on Banner’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties
resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; (2)
the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions
for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (3) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other
things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner's activities; (5) competitive pressures among depository institutions; (6) interest rate movements
and their impact on customer behavior and net interest margin; (6) the impact of repricing and competitors' pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to
technological changes to meet customers' needs and developments in the market place; (9) the ability to access cost-effective funding; (10) changes in financial markets; (11) changes in economic conditions in general and in Washington, Idaho,
Oregon and California in particular; (12) the costs, effects and outcomes of litigation; (13) legislation or regulatory changes, including but not limited to the impact of the Dodd-Frank Act and regulations adopted thereunder, changes in
regulatory capital requirements pursuant to the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by
taxing authorities; (14) changes in accounting principles, policies or guidelines; (15) future acquisitions by Banner of other depository institutions or lines of business; (16) future goodwill impairment due to changes in Banner's business,
changes in market conditions, including as a result of the COVID-19 pandemic or other factors; and (17) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and
other risks detailed from time to time in our filings with the Securities and Exchange Commission including our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K.
BANR - First Quarter 2020 Results
April 27, 2020
Page 6
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RESULTS OF OPERATIONS
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Quarters Ended
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(in thousands except shares and per share data)
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Mar 31, 2020
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Dec 31, 2019
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Mar 31, 2019
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INTEREST INCOME:
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Loans receivable
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$
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118,926
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$
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120,915
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$
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115,455
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Mortgage-backed securities
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9,137
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8,924
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10,507
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Securities and cash equivalents
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3,602
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3,570
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4,034
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131,665
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133,409
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129,996
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INTEREST EXPENSE:
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Deposits
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8,750
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9,950
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8,643
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|
Federal Home Loan Bank advances
|
2,064
|
2,281
|
3,476
|
|||||||||
|
Other borrowings
|
116
|
121
|
60
|
|||||||||
|
Junior subordinated debentures
|
1,477
|
1,566
|
1,713
|
|||||||||
|
12,407
|
13,918
|
13,892
|
||||||||||
|
Net interest income before provision for credit losses
|
119,258
|
119,491
|
116,104
|
|||||||||
|
PROVISION FOR CREDIT LOSSES
|
21,748
|
4,000
|
2,000
|
|||||||||
|
Net interest income
|
97,510
|
115,491
|
114,104
|
|||||||||
|
NON-INTEREST INCOME:
|
||||||||||||
|
Deposit fees and other service charges
|
9,803
|
9,637
|
12,618
|
|||||||||
|
Mortgage banking operations
|
10,191
|
6,248
|
3,415
|
|||||||||
|
Bank-owned life insurance
|
1,050
|
1,170
|
1,276
|
|||||||||
|
Miscellaneous
|
2,639
|
3,201
|
804
|
|||||||||
|
23,683
|
20,256
|
18,113
|
||||||||||
|
Net gain on sale of securities
|
78
|
62
|
1
|
|||||||||
|
Net change in valuation of financial instruments carried at fair value
|
(4,596
|
)
|
(36
|
)
|
11
|
|||||||
|
Total non-interest income
|
19,165
|
20,282
|
18,125
|
|||||||||
|
NON-INTEREST EXPENSE:
|
||||||||||||
|
Salary and employee benefits
|
59,908
|
57,050
|
54,640
|
|||||||||
|
Less capitalized loan origination costs
|
(5,806
|
)
|
(8,797
|
)
|
(4,849
|
)
|
||||||
|
Occupancy and equipment
|
13,107
|
13,377
|
13,766
|
|||||||||
|
Information / computer data services
|
5,810
|
6,202
|
5,326
|
|||||||||
|
Payment and card processing services
|
4,240
|
4,638
|
3,984
|
|||||||||
|
Professional and legal expenses
|
1,919
|
2,262
|
2,434
|
|||||||||
|
Advertising and marketing
|
1,827
|
2,021
|
1,529
|
|||||||||
|
Deposit insurance expense
|
1,635
|
1,608
|
1,418
|
|||||||||
|
State/municipal business and use taxes
|
984
|
917
|
945
|
|||||||||
|
Real estate operations
|
100
|
40
|
(123
|
)
|
||||||||
|
Amortization of core deposit intangibles
|
2,001
|
2,061
|
2,052
|
|||||||||
|
Provision for credit losses - unfunded loan commitments
|
1,722
|
—
|
—
|
|||||||||
|
Miscellaneous
|
6,357
|
7,892
|
6,744
|
|||||||||
|
93,804
|
89,271
|
87,866
|
||||||||||
|
COVID-19 expenses
|
239
|
—
|
—
|
|||||||||
|
Acquisition-related expenses
|
1,142
|
4,419
|
2,148
|
|||||||||
|
Total non-interest expense
|
95,185
|
93,690
|
90,014
|
|||||||||
|
Income before provision for income taxes
|
21,490
|
42,083
|
42,215
|
|||||||||
|
PROVISION FOR INCOME TAXES
|
4,608
|
8,428
|
8,869
|
|||||||||
|
NET INCOME
|
$
|
16,882
|
$
|
33,655
|
$
|
33,346
|
||||||
|
Earnings per share available to common shareholders:
|
||||||||||||
|
Basic
|
$
|
0.48
|
$
|
0.96
|
$
|
0.95
|
||||||
|
Diluted
|
$
|
0.47
|
$
|
0.95
|
$
|
0.95
|
||||||
|
Cumulative dividends declared per common share
|
$
|
0.41
|
$
|
1.41
|
$
|
0.41
|
||||||
|
Weighted average common shares outstanding:
|
||||||||||||
|
Basic
|
35,463,541
|
35,188,399
|
35,050,376
|
|||||||||
|
Diluted
|
35,640,463
|
35,316,736
|
35,172,056
|
|||||||||
|
(Decrease) increase in common shares outstanding
|
(649,117
|
)
|
1,578,219
|
(30,026
|
)
|
|||||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 7
|
FINANCIAL CONDITION
|
Percentage Change
|
|||||||||||||||||
|
(in thousands except shares and per share data)
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
Prior Qtr
|
Prior Yr Qtr
|
|||||||||||||
|
ASSETS
|
||||||||||||||||||
|
Cash and due from banks
|
$
|
211,013
|
$
|
234,359
|
$
|
218,458
|
(10.0
|
)%
|
(3.4
|
)%
|
||||||||
|
Interest-bearing deposits
|
83,988
|
73,376
|
43,080
|
14.5
|
%
|
95.0
|
%
|
|||||||||||
|
Total cash and cash equivalents
|
295,001
|
307,735
|
261,538
|
(4.1
|
)%
|
12.8
|
%
|
|||||||||||
|
Securities - trading
|
21,040
|
25,636
|
25,838
|
(17.9
|
)%
|
(18.6
|
)%
|
|||||||||||
|
Securities - available for sale
|
1,608,224
|
1,551,557
|
1,603,804
|
3.7
|
%
|
0.3
|
%
|
|||||||||||
|
Securities - held to maturity
|
437,846
|
236,094
|
218,993
|
85.5
|
%
|
99.9
|
%
|
|||||||||||
|
Total securities
|
2,067,110
|
1,813,287
|
1,848,635
|
14.0
|
%
|
11.8
|
%
|
|||||||||||
|
Federal Home Loan Bank stock
|
20,247
|
28,342
|
27,063
|
(28.6
|
)%
|
(25.2
|
)%
|
|||||||||||
|
Loans held for sale
|
182,428
|
210,447
|
45,865
|
(13.3
|
)%
|
297.7
|
%
|
|||||||||||
|
Loans receivable
|
9,285,744
|
9,305,357
|
8,692,657
|
(0.2
|
)%
|
6.8
|
%
|
|||||||||||
|
Allowance for credit losses - loans
|
(130,488
|
)
|
(100,559
|
)
|
(97,308
|
)
|
29.8
|
%
|
34.1
|
%
|
||||||||
|
Net loans receivable
|
9,155,256
|
9,204,798
|
8,595,349
|
(0.5
|
)%
|
6.5
|
%
|
|||||||||||
|
Accrued interest receivable
|
40,732
|
37,962
|
41,220
|
7.3
|
%
|
(1.2
|
)%
|
|||||||||||
|
Real estate owned held for sale, net
|
2,402
|
814
|
2,611
|
195.1
|
%
|
(8.0
|
)%
|
|||||||||||
|
Property and equipment, net
|
175,235
|
178,008
|
171,057
|
(1.6
|
)%
|
2.4
|
%
|
|||||||||||
|
Goodwill
|
373,121
|
373,121
|
339,154
|
—
|
%
|
10.0
|
%
|
|||||||||||
|
Other intangibles, net
|
27,157
|
29,158
|
30,647
|
(6.9
|
)%
|
(11.4
|
)%
|
|||||||||||
|
Bank-owned life insurance
|
193,140
|
192,088
|
178,202
|
0.5
|
%
|
8.4
|
%
|
|||||||||||
|
Other assets
|
249,121
|
228,271
|
198,944
|
9.1
|
%
|
25.2
|
%
|
|||||||||||
|
Total assets
|
$
|
12,780,950
|
$
|
12,604,031
|
$
|
11,740,285
|
1.4
|
%
|
8.9
|
%
|
||||||||
|
LIABILITIES
|
||||||||||||||||||
|
Deposits:
|
||||||||||||||||||
|
Non-interest-bearing
|
$
|
4,107,262
|
$
|
3,945,000
|
$
|
3,676,984
|
4.1
|
%
|
11.7
|
%
|
||||||||
|
Interest-bearing transaction and savings accounts
|
5,175,969
|
4,983,238
|
4,535,969
|
3.9
|
%
|
14.1
|
%
|
|||||||||||
|
Interest-bearing certificates
|
1,166,306
|
1,120,403
|
1,163,276
|
4.1
|
%
|
0.3
|
%
|
|||||||||||
|
Total deposits
|
10,449,537
|
10,048,641
|
9,376,229
|
4.0
|
%
|
11.4
|
%
|
|||||||||||
|
Advances from Federal Home Loan Bank
|
247,000
|
450,000
|
418,000
|
(45.1
|
)%
|
(40.9
|
)%
|
|||||||||||
|
Customer repurchase agreements and other borrowings
|
128,764
|
118,474
|
121,719
|
8.7
|
%
|
5.8
|
%
|
|||||||||||
|
Junior subordinated debentures at fair value
|
99,795
|
119,304
|
113,917
|
(16.4
|
)%
|
(12.4
|
)%
|
|||||||||||
|
Accrued expenses and other liabilities
|
208,753
|
227,889
|
158,669
|
(8.4
|
)%
|
31.6
|
%
|
|||||||||||
|
Deferred compensation
|
45,401
|
45,689
|
40,560
|
(0.6
|
)%
|
11.9
|
%
|
|||||||||||
|
Total liabilities
|
11,179,250
|
11,009,997
|
10,229,094
|
1.5
|
%
|
9.3
|
%
|
|||||||||||
|
SHAREHOLDERS' EQUITY
|
||||||||||||||||||
|
Common stock
|
1,343,699
|
1,373,940
|
1,338,386
|
(2.2
|
)%
|
0.4
|
%
|
|||||||||||
|
Retained earnings
|
177,922
|
186,838
|
152,911
|
(4.8
|
)%
|
16.4
|
%
|
|||||||||||
|
Other components of shareholders' equity
|
80,079
|
33,256
|
19,894
|
140.8
|
%
|
nm
|
||||||||||||
|
Total shareholders' equity
|
1,601,700
|
1,594,034
|
1,511,191
|
0.5
|
%
|
6.0
|
%
|
|||||||||||
|
Total liabilities and shareholders' equity
|
$
|
12,780,950
|
$
|
12,604,031
|
$
|
11,740,285
|
1.4
|
%
|
8.9
|
%
|
||||||||
|
Common Shares Issued:
|
||||||||||||||||||
|
Shares outstanding at end of period
|
35,102,459
|
35,751,576
|
35,152,746
|
|||||||||||||||
|
Common shareholders' equity per share (1)
|
$
|
45.63
|
$
|
44.59
|
$
|
42.99
|
||||||||||||
|
Common shareholders' tangible equity per share (1) (2)
|
$
|
34.23
|
$
|
33.33
|
$
|
32.47
|
||||||||||||
|
Common shareholders' tangible equity to tangible assets (2)
|
9.70
|
%
|
9.77
|
%
|
10.04
|
%
|
||||||||||||
|
Consolidated Tier 1 leverage capital ratio
|
10.45
|
%
|
10.71
|
%
|
10.73
|
%
|
||||||||||||
|
(1)
|
Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding.
|
|
(2)
|
Common shareholders' tangible equity excludes goodwill and other intangible assets. Tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial
measures. See also Non-GAAP Financial Measures reconciliation tables on the final two pages of the press release tables.
|
BANR - First Quarter 2020 Results
April 27, 2020
Page 8
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
|
Percentage Change
|
||||||||||||||||||
|
LOANS
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
Prior Qtr
|
Prior Yr Qtr
|
|||||||||||||
|
Commercial real estate:
|
||||||||||||||||||
|
Owner-occupied
|
$
|
1,024,089
|
$
|
980,021
|
$
|
869,634
|
4.5
|
%
|
17.8
|
%
|
||||||||
|
Investment properties
|
2,007,537
|
2,024,988
|
1,838,328
|
(0.9
|
)%
|
9.2
|
%
|
|||||||||||
|
Small balance CRE
|
591,783
|
613,484
|
619,646
|
(3.5
|
)%
|
(4.5
|
)%
|
|||||||||||
|
Multifamily real estate
|
400,206
|
388,388
|
300,684
|
3.0
|
%
|
33.1
|
%
|
|||||||||||
|
Construction, land and land development:
|
||||||||||||||||||
|
Commercial construction
|
205,476
|
210,668
|
181,888
|
(2.5
|
)%
|
13.0
|
%
|
|||||||||||
|
Multifamily construction
|
250,410
|
233,610
|
183,203
|
7.2
|
%
|
36.7
|
%
|
|||||||||||
|
One- to four-family construction
|
534,956
|
544,308
|
514,410
|
(1.7
|
)%
|
4.0
|
%
|
|||||||||||
|
Land and land development
|
232,506
|
245,530
|
271,038
|
(5.3
|
)%
|
(14.2
|
)%
|
|||||||||||
|
Commercial business:
|
||||||||||||||||||
|
Commercial business
|
1,357,817
|
1,364,650
|
1,199,930
|
(0.5
|
)%
|
13.2
|
%
|
|||||||||||
|
Small business scored
|
807,539
|
772,657
|
738,665
|
4.5
|
%
|
9.3
|
%
|
|||||||||||
|
Agricultural business, including secured by farmland
|
330,257
|
337,271
|
339,472
|
(2.1
|
)%
|
(2.7
|
)%
|
|||||||||||
|
One- to four-family residential
|
881,387
|
925,531
|
942,477
|
(4.8
|
)%
|
(6.5
|
)%
|
|||||||||||
|
Consumer:
|
||||||||||||||||||
|
Consumer—home equity revolving lines of credit
|
521,618
|
519,336
|
532,600
|
0.4
|
%
|
(2.1
|
)%
|
|||||||||||
|
Consumer—other
|
140,163
|
144,915
|
160,682
|
(3.3
|
)%
|
(12.8
|
)%
|
|||||||||||
|
Total loans receivable
|
$
|
9,285,744
|
$
|
9,305,357
|
$
|
8,692,657
|
(0.2
|
)%
|
6.8
|
%
|
||||||||
|
Restructured loans performing under their restructured terms
|
$
|
6,423
|
$
|
6,466
|
$
|
13,036
|
||||||||||||
|
Loans 30 - 89 days past due and on accrual
|
$
|
39,974
|
$
|
20,178
|
$
|
28,972
|
||||||||||||
|
Total delinquent loans (including loans on non-accrual), net
|
$
|
61,101
|
$
|
38,322
|
$
|
46,616
|
||||||||||||
|
Total delinquent loans / Total loans receivable
|
0.66
|
%
|
0.41
|
%
|
0.54
|
%
|
||||||||||||
|
LOANS BY GEOGRAPHIC LOCATION
|
Percentage Change
|
|||||||||||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
Prior Qtr
|
Prior Yr Qtr
|
||||||||||||||||
|
Amount
|
Percentage
|
Amount
|
Amount
|
|||||||||||||||||
|
Washington
|
$
|
4,350,273
|
46.7%
|
$
|
4,364,764
|
$
|
4,329,759
|
(0.3
|
)%
|
0.5
|
%
|
|||||||||
|
California
|
2,140,895
|
23.1%
|
2,129,789
|
1,581,654
|
0.5
|
%
|
35.4
|
%
|
||||||||||||
|
Oregon
|
1,664,652
|
17.9%
|
1,650,704
|
1,639,427
|
0.8
|
%
|
1.5
|
%
|
||||||||||||
|
Idaho
|
524,663
|
5.7%
|
530,016
|
524,705
|
(1.0
|
)%
|
—
|
%
|
||||||||||||
|
Utah
|
52,747
|
0.6%
|
60,958
|
59,940
|
(13.5
|
)%
|
(12.0
|
)%
|
||||||||||||
|
Other
|
552,514
|
6.0%
|
569,126
|
557,172
|
(2.9
|
)%
|
(0.8
|
)%
|
||||||||||||
|
Total loans receivable
|
$
|
9,285,744
|
100.0%
|
$
|
9,305,357
|
$
|
8,692,657
|
(0.2
|
)%
|
6.8
|
%
|
|||||||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 9
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
The following table shows loan originations (excluding loans held for sale) activity for the quarters ending March 31, 2020, December 31, 2019, and March 31, 2019.
|
LOAN ORIGINATIONS
|
Quarters Ended
|
||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
Commercial real estate
|
$
|
76,359
|
$
|
165,064
|
$
|
92,183
|
|||||
|
Multifamily real estate
|
10,171
|
20,034
|
3,733
|
||||||||
|
Construction and land
|
369,613
|
530,195
|
231,744
|
||||||||
|
Commercial business
|
199,873
|
228,050
|
137,142
|
||||||||
|
Agricultural business
|
31,261
|
25,992
|
30,483
|
||||||||
|
One-to four-family residential
|
31,041
|
30,432
|
31,186
|
||||||||
|
Consumer
|
67,357
|
70,539
|
62,370
|
||||||||
|
Total loan originations (excluding loans held for sale)
|
$
|
785,675
|
$
|
1,070,306
|
$
|
588,841
|
|||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 10
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||
|
Quarters Ended
|
||||||||||||
|
CHANGE IN THE
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
ALLOWANCE FOR CREDIT LOSSES - LOANS
|
||||||||||||
|
Balance, beginning of period
|
$
|
100,559
|
$
|
97,801
|
$
|
96,485
|
||||||
|
Beginning balance adjustment for adoption of ASC 326
|
7,812
|
—
|
—
|
|||||||||
|
Provision for credit losses - loans
|
21,713
|
4,000
|
2,000
|
|||||||||
|
Recoveries of loans previously charged off:
|
||||||||||||
|
Commercial real estate
|
167
|
199
|
21
|
|||||||||
|
Construction and land
|
—
|
—
|
22
|
|||||||||
|
One- to four-family real estate
|
148
|
159
|
43
|
|||||||||
|
Commercial business
|
205
|
225
|
23
|
|||||||||
|
Agricultural business, including secured by farmland
|
1,750
|
10
|
—
|
|||||||||
|
Consumer
|
96
|
61
|
110
|
|||||||||
|
2,366
|
654
|
219
|
||||||||||
|
Loans charged off:
|
||||||||||||
|
Commercial real estate
|
(100
|
)
|
—
|
(431
|
)
|
|||||||
|
Multifamily real estate
|
(66
|
)
|
—
|
—
|
||||||||
|
Construction and land
|
—
|
(45
|
)
|
—
|
||||||||
|
One- to four-family real estate
|
(64
|
)
|
—
|
—
|
||||||||
|
Commercial business
|
(1,384
|
)
|
(1,180
|
)
|
(590
|
)
|
||||||
|
Agricultural business, including secured by farmland
|
—
|
(4
|
)
|
(4
|
)
|
|||||||
|
Consumer
|
(348
|
)
|
(667
|
)
|
(371
|
)
|
||||||
|
(1,962
|
)
|
(1,896
|
)
|
(1,396
|
)
|
|||||||
|
Net recoveries/(charge-offs)
|
404
|
(1,242
|
)
|
(1,177
|
)
|
|||||||
|
Balance, end of period
|
$
|
130,488
|
$
|
100,559
|
$
|
97,308
|
||||||
|
Net recoveries/(charge-offs) / Average loans receivable
|
0.004
|
%
|
(0.013
|
)%
|
(0.013
|
)%
|
||||||
|
ALLOCATION OF
|
||||||||||||
|
ALLOWANCE FOR CREDIT LOSSES - LOANS
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
Specific or allocated credit loss allowance:
|
||||||||||||
|
Commercial real estate
|
$
|
29,339
|
$
|
30,591
|
$
|
27,091
|
||||||
|
Multifamily real estate
|
2,805
|
4,754
|
4,020
|
|||||||||
|
Construction and land
|
34,217
|
22,994
|
23,713
|
|||||||||
|
One- to four-family real estate
|
11,884
|
4,136
|
4,711
|
|||||||||
|
Commercial business
|
31,648
|
23,370
|
18,662
|
|||||||||
|
Agricultural business, including secured by farmland
|
4,513
|
4,120
|
3,596
|
|||||||||
|
Consumer
|
16,082
|
8,202
|
7,980
|
|||||||||
|
Total allocated
|
130,488
|
98,167
|
89,773
|
|||||||||
|
Unallocated
|
—
|
2,392
|
7,535
|
|||||||||
|
Total allowance for credit losses - loans
|
$
|
130,488
|
$
|
100,559
|
$
|
97,308
|
||||||
|
Allowance for credit losses - loans / Total loans receivable
|
1.41
|
%
|
1.08
|
%
|
1.12
|
%
|
||||||
|
Allowance for credit losses - loans / Non-performing loans
|
299
|
%
|
254
|
%
|
504
|
%
|
||||||
|
Quarters Ended
|
||||||||||||
|
CHANGE IN THE
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS
|
||||||||||||
|
Balance, beginning of period
|
$
|
2,716
|
$
|
2,599
|
$
|
2,599
|
||||||
|
Beginning balance adjustment for adoption of ASC 326
|
7,022
|
—
|
—
|
|||||||||
|
Provision for credit losses - unfunded loan commitments
|
1,722
|
—
|
—
|
|||||||||
|
Additions through acquisitions
|
—
|
117
|
—
|
|||||||||
|
Balance, end of period
|
$
|
11,460
|
$
|
2,716
|
$
|
2,599
|
||||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 11
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||||
|
(dollars in thousands)
|
|||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
NON-PERFORMING ASSETS
|
|||||||||||
|
Loans on non-accrual status:
|
|||||||||||
|
Secured by real estate:
|
|||||||||||
|
Commercial
|
$
|
8,512
|
$
|
5,952
|
$
|
5,734
|
|||||
|
Multifamily
|
—
|
85
|
—
|
||||||||
|
Construction and land
|
1,393
|
1,905
|
3,036
|
||||||||
|
One- to four-family
|
3,045
|
3,410
|
1,538
|
||||||||
|
Commercial business
|
25,027
|
23,015
|
3,614
|
||||||||
|
Agricultural business, including secured by farmland
|
495
|
661
|
2,507
|
||||||||
|
Consumer
|
1,812
|
2,473
|
2,181
|
||||||||
|
40,284
|
37,501
|
18,610
|
|||||||||
|
Loans more than 90 days delinquent, still on accrual:
|
|||||||||||
|
Secured by real estate:
|
|||||||||||
|
Commercial
|
24
|
89
|
—
|
||||||||
|
Construction and land
|
1,407
|
332
|
—
|
||||||||
|
One- to four-family
|
1,089
|
877
|
640
|
||||||||
|
Commercial business
|
77
|
401
|
1
|
||||||||
|
Agricultural business, including secured by farmland
|
461
|
—
|
—
|
||||||||
|
Consumer
|
320
|
398
|
42
|
||||||||
|
3,378
|
2,097
|
683
|
|||||||||
|
Total non-performing loans
|
43,662
|
39,598
|
19,293
|
||||||||
|
Real estate owned (REO)
|
2,402
|
814
|
2,611
|
||||||||
|
Other repossessed assets
|
47
|
122
|
50
|
||||||||
|
Total non-performing assets
|
$
|
46,111
|
$
|
40,534
|
$
|
21,954
|
|||||
|
Total non-performing assets to total assets
|
0.36
|
%
|
0.32
|
%
|
0.19
|
%
|
|||||
|
Quarters Ended
|
|||||||||||
|
REAL ESTATE OWNED
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
||||||||
|
Balance, beginning of period
|
$
|
814
|
$
|
228
|
$
|
2,611
|
|||||
|
Additions from loan foreclosures
|
1,588
|
—
|
—
|
||||||||
|
Additions from acquisitions
|
—
|
650
|
—
|
||||||||
|
Proceeds from dispositions of REO
|
—
|
(105
|
)
|
—
|
|||||||
|
Gain on sale of REO
|
—
|
41
|
—
|
||||||||
|
Balance, end of period
|
$
|
2,402
|
$
|
814
|
$
|
2,611
|
|||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 12
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
|
DEPOSIT COMPOSITION
|
Percentage Change
|
|||||||||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
Prior Qtr
|
Prior Yr
Qtr
|
||||||||||||||
|
Non-interest-bearing
|
$
|
4,107,262
|
$
|
3,945,000
|
$
|
3,676,984
|
4.1
|
%
|
11.7
|
%
|
||||||||
|
Interest-bearing checking
|
1,331,860
|
1,280,003
|
1,174,169
|
4.1
|
%
|
13.4
|
%
|
|||||||||||
|
Regular savings accounts
|
1,997,265
|
1,934,041
|
1,865,852
|
3.3
|
%
|
7.0
|
%
|
|||||||||||
|
Money market accounts
|
1,846,844
|
1,769,194
|
1,495,948
|
4.4
|
%
|
23.5
|
%
|
|||||||||||
|
Total interest-bearing transaction and savings accounts
|
5,175,969
|
4,983,238
|
4,535,969
|
3.9
|
%
|
14.1
|
%
|
|||||||||||
|
Total core deposits
|
9,283,231
|
8,928,238
|
8,212,953
|
4.0
|
%
|
13.0
|
%
|
|||||||||||
|
Interest-bearing certificates
|
1,166,306
|
1,120,403
|
1,163,276
|
4.1
|
%
|
0.3
|
%
|
|||||||||||
|
Total deposits
|
$
|
10,449,537
|
$
|
10,048,641
|
$
|
9,376,229
|
4.0
|
%
|
11.4
|
%
|
||||||||
|
GEOGRAPHIC CONCENTRATION OF DEPOSITS
|
||||||||||||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
Percentage Change
|
|||||||||||||||||
|
Amount
|
Percentage
|
Amount
|
Amount
|
Prior Qtr
|
Prior Yr
Qtr
|
|||||||||||||||
|
Washington
|
$
|
6,037,864
|
57.8%
|
$
|
5,861,809
|
$
|
5,604,567
|
3.0
|
%
|
7.7
|
%
|
|||||||||
|
Oregon
|
2,093,738
|
20.0%
|
2,006,163
|
1,906,132
|
4.4
|
%
|
9.8
|
%
|
||||||||||||
|
California
|
1,828,064
|
17.5%
|
1,698,289
|
1,402,213
|
7.6
|
%
|
30.4
|
%
|
||||||||||||
|
Idaho
|
489,871
|
4.7%
|
482,380
|
463,317
|
1.6
|
%
|
5.7
|
%
|
||||||||||||
|
Total deposits
|
$
|
10,449,537
|
100.0%
|
$
|
10,048,641
|
$
|
9,376,229
|
4.0
|
%
|
11.4
|
%
|
|||||||||
|
INCLUDED IN TOTAL DEPOSITS
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
Public non-interest-bearing accounts
|
$
|
115,354
|
$
|
111,015
|
$
|
92,122
|
||||||
|
Public interest-bearing transaction & savings accounts
|
130,958
|
133,403
|
118,033
|
|||||||||
|
Public interest-bearing certificates
|
48,232
|
35,184
|
29,572
|
|||||||||
|
Total public deposits
|
$
|
294,544
|
$
|
279,602
|
$
|
239,727
|
||||||
|
Total brokered deposits
|
$
|
250,977
|
$
|
202,884
|
$
|
239,444
|
||||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 13
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||
|
(in thousands)
|
|||||
|
ACQUISITION OF ALTAPACIFIC BANCORP
|
|||||
|
The following table* provides the estimated fair value of the assets acquired and liabilities assumed in the AltaPacific acquisition at November 1,
2019 (in thousands):
|
|||||
|
November 1, 2019
|
|||||
|
Cash paid
|
$
|
2,360
|
|||
|
Fair value of common shares issued
|
85,200
|
||||
|
Total consideration
|
87,560
|
||||
|
Fair value of assets acquired:
|
|||||
|
Cash and cash equivalents
|
39,686
|
||||
|
Securities
|
20,348
|
||||
|
Federal Home Loan Bank stock
|
2,005
|
||||
|
Loans receivable
|
332,355
|
||||
|
Real estate owned held for sale
|
650
|
||||
|
Property and equipment
|
3,809
|
||||
|
Core deposit intangible
|
4,610
|
||||
|
Bank-owned life insurance
|
11,890
|
||||
|
Deferred tax asset
|
166
|
||||
|
Other assets
|
10,150
|
||||
|
Total assets acquired
|
425,669
|
||||
|
Fair value of liabilities assumed:
|
|||||
|
Deposits
|
313,374
|
||||
|
Advances from FHLB
|
40,226
|
||||
|
Junior subordinated debentures
|
5,814
|
||||
|
Deferred compensation
|
4,508
|
||||
|
Other liabilities
|
8,154
|
||||
|
Total liabilities assumed
|
372,076
|
||||
|
Net assets acquired
|
53,593
|
||||
|
Goodwill
|
$
|
33,967
|
|||
|
* Amounts recorded in this table are preliminary estimates of fair value. Additional adjustments to the acquisition accounting may be required with
a measurement period of one-year from the acquisition date.
|
|||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 14
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||||||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||||
|
Actual
|
Minimum to be
categorized as
"Adequately Capitalized"
|
Minimum to be
categorized as
"Well Capitalized"
|
|||||||||||||||||||
|
REGULATORY CAPITAL RATIOS AS OF MARCH 31, 2020
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||
|
Banner Corporation-consolidated:
|
|||||||||||||||||||||
|
Total capital to risk-weighted assets
|
$
|
1,397,202
|
12.98
|
%
|
$
|
860,978
|
8.00
|
%
|
$
|
1,076,223
|
10.00
|
%
|
|||||||||
|
Tier 1 capital to risk-weighted assets
|
1,275,806
|
11.85
|
%
|
645,734
|
6.00
|
%
|
645,734
|
6.00
|
%
|
||||||||||||
|
Tier 1 leverage capital to average assets
|
1,275,806
|
10.45
|
%
|
488,124
|
4.00
|
%
|
n/a
|
n/a
|
|||||||||||||
|
Common equity tier 1 capital to risk-weighted assets
|
1,132,306
|
10.52
|
%
|
484,300
|
4.50
|
%
|
n/a
|
n/a
|
|||||||||||||
|
Banner Bank:
|
|||||||||||||||||||||
|
Total capital to risk-weighted assets
|
1,331,615
|
12.59
|
%
|
846,284
|
8.00
|
%
|
1,057,856
|
10.00
|
%
|
||||||||||||
|
Tier 1 capital to risk-weighted assets
|
1,212,733
|
11.46
|
%
|
634,713
|
6.00
|
%
|
846,284
|
8.00
|
%
|
||||||||||||
|
Tier 1 leverage capital to average assets
|
1,212,733
|
10.18
|
%
|
476,371
|
4.00
|
%
|
595,464
|
5.00
|
%
|
||||||||||||
|
Common equity tier 1 capital to risk-weighted assets
|
1,212,733
|
11.46
|
%
|
476,035
|
4.50
|
%
|
687,606
|
6.50
|
%
|
||||||||||||
|
Islanders Bank:
|
|||||||||||||||||||||
|
Total capital to risk-weighted assets
|
31,693
|
16.99
|
%
|
14,923
|
8.00
|
%
|
18,654
|
10.00
|
%
|
||||||||||||
|
Tier 1 capital to risk-weighted assets
|
29,398
|
15.76
|
%
|
11,193
|
6.00
|
%
|
14,923
|
8.00
|
%
|
||||||||||||
|
Tier 1 leverage capital to average assets
|
29,398
|
10.05
|
%
|
11,706
|
4.00
|
%
|
14,632
|
5.00
|
%
|
||||||||||||
|
Common equity tier 1 capital to risk-weighted assets
|
29,398
|
15.76
|
%
|
8,394
|
4.50
|
%
|
12,125
|
6.50
|
%
|
||||||||||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 15
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||
|
(rates / ratios annualized)
|
||||||||||||||||||||||||||
|
ANALYSIS OF NET INTEREST SPREAD
|
Quarters Ended
|
|||||||||||||||||||||||||
|
March 31, 2020
|
December 31, 2019
|
March 31, 2019
|
||||||||||||||||||||||||
|
Average
Balance
|
Interest
and
Dividends
|
Yield /
Cost(3)
|
Average
Balance
|
Interest
and
Dividends
|
Yield /
Cost(3)
|
Average
Balance
|
Interest
and
Dividends
|
Yield /
Cost(3)
|
||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||||
|
Held for sale loans
|
$
|
152,627
|
$
|
1,520
|
4.01
|
%
|
$
|
202,686
|
$
|
2,048
|
4.01
|
%
|
$
|
98,005
|
$
|
1,121
|
4.64
|
%
|
||||||||
|
Mortgage loans
|
7,310,115
|
92,454
|
5.09
|
%
|
7,134,231
|
92,926
|
5.17
|
%
|
6,833,933
|
88,602
|
5.26
|
%
|
||||||||||||||
|
Commercial/agricultural loans
|
1,884,006
|
22,357
|
4.77
|
%
|
1,853,447
|
23,256
|
4.98
|
%
|
1,703,503
|
22,812
|
5.43
|
%
|
||||||||||||||
|
Consumer and other loans
|
163,098
|
2,595
|
6.40
|
%
|
169,197
|
2,685
|
6.30
|
%
|
183,451
|
2,920
|
6.46
|
%
|
||||||||||||||
|
Total loans(1)
|
9,509,846
|
118,926
|
5.03
|
%
|
9,359,561
|
120,915
|
5.13
|
%
|
8,818,892
|
115,455
|
5.31
|
%
|
||||||||||||||
|
Mortgage-backed securities
|
1,354,585
|
9,137
|
2.71
|
%
|
1,371,438
|
8,924
|
2.58
|
%
|
1,392,118
|
10,507
|
3.06
|
%
|
||||||||||||||
|
Other securities
|
458,116
|
2,887
|
2.53
|
%
|
418,767
|
2,663
|
2.52
|
%
|
484,134
|
3,479
|
2.91
|
%
|
||||||||||||||
|
Interest-bearing deposits with banks
|
92,659
|
393
|
1.71
|
%
|
107,959
|
531
|
1.95
|
%
|
44,757
|
289
|
2.62
|
%
|
||||||||||||||
|
FHLB stock
|
26,522
|
322
|
4.88
|
%
|
26,036
|
376
|
5.73
|
%
|
31,761
|
266
|
3.40
|
%
|
||||||||||||||
|
Total investment securities
|
1,931,882
|
12,739
|
2.65
|
%
|
1,924,200
|
12,494
|
2.58
|
%
|
1,952,770
|
14,541
|
3.02
|
%
|
||||||||||||||
|
Total interest-earning assets
|
11,441,728
|
131,665
|
4.63
|
%
|
11,283,761
|
133,409
|
4.69
|
%
|
10,771,662
|
129,996
|
4.89
|
%
|
||||||||||||||
|
Non-interest-earning assets
|
1,193,256
|
1,152,751
|
1,031,591
|
|||||||||||||||||||||||
|
Total assets
|
$
|
12,634,984
|
$
|
12,436,512
|
$
|
11,803,253
|
||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||||
|
Interest-bearing checking accounts
|
$
|
1,266,647
|
469
|
0.15
|
%
|
$
|
1,228,936
|
564
|
0.18
|
%
|
$
|
1,153,949
|
475
|
0.17
|
%
|
|||||||||||
|
Savings accounts
|
2,039,857
|
1,755
|
0.35
|
%
|
1,999,656
|
2,027
|
0.40
|
%
|
1,854,123
|
1,920
|
0.42
|
%
|
||||||||||||||
|
Money market accounts
|
1,743,118
|
2,439
|
0.56
|
%
|
1,607,954
|
2,842
|
0.70
|
%
|
1,490,326
|
2,251
|
0.61
|
%
|
||||||||||||||
|
Certificates of deposit
|
1,124,994
|
4,087
|
1.46
|
%
|
1,189,530
|
4,517
|
1.51
|
%
|
1,253,613
|
3,997
|
1.29
|
%
|
||||||||||||||
|
Total interest-bearing deposits
|
6,174,616
|
8,750
|
0.57
|
%
|
6,026,076
|
9,950
|
0.66
|
%
|
5,752,011
|
8,643
|
0.61
|
%
|
||||||||||||||
|
Non-interest-bearing deposits
|
3,965,380
|
—
|
—
|
%
|
3,959,097
|
—
|
—
|
%
|
3,605,922
|
—
|
—
|
%
|
||||||||||||||
|
Total deposits
|
10,139,996
|
8,750
|
0.35
|
%
|
9,985,173
|
9,950
|
0.40
|
%
|
9,357,933
|
8,643
|
0.37
|
%
|
||||||||||||||
|
Other interest-bearing liabilities:
|
||||||||||||||||||||||||||
|
FHLB advances
|
405,429
|
2,064
|
2.05
|
%
|
387,435
|
2,281
|
2.34
|
%
|
534,238
|
3,476
|
2.64
|
%
|
||||||||||||||
|
Other borrowings
|
124,771
|
116
|
0.37
|
%
|
126,782
|
121
|
0.38
|
%
|
118,008
|
60
|
0.21
|
%
|
||||||||||||||
|
Junior subordinated debentures
|
147,944
|
1,477
|
4.02
|
%
|
145,339
|
1,566
|
4.27
|
%
|
140,212
|
1,713
|
4.95
|
%
|
||||||||||||||
|
Total borrowings
|
678,144
|
3,657
|
2.17
|
%
|
659,556
|
3,968
|
2.39
|
%
|
792,458
|
5,249
|
2.69
|
%
|
||||||||||||||
|
Total funding liabilities
|
10,818,140
|
12,407
|
0.46
|
%
|
10,644,729
|
13,918
|
0.52
|
%
|
10,150,391
|
13,892
|
0.56
|
%
|
||||||||||||||
|
Other non-interest-bearing liabilities(2)
|
212,162
|
189,682
|
151,937
|
|||||||||||||||||||||||
|
Total liabilities
|
11,030,302
|
10,834,411
|
10,302,328
|
|||||||||||||||||||||||
|
Shareholders' equity
|
1,604,682
|
1,602,101
|
1,500,925
|
|||||||||||||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
12,634,984
|
$
|
12,436,512
|
$
|
11,803,253
|
||||||||||||||||||||
|
Net interest income/rate spread
|
$
|
119,258
|
4.17
|
%
|
$
|
119,491
|
4.17
|
%
|
$
|
116,104
|
4.33
|
%
|
||||||||||||||
|
Net interest margin
|
4.19
|
%
|
4.20
|
%
|
4.37
|
%
|
||||||||||||||||||||
|
Additional Key Financial Ratios:
|
||||||||||||||||||||||||||
|
Return on average assets
|
0.54
|
%
|
1.07
|
%
|
1.15
|
%
|
||||||||||||||||||||
|
Return on average equity
|
4.23
|
%
|
8.33
|
%
|
9.01
|
%
|
||||||||||||||||||||
|
Average equity/average assets
|
12.70
|
%
|
12.88
|
%
|
12.72
|
%
|
||||||||||||||||||||
|
Average interest-earning assets/average interest-bearing
liabilities
|
166.97
|
%
|
168.78
|
%
|
164.59
|
%
|
||||||||||||||||||||
|
Average interest-earning assets/average funding liabilities
|
105.76
|
%
|
106.00
|
%
|
106.12
|
%
|
||||||||||||||||||||
|
Non-interest income/average assets
|
0.61
|
%
|
0.65
|
%
|
0.62
|
%
|
||||||||||||||||||||
|
Non-interest expense/average assets
|
3.03
|
%
|
2.99
|
%
|
3.09
|
%
|
||||||||||||||||||||
|
Efficiency ratio(4)
|
68.76
|
%
|
67.03
|
%
|
67.06
|
%
|
||||||||||||||||||||
|
Adjusted efficiency ratio(5)
|
63.47
|
%
|
61.19
|
%
|
63.32
|
%
|
||||||||||||||||||||
|
(1)
|
Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
|
|
(2)
|
Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
|
|
(3)
|
Yields and costs have not been adjusted for the effect of tax-exempt interest.
|
|
(4)
|
Non-interest expense divided by the total of net interest income (before provision for loan losses) and non-interest income.
|
|
(5)
|
Adjusted non-interest expense divided by adjusted revenue. Adjusted revenue excludes net gain (loss) on sale of securities and fair value adjustments. Adjusted non-interest expense excludes
acquisition-related expenses, COVID-19 expenses, amortization of core deposit intangibles (CDI), REO gain (loss), FHLB prepayment penalties and state/municipal business and use taxes. These represent non-GAAP financial measures. See also
Non-GAAP Financial Measures reconciliation tables on the last two pages of this press release.
|
BANR - First Quarter 2020 Results
April 27, 2020
Page 16
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||||
|
(dollars in thousands)
|
|||||||||||
|
* Non-GAAP Financial Measures
|
|||||||||||
|
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release
contains certain non-GAAP 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 Banner's core
operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis
based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled
measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:
|
|||||||||||
| |
|||||||||||
|
ADJUSTED REVENUE
|
Quarters Ended
|
||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
Net interest income before provision for loan losses
|
$
|
119,258
|
$
|
119,491
|
$
|
116,104
|
|||||
|
Total non-interest income
|
19,165
|
20,282
|
18,125
|
||||||||
|
Total GAAP revenue
|
138,423
|
139,773
|
134,229
|
||||||||
|
Exclude net gain on sale of securities
|
(78
|
)
|
(62
|
)
|
(1
|
)
|
|||||
|
Exclude net change in valuation of financial instruments carried at fair value
|
4,596
|
36
|
(11
|
)
|
|||||||
|
Adjusted revenue (non-GAAP)
|
$
|
142,941
|
$
|
139,747
|
$
|
134,217
|
|||||
|
ADJUSTED EARNINGS
|
Quarters Ended
|
|||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
||||||||||
|
Net income (GAAP)
|
$
|
16,882
|
$
|
33,655
|
$
|
33,346
|
||||||
|
Exclude net gain on sale of securities
|
(78
|
)
|
(62
|
)
|
(1
|
)
|
||||||
|
Exclude net change in valuation of financial instruments carried at fair value
|
4,596
|
36
|
(11
|
)
|
||||||||
|
Exclude acquisition-related expenses
|
1,142
|
4,419
|
2,148
|
|||||||||
|
Exclude COVID-19 expenses
|
239
|
—
|
—
|
|||||||||
|
Exclude related net tax benefit
|
(1,405
|
)
|
(1,074
|
)
|
(513
|
)
|
||||||
|
Exclude FHLB prepayment penalties
|
—
|
735
|
—
|
|||||||||
|
Total adjusted earnings (non-GAAP)
|
$
|
21,376
|
$
|
37,709
|
$
|
34,969
|
||||||
|
Diluted earnings per share (GAAP)
|
$
|
0.47
|
$
|
0.95
|
$
|
0.95
|
||||||
|
Diluted adjusted earnings per share (non-GAAP)
|
$
|
0.60
|
$
|
1.07
|
$
|
0.99
|
||||||
BANR - First Quarter 2020 Results
April 27, 2020
Page 17
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||
|
ADJUSTED EFFICIENCY RATIO
|
Quarters Ended
|
|||||||||||
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
||||||||||
|
Non-interest expense (GAAP)
|
$
|
95,185
|
$
|
93,690
|
$
|
90,014
|
||||||
|
Exclude acquisition-related expenses
|
(1,142
|
)
|
(4,419
|
)
|
(2,148
|
)
|
||||||
|
Exclude COVID-19 expenses
|
(239
|
)
|
—
|
—
|
||||||||
|
Exclude CDI amortization
|
(2,001
|
)
|
(2,061
|
)
|
(2,052
|
)
|
||||||
|
Exclude state/municipal tax expense
|
(984
|
)
|
(917
|
)
|
(945
|
)
|
||||||
|
Exclude REO operations
|
(100
|
)
|
(40
|
)
|
123
|
|||||||
|
Exclude FHLB prepayment penalties
|
—
|
(735
|
)
|
—
|
||||||||
|
Adjusted non-interest expense (non-GAAP)
|
$
|
90,719
|
$
|
85,518
|
$
|
84,992
|
||||||
|
Net interest income before provision for loan losses (GAAP)
|
$
|
119,258
|
$
|
119,491
|
$
|
116,104
|
||||||
|
Non-interest income (GAAP)
|
19,165
|
20,282
|
18,125
|
|||||||||
|
Total revenue
|
138,423
|
139,773
|
134,229
|
|||||||||
|
Exclude net gain on sale of securities
|
(78
|
)
|
(62
|
)
|
(1
|
)
|
||||||
|
Exclude net change in valuation of financial instruments carried at fair value
|
4,596
|
36
|
(11
|
)
|
||||||||
|
Adjusted revenue (non-GAAP)
|
$
|
142,941
|
$
|
139,747
|
$
|
134,217
|
||||||
|
Efficiency ratio (GAAP)
|
68.76
|
%
|
67.03
|
%
|
67.06
|
%
|
||||||
|
Adjusted efficiency ratio (non-GAAP)
|
63.47
|
%
|
61.19
|
%
|
63.32
|
%
|
||||||
|
TANGIBLE COMMON SHAREHOLDERS' EQUITY TO TANGIBLE ASSETS
|
Mar 31, 2020
|
Dec 31, 2019
|
Mar 31, 2019
|
|||||||||
|
Shareholders' equity (GAAP)
|
$
|
1,601,700
|
$
|
1,594,034
|
$
|
1,511,191
|
||||||
|
Exclude goodwill and other intangible assets, net
|
400,278
|
402,279
|
369,801
|
|||||||||
|
Tangible common shareholders' equity (non-GAAP)
|
$
|
1,201,422
|
$
|
1,191,755
|
$
|
1,141,390
|
||||||
|
Total assets (GAAP)
|
$
|
12,780,950
|
$
|
12,604,031
|
$
|
11,740,285
|
||||||
|
Exclude goodwill and other intangible assets, net
|
400,278
|
402,279
|
369,801
|
|||||||||
|
Total tangible assets (non-GAAP)
|
$
|
12,380,672
|
$
|
12,201,752
|
$
|
11,370,484
|
||||||
|
Common shareholders' equity to total assets (GAAP)
|
12.53
|
%
|
12.65
|
%
|
12.87
|
%
|
||||||
|
Tangible common shareholders' equity to tangible assets (non-GAAP)
|
9.70
|
%
|
9.77
|
%
|
10.04
|
%
|
||||||
|
TANGIBLE COMMON SHAREHOLDERS' EQUITY PER SHARE
|
||||||||||||
|
Tangible common shareholders' equity (non-GAAP)
|
$
|
1,201,422
|
$
|
1,191,755
|
$
|
1,141,390
|
||||||
|
Common shares outstanding at end of period
|
35,102,459
|
35,751,576
|
35,152,746
|
|||||||||
|
Common shareholders' equity (book value) per share (GAAP)
|
$
|
45.63
|
$
|
44.59
|
$
|
42.99
|
||||||
|
Tangible common shareholders' equity (tangible book value) per share (non-GAAP)
|
$
|
34.23
|
$
|
33.33
|
$
|
32.47
|
||||||
