Attached files
file | filename |
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8-K - BANNER CORPORATION FORM 8-K - BANNER CORP | k8123110.htm |
Exhibit 99.1
|
Contact: Mark
J. Grescovich,
President &
CEO
Lloyd W. Baker,
CFO
(509)
527-3636 |
|
News
Release
|
Banner Corporation Announces
Fourth Quarter and Year End Results
Walla
Walla, WA – January 26, 2011 - Banner Corporation (NASDAQ GSM: BANR), the parent
company of Banner Bank and Islanders Bank, today reported that it had a net loss
of $12.7 million in the quarter ended December 31, 2010, compared to a net loss
of $42.7 million in the immediately preceding quarter and a net loss of $3.5
million in the fourth quarter a year ago.
“Further
margin expansion and increased net interest income supported strong revenue
generation during the fourth quarter, despite a decline in income from mortgage
banking operations. Throughout the year ended December 31, 2010, we
have improved our core business by continuing to change the composition of our
deposit portfolio, growing non-interest-bearing and other core deposit balances
and adding customer relationships, while strengthening our on-balance-sheet
liquidity and capital base, realigning and refocusing our delivery platforms and
effectively managing controllable operating expenses,” said Mark J. Grescovich,
President and Chief Executive Officer. “The result has been
meaningful improvement in our core operations and growth in recurring revenues
compared to similar periods a year earlier. While we are pleased that
we continued to make progress in these areas in the fourth quarter, our still
too high level of non-performing assets and related credit costs again adversely
affected our operating results. Although we made modest progress
during the quarter in reducing non-performing loans and selling acquired real
estate, significantly improving our asset quality through aggressive management
of our problem assets remains the primary focus for Banner that will allow us to
return to profitability.”
In the
fourth quarter, Banner paid a $1.6 million dividend on the $124 million of
senior preferred stock it issued to the U.S. Treasury in the fourth quarter of
2008 in connection with its participation in the Treasury’s Capital Purchase
Program. In addition, Banner accrued $398,000 for related discount
accretion. Including the preferred stock dividend and related
accretion, the net loss to common shareholders was $0.13 per share for the
quarter ended December 31, 2010, compared to a net loss to common shareholders
of $0.40 per share in the third quarter of 2010 and $0.27 per share for the
fourth quarter a year ago.
For the
year 2010, Banner reported a net loss of $61.9 million compared to a net loss of
$35.8 million for 2009. The full year 2010 results included an $18.0 million
non-cash provision for income taxes as a result of adjustments to current and
deferred tax assets. Results for the full year 2009 included a tax
benefit of $27.1 million. For the year ended December 31, 2010, the
net loss to common shareholders, including the preferred stock dividend and
related accretion, was $1.03 per share, compared to a net loss of $2.33 per
share for 2009.
Credit
Quality
“Our
credit quality metrics further stabilized during the quarter, with
non-performing loans, real estate owned and total non-performing asset levels
all decreasing at December 31, 2010 compared to the prior quarter end,” said
Grescovich. “However, the provision for loan losses and expenses
related to real estate owned remained high in the fourth
quarter. Charge-offs and delinquencies, as well as real estate
expenses and valuation adjustments continued to be concentrated in loans for the
construction of single-family homes and residential land development
projects. Our exposure to one-to-four family residential construction
and land development loans has continued to decline and at year-end had been
reduced to just 9.4% of total loans outstanding. Although this is
slightly below our long-term target range under improved market conditions, we
do expect the land development portion of this portfolio to continue to decline
over the near term. Our impairment analysis and charge-off actions
reflect current appraisals and valuation estimates and our reserve levels are
substantial, resulting in increased coverage ratios relative to both
non-performing loans and total loans at quarter end. We will remain
diligent in our efforts to reduce credit costs substantially in 2011and beyond
as further problem asset resolution occurs and the economy continues to
recover.”
Banner
recorded a $20.0 million provision for loan losses in the fourth quarter of
2010, the same as in the preceding quarter. In the fourth quarter of
2009, Banner recorded a provision for loan losses of $17.0
million. For the year ended December 31, 2010, Banner’s provision for
loan losses was $70.0 million compared to $109.0 million for the year ended
December 31, 2009. The allowance for loan losses at December 31, 2010
totaled $97.4 million, representing 2.86% of total loans outstanding and 64% of
non-performing loans. Non-performing loans totaled $151.5 million at
December 31, 2010, compared to $170.3 million in the preceding quarter and
$213.9 million a year earlier. Banner’s real estate owned and
repossessed assets totaled $100.9 million at December 31, 2010, compared to
$107.3 million three months earlier and $77.8 million a year ago. Net
charge-offs in the fourth quarter of 2010 totaled
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BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
2
0.55% of
average loans outstanding, compared to $19.1 million, or 0.53% of average loans
outstanding for the third quarter of 2010 and $16.9 million, or 0.44% of average
loans outstanding for the fourth quarter a year ago. Net charge-offs
for the full year 2010 were $67.9 million, or 1.88% of average loans compared to
$88.9 million, or 2.28% of average loans outstanding in
2009. Non-performing assets totaled $254.3 million at December 31,
2010, compared to $278.2 million in the preceding quarter and $295.9 million a
year earlier. At year-end, Banner’s non-performing assets were 5.77%
of total assets, compared to 6.05% at the end of the preceding quarter and 6.27%
a year ago.
One-to-four
family residential construction, land and land development loans were $321.1
million, or 9.4% of the total loan portfolio at December 31, 2010, compared to
$523.5 million, or 13.8% of the total loan portfolio a year
earlier. The geographic distribution of these residential
construction, land and land development loans was approximately $102.9 million,
or 32%, in the greater Puget Sound market, $142.3 million, or 44%, in the
greater Portland, Oregon market and $13.4 million, or 4%, in the greater Boise,
Idaho market as of December 31, 2010. The remaining $62.5 million, or
20%, was distributed in the various eastern Washington, eastern Oregon and
northern Idaho markets served by Banner Bank.
Non-performing
residential construction, land and land development loans and related real
estate owned were $134.1 million, or 53% of non-performing assets at December
31, 2010. The geographic distribution of non-performing construction,
land and land development loans and related real estate owned included
approximately $54.5 million, or 41%, in the greater Puget Sound market, $56.1
million, or 42%, in the greater Portland market and $13.6 million, or 10%, in
the greater Boise market, with the remaining $9.9 million, or 7%, distributed in
the various eastern Washington, eastern Oregon and northern Idaho markets
served by Banner Bank.
Income
Statement Review
“We
further significantly reduced our cost of funds during the quarter through
changes in our deposit mix and additional re-pricing
opportunities. The reduced cost of funds made it possible for us to
improve our net interest margin by 18 basis points compared to the immediately
preceding quarter and to increase it by 32 basis points compared to the fourth
quarter a year ago, despite significant pressure on asset yields,” said
Grescovich. “Loan yields, which have been relatively stable for a
number of quarters, decreased slightly in the fourth quarter, reflecting the
impact of the continuing low interest rate environment on new loans and
renewals. However, overall asset yields declined more meaningfully as
securities yields declined sharply throughout the year and we continued to
maintain a strong level of on-balance-sheet liquidity that is currently invested
in short-term instruments that pay very low interest rates.” Banner’s
net interest margin was 3.81% for the fourth quarter, compared to 3.63% in the
preceding quarter and 3.49% in the fourth quarter a year ago. For the
year, Banner’s net interest margin was 3.67%, a 34 basis point improvement
compared to 3.33% in 2009.
Funding
costs for the fourth quarter decreased 25 basis points compared to the previous
quarter and 75 basis points from the fourth quarter a year
ago. Deposit costs decreased by 26 basis points compared to the
preceding quarter and 80 basis points compared to the fourth quarter a year
earlier. Asset yields decreased five basis points from the prior
quarter and 43 basis points from the fourth quarter a year ago. Loan
yields declined two basis points compared to the preceding quarter, and declined
three basis points from the fourth quarter a year ago. Non-accruing
loans reduced the margin by approximately 33 basis points in both the fourth
quarter and in the preceding third quarter and approximately 37 basis
points in the fourth quarter of 2009.
Net
interest income before the provision for loan losses was $40.8 million in the
fourth quarter of 2010, compared to $39.9 million in the preceding quarter and
$38.3 million in the fourth quarter a year ago. For the year, net
interest income before the provision for loan losses increased 9% to $157.8
million, compared to $144.6 million in 2009. Revenues from core
operations* (net interest income before the provision for loan losses plus total
other operating income excluding fair value and other-than-temporary impairment
(OTTI) adjustments) were $49.0 million in the fourth quarter of 2010, compared
to $49.2 million in the third quarter of 2010 and $45.4 million for the fourth
quarter a year ago. Revenues from core operations for the year
increased 7% to $189.4 million, compared to $177.2 million in 2009.
Banner’s
fourth quarter 2010 results included a net loss of $706,000 ($706,000 after tax,
or $0.01 loss per share) for fair value adjustments as a result of changes in
the valuation of financial instruments carried at fair value, compared to a net
gain of $1.4 million ($1.4 million after tax, or $0.02 earnings per share) in
the third quarter of 2010 and a net loss of $1.4 million ($0.9 million after
tax, or $0.04 loss per share) in the fourth quarter a year ago. For
the year ended December 31, 2010, fair value adjustments resulted in a net gain
of $1.7 million ($1.4 million after tax, or $0.02 earnings per share), compared
to a net gain of $12.5 million ($8.0 million after tax, or $0.43 earnings per
share) for the year ended December 31, 2009.
Total
other operating income, which includes the changes in the valuation of financial
instruments noted above and OTTI adjustments, was $7.6 million in the fourth
quarter of 2010, compared to $7.7 million in the preceding quarter and $5.6
million for the fourth quarter a year ago. For the year, total other
operating income was $29.1 million, compared to $43.7 million in
2009. There were no OTTI charges during the current fourth quarter as
compared to $3.0 million in the prior quarter and none for the fourth quarter a
year ago. OTTI charges for the year totaled $4.2 million as compared
to $1.5 million in 2009. Total other operating income from core
operations* (other operating income excluding fair value and OTTI adjustments)
for the current quarter was $8.3 million, compared to
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BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
3
$9.3
million the preceding quarter, and $7.0 million for the fourth quarter a year
ago. For the year, total other operating income from core operations*
decreased to $31.6 million, compared to $32.7 million in 2009, primarily as a
result of a decline in mortgage banking revenues in 2010.
“Mortgage
loan production levels increased modestly during the fourth quarter, although
gains on loan sales declined compared to the level recorded in the third quarter
when we sold a portion of the loans we had accumulated through our Great
Northwest Home Rush program,” said Grescovich. “Deposit fees and
other service charges decreased modestly during the quarter as activity levels
for certain of these revenue sources declined slightly; however, these fees
increased compared to the fourth quarter a year ago, primarily reflecting
account growth and increased volumes of debit and credit card activity, which
more than offset decreased overdraft charges.” Income from mortgage
banking operations was $2.1 million in the quarter ended December 31, 2010,
compared to $2.5 million in the immediately preceding quarter and $1.3 million
in the fourth quarter of 2009. Deposit fees and other service charges
were $5.5 million in the fourth quarter compared to $5.7 million in the
preceding quarter and $5.3 million in the fourth quarter a year
ago.
“Operating
expenses decreased during the quarter compared to the preceding quarter,
primarily due to a lower amount of valuation adjustments in the real estate
owned portfolio than was recorded during the third quarter of 2010,” said
Grescovich. “Aside from the costs associated with real estate owned,
our operating expenses were little changed from recent
quarters. While we are working diligently to keep controllable
operating expenses in line, we expect collection expenses and costs associated
with real estate owned to remain elevated for a few more quarters as we work
down our inventory of non-performing assets.”
Total
other operating expenses, or non-interest expenses, were $41.0 million in the
fourth quarter of 2010, compared to $46.3 million in the preceding quarter and
$34.8 million in the fourth quarter a year ago. For the year, other
operating expenses were $160.8 million compared to $142.1 million in
2009. The increase in operating expense for the year largely reflects
charges, including valuation adjustments, related to Banner’s real estate owned,
which increased to $26.0 million for the year compared to $7.1 million a year
ago.
*Earnings
information excluding fair value and OTTI adjustments (alternately referred to
as total other operating income from core operation or revenues from core
operations) represent non-GAAP (Generally Accepted Accounting Principles)
financial measures. Management has presented these non-GAAP financial
measures in this earnings release because it believes that they provide useful
and comparative information to assess trends in the Company’s core operations
reflected in the current quarter’s results. Where applicable, the
Company has also presented comparable earnings information using GAAP financial
measures.
Balance
Sheet Review
“Loan
demand remained soft as both businesses and consumers continued to deleverage
their balance sheets and remain very cautious in the current economic
environment. In addition, we have continued to intentionally reduce
our construction and land development loans during the past year, including
additional reductions in the most recent quarter. As a result, total
loans declined further in the fourth quarter,” said Grescovich.
Net loans
were $3.31 billion at December 31, 2010, compared to $3.40 billion at September
30, 2010 and $3.69 billion a year ago. At December 31, 2010, our
one-to-four family construction loans totaled $153.4 million, an $85.8 million
reduction over the past year and a reduction of $501.6 million from their peak
quarter-end balance of $655.0 million at June 30, 2007. Similarly,
total construction, land and land development loans have declined by $796.4
million from their peak quarter-end balance of $1.24 billion at June 30,
2007.
Total
assets were $4.41 billion at December 31, 2010, compared to $4.60 billion at the
end of the preceding quarter and $4.72 billion a year ago. Deposits
totaled $3.59 billion at year-end, compared to $3.76 billion at the end of the
preceding quarter and $3.87 billion a year ago. Non-interest-bearing
accounts totaled $600 million at December 31, 2010, compared to $613 million at
the end of the preceding quarter and $582 million a year ago, a year-over-year
increase of 3%. At December 31, 2010, interest-bearing transaction
and savings accounts were $1.43 billion, compared to $1.46 billion at the end of
the preceding quarter and $1.34 billion a year ago, a year-over-year increase of
7%.
“We made
further progress in implementing our strategies to strengthen the franchise
through our super community bank model,” said Grescovich. “We have
significantly reduced our reliance on higher cost certificates of deposit by
emphasizing core deposit activity in non-interest-bearing and other transaction
and savings deposit products. This strategy continues to help improve
our cost of funds and increase the opportunity for deposit fee
revenue. Much lower rates on renewed and retained certificates of
deposit also significantly contributed to the decline in the cost of deposits
and are expected to provide a substantial benefit in future
periods.”
Tangible
stockholders’ equity at December 31, 2010 was $502.9 million, including $119.0
million attributable to preferred stock. Tangible book value per
common share was $3.40 at year-end. During 2010, Banner completed a
common stock offering, issuing a total of 85,639,000 shares in the offering,
resulting in net proceeds of approximately $161.6 million. At
December 31, 2010, Banner had 113.2 million shares outstanding, compared to 21.5
million shares outstanding a year ago. Tangible common stockholders’
equity was $383.9 million at December 31, 2010, or 8.73% of tangible assets,
compared to $397.0 million, or 8.65% of tangible assets at September 30, 2010
and $276.7 million, or 5.87% of tangible assets a year ago.
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BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
4
Augmented
by the recent stock offering, Banner Corporation and its subsidiary banks
continue to maintain capital levels significantly in excess of the requirements
to be categorized as “well-capitalized” under applicable regulatory
standards. Banner Corporation used a significant portion of the net
proceeds from the offering to strengthen Banner Bank’s regulatory capital ratios
while retaining the balance for general working capital purposes, including
additional capital investments in its subsidiary banks if
appropriate. Through December 31, 2010, Banner Corporation had
invested $110.0 million of the net proceeds as additional paid-in common equity
in Banner Bank, although no additional equity investment was made during the
most recent quarter. Banner Corporation’s Tier 1 leverage capital to
average assets ratio was 12.24% and its total capital to risk-weighted assets
ratio was 16.88% at December 31, 2010. Banner Bank’s Tier 1 leverage
ratio was 10.84% at December 31, 2010, and in excess of the minimum level of 10%
targeted in our Memorandum of Understanding agreed to with the
FDIC.
Conference
Call
Banner
will host a conference call on Thursday, January 27, 2011, at 8:00 a.m. PST, to
discuss fourth quarter and year-end results. The conference call can
be accessed live by telephone at (480) 629-9723 to participate in the
call. To listen to the call online, go to the Company’s website at
www.bannerbank.com. A
replay will be available for a week at (303) 590-3030, using access code
4399064.
About
the Company
Banner
Corporation is a $4.41 billion bank holding company operating two commercial
banks in Washington, Oregon and Idaho. Banner serves the Pacific
Northwest region with a full range of deposit services and business, commercial
real estate, construction, residential, agricultural and consumer
loans. Visit Banner Bank on the Web at www.bannerbank.com.
This press release
contains statements that the Company believes are “forward-looking statements.”
These statements relate to the Company’s financial condition, results of
operations, plans, objectives, future performance or business. You should not
place undue reliance on these statements, as they are subject to risks and
uncertainties. When considering these forward-looking statements, you should
keep in mind these risks and uncertainties, as well as any cautionary statements
the Company may make. Moreover, you should treat these statements as speaking
only as of the date they are made and based only on information then actually
known to the Company. There are a number of important factors that could cause
future results to differ materially from historical performance and these
forward-looking statements. Factors which could
cause actual results to differ materially include, but are not limited to, the
credit risks of lending activities, including changes in the level and trend of
loan delinquencies and write-offs and changes in our allowance for loan losses
and provision for loan losses that may be impacted by deterioration in the
housing and commercial real estate markets and may lead to increased losses and
non-performing assets and may result in our allowance for loan losses not being
adequate to cover actual losses; changes in general economic conditions, either
nationally or in our market areas; changes in the levels of general interest
rates and the relative differences between short and long-term interest rates,
deposit interest rates, our net interest margin and funding sources;
fluctuations in the demand for loans, the number of unsold homes, land and other
properties and fluctuations in real estate values in our market areas; secondary
market conditions for loans and our ability to sell loans in the secondary
market; results of examinations of us by the Board of Governors of the Federal
Reserve System and of our bank subsidiaries by the Federal Deposit Insurance
Corporation, the Washington State Department of Financial Institutions, Division
of Banks or other regulatory authorities, including the possibility that any
such regulatory authority may, among other things, institute a formal or
informal enforcement action against us or any of the Banks which could require
us to increase our reserve for loan losses, write-down assets, change our
regulatory capital position or affect our ability to borrow funds or maintain or
increase deposits, which could adversely affect our liquidity and earnings; our
compliance with regulatory enforcement actions; the requirements and
restrictions that have been imposed upon Banner and Banner Bank under the
memoranda of understanding with the Federal Reserve Bank of San Francisco (in
the case of Banner) and the FDIC and the Washington DFI (in the case of Banner
Bank) and the possibility that Banner and Banner Bank will be unable to fully
comply with the memoranda of understanding, which could result in the imposition
of additional requirements or restrictions; legislative or regulatory changes
that adversely affect our business including changes in regulatory policies and
principles, or the interpretation of regulatory capital or other rules; our
ability to attract and retain deposits; further increases in premiums for
deposit insurance; our ability to control operating costs and expenses; the use
of estimates in determining fair value of certain of our assets, which estimates
may prove to be incorrect and result in significant declines in valuation;
staffing fluctuations in response to product demand or the implementation of
corporate strategies that affect our workforce and potential associated charges;
the failure or security breach of computer systems on which we depend; our
ability to retain key members of our senior management team; costs and effects
of litigation, including settlements and judgments; our ability to implement our
business strategies; our ability to successfully integrate any assets,
liabilities, customers, systems, and management personnel we may acquire into
our operations and our ability to realize related revenue synergies and cost
savings within expected time frames and any goodwill charges related thereto;
our ability to manage loan delinquency rates; increased competitive pressures
among financial services companies; changes in consumer spending, borrowing and
savings habits; the availability of resources to address changes in laws, rules,
or regulations or to respond to regulatory actions; our ability to pay dividends
on our common and preferred stock and interest or principal payments on our
junior subordinated debentures; adverse changes in the securities markets;
inability of key third-party providers to perform their obligations to us;
changes in accounting policies and practices, as may be adopted by the financial
institution regulatory agencies or the Financial Accounting Standards Board
including additional guidance and interpretation on accounting issues and
details of the implementation of new accounting methods; the economic impact of
war or terrorist activities; other economic, competitive, governmental,
regulatory, and technological factors affecting our operations, pricing,
products and services; future legislative changes in the United States
Department of Treasury Troubled Asset Relief Program Capital Purchase
Program; and other risks detailed in Banner’s reports filed with the Securities
and Exchange Commission, including its Annual Report on Form 10-K for the year
ended December 31, 2009. We do not undertake and specifically disclaim any
obligation to revise any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements. These risks could cause our actual results for 2011 and beyond to
differ materially from those expressed in any forward-looking statements by, or
on behalf of, us, and could negatively affect our operating and stock price
performance.
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BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
5
RESULTS OF OPERATIONS
|
Quarters
Ended
|
Twelve Months Ended | |||||||||||||||||
(in
thousands except shares and per share data)
|
Dec
31, 2010
|
Sep 30, 2010 | Dec 31, 2009 |
Dec
31, 2010
|
Dec
31, 2009
|
||||||||||||||
INTEREST
INCOME:
|
|||||||||||||||||||
Loans
receivable
|
$
|
49,390
|
|
$
|
51,162
|
|
$
|
55,013
|
|
$
|
205,784
|
|
$
|
223,035
|
|||||
Mortgage-backed
securities
|
902
|
972
|
1,265
|
4,045
|
6,057
|
||||||||||||||
Securities
and cash equivalents
|
1,936
|
2,116
|
2,030
|
8,253
|
8,278
|
||||||||||||||
52,228
|
54,250
|
58,308
|
218,082
|
237,370
|
|||||||||||||||
INTEREST
EXPENSE:
|
|||||||||||||||||||
Deposits
|
9,521
|
12,301
|
17,663
|
52,320
|
83,211
|
||||||||||||||
Federal
Home Loan Bank advances
|
314
|
323
|
602
|
1,318
|
2,627
|
||||||||||||||
Other
borrowings
|
584
|
604
|
652
|
2,448
|
2,205
|
||||||||||||||
Junior
subordinated debentures
|
1,052
|
1,100
|
1,054
|
4,226
|
4,754
|
||||||||||||||
11,471
|
14,328
|
19,971
|
60,312
|
92,797
|
|||||||||||||||
Net
interest income before provision for loan losses
|
40,757
|
39,922
|
38,337
|
157,770
|
144,573
|
||||||||||||||
PROVISION
FOR LOAN LOSSES
|
20,000
|
20,000
|
17,000
|
70,000
|
109,000
|
||||||||||||||
Net
interest income
|
20,757
|
19,922
|
21,337
|
87,770
|
35,573
|
||||||||||||||
OTHER
OPERATING INCOME:
|
|||||||||||||||||||
Deposit
fees and other service charges
|
5,515
|
5,702
|
5,345
|
22,009
|
21,394
|
||||||||||||||
Mortgage
banking operations
|
2,086
|
2,519
|
1,253
|
6,370
|
8,893
|
||||||||||||||
Loan
servicing fees
|
177
|
146
|
(167
|
) |
951
|
93
|
|||||||||||||
Miscellaneous
|
514
|
919
|
592
|
2,302
|
2,292
|
||||||||||||||
8,292
|
9,286
|
7,023
|
31,632
|
32,672
|
|||||||||||||||
Other-than-temporary
impairment losses
|
-
-
|
(3,000
|
) |
-
-
|
(4,231
|
) |
(1,511
|
) | |||||||||||
Net
change in valuation of financial instruments carried at fair
value
|
(706
|
) |
1,366
|
(1,411)
|
1,747
|
12,529
|
|||||||||||||
Total
other operating income
|
7,586
|
7,652
|
5,612
|
29,148
|
43,690
|
||||||||||||||
OTHER
OPERATING EXPENSE:
|
|||||||||||||||||||
Salary
and employee benefits
|
17,045
|
17,093
|
16,166
|
67,490
|
68,674
|
||||||||||||||
Less
capitalized loan origination costs
|
(2,123
|
) |
(1,731
|
) |
(1,853
|
) |
(7,199
|
) |
(8,863
|
) | |||||||||
Occupancy
and equipment
|
5,501
|
5,546
|
5,699
|
22,232
|
23,396
|
||||||||||||||
Information
/ computer data services
|
1,531
|
1,501
|
1,580
|
6,132
|
6,264
|
||||||||||||||
Payment
and card processing services
|
1,942
|
2,018
|
1,610
|
7,067
|
6,396
|
||||||||||||||
Professional
services
|
1,740
|
1,500
|
2,251
|
6,401
|
6,084
|
||||||||||||||
Advertising
and marketing
|
1,740
|
2,025
|
1,701
|
7,457
|
7,639
|
||||||||||||||
Deposit
insurance
|
1,999
|
2,282
|
2,150
|
8,622
|
9,968
|
||||||||||||||
State/municipal
business and use taxes
|
616
|
630
|
524
|
2,259
|
2,154
|
||||||||||||||
Real
estate operations
|
7,044
|
11,757
|
1,920
|
26,025
|
7,147
|
||||||||||||||
Amortization
of core deposit intangibles
|
600
|
600
|
648
|
2,459
|
2,645
|
||||||||||||||
Miscellaneous
|
3,399
|
3,107
|
2,371
|
11,856
|
10,576
|
||||||||||||||
Total
other operating expense
|
41,034
|
46,328
|
34,767
|
160,801
|
142,080
|
||||||||||||||
Income
(loss) before provision for (benefit from) income taxes
|
(12,691
|
) |
(18,754
|
) |
(7,818
|
) |
(43,883
|
) |
(62,817
|
) | |||||||||
PROVISION
FOR (BENEFIT FROM ) INCOME TAXES
|
-
-
|
23,988
|
(4,276
|
) |
18,013
|
(27,053
|
) | ||||||||||||
NET
INCOME (LOSS)
|
(12,691
|
) |
(42,742
|
) |
(3,542
|
) |
(61,896
|
) |
(35,764
|
) | |||||||||
PREFERRED
STOCK DIVIDEND AND DISCOUNT ACCRETION:
|
|||||||||||||||||||
Preferred
stock dividend
|
1,550
|
1,550
|
1,550
|
6,200
|
6,200
|
||||||||||||||
Preferred
stock discount accretion
|
398
|
398
|
373
|
1,593
|
1,492
|
||||||||||||||
NET
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(14,639
|
)
|
$
|
(44,690
|
)
|
$
|
(5,465
|
)
|
$
|
(69,689
|
)
|
$ |
(43,456
|
) | ||||
Earnings
(loss) per share available to common shareholder
|
|||||||||||||||||||
Basic
|
$
|
(0.13
|
)
|
$ |
(0.40
|
)
|
$
|
(0.27
|
) |
$
|
(1.03
|
)
|
$
|
(2.33
|
) | ||||
Diluted
|
$
|
(0.13
|
)
|
$ |
(0.40
|
)
|
$
|
(0.27
|
)
|
$
|
(1.03
|
)
|
$
|
(2.33
|
) | ||||
Cumulative
dividends declared per common share
|
$
|
0.01
|
|
$
|
0.01
|
|
$
|
0.01
|
|
$
|
0.04
|
|
$
|
0.04
|
|||||
Weighted
average common shares outstanding
|
|||||||||||||||||||
Basic
|
112,059,269
|
110,514,868
|
20,616,861
|
67,654,343
|
18,646,836
|
||||||||||||||
Diluted
|
112,059,269
|
110,514,868
|
20,616,861
|
67,654,343
|
18,646,836
|
||||||||||||||
Common
shares issued in connection with exercise of stock options or
DRIP
|
1,691,572
|
1,252,200
|
1,507,485
|
5,858,920
|
4,387,552
|
(more)
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
6
FINANCIAL CONDITION
|
|||||||||||||
(in
thousands except shares and per share data)
|
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
||||||||||
ASSETS
|
|||||||||||||
Cash
and due from banks
|
$ | 39,756 | $ | 46,146 | $ | 78,364 | |||||||
Federal
funds and interest-bearing deposits
|
321,896 | 441,977 | 244,641 | ||||||||||
Securities
- at fair value
|
95,379 | 101,760 | 147,151 | ||||||||||
Securities
- available for sale
|
200,227 | 153,903 | 95,667 | ||||||||||
Securities
- held to maturity
|
72,087 | 66,929 | 74,834 | ||||||||||
Federal
Home Loan Bank stock
|
37,371 | 37,371 | 37,371 | ||||||||||
Loans
receivable:
|
|||||||||||||
Held
for sale
|
3,492 | 3,545 | 4,497 | ||||||||||
Held
for portfolio
|
3,399,625 | 3,494,557 | 3,785,624 | ||||||||||
Allowance
for loan losses
|
(97,401 | ) | (96,435 | ) | (95,269 | ) | |||||||
3,305,716 | 3,401,667 | 3,694,852 | |||||||||||
Accrued
interest receivable
|
15,927 | 17,866 | 18,998 | ||||||||||
Real
estate owned held for sale, net
|
100,872 | 107,159 | 77,743 | ||||||||||
Property
and equipment, net
|
96,502 | 98,300 | 103,542 | ||||||||||
Other
intangibles, net
|
8,609 | 9,210 | 11,070 | ||||||||||
Bank-owned
life insurance
|
56,653 | 56,141 | 54,596 | ||||||||||
Other
assets
|
55,087 | 58,758 | 83,392 | ||||||||||
$ | 4,406,082 | $ | 4,597,187 | $ | 4,722,221 | ||||||||
LIABILITIES
|
|||||||||||||
Deposits:
|
|||||||||||||
Non-interest-bearing
|
$ | 600,457 | $ | 613,313 | $ | 582,480 | |||||||
Interest-bearing
transaction and savings accounts
|
1,433,248 | 1,459,756 | 1,341,145 | ||||||||||
Interest-bearing
certificates
|
1,557,493 | 1,687,417 | 1,941,925 | ||||||||||
3,591,198 | 3,760,486 | 3,865,550 | |||||||||||
Advances
from Federal Home Loan Bank at fair value
|
43,523 | 46,833 | 189,779 | ||||||||||
Customer
repurchase agreements and other borrowings
|
175,813 | 178,134 | 176,842 | ||||||||||
Junior
subordinated debentures at fair value
|
48,425 | 48,394 | 47,694 | ||||||||||
Accrued
expenses and other liabilities
|
21,048 | 24,624 | 24,020 | ||||||||||
Deferred
compensation
|
14,603 | 13,877 | 13,208 | ||||||||||
3,894,610 | 4,072,348 | 4,317,093 | |||||||||||
STOCKHOLDERS' EQUITY
|
|||||||||||||
Preferred
stock - Series A
|
119,000 | 118,602 | 117,407 | ||||||||||
Common
stock
|
509,457 | 506,418 | 331,538 | ||||||||||
Retained
earnings (accumulated deficit)
|
(115,348 | ) | (99,575 | ) | (42,077 | ) | |||||||
Other
components of stockholders' equity
|
(1,637 | ) | (606 | ) | (1,740 | ) | |||||||
511,472 | 524,839 | 405,128 | |||||||||||
$ | 4,406,082 | $ | 4,597,187 | $ | 4,722,221 | ||||||||
Common
Shares Issued:
|
|||||||||||||
Shares
outstanding at end of period
|
113,153,465 | 111,461,893 | 21,539,590 | ||||||||||
Less
unearned ESOP shares at end of period
|
240,381 | 240,381 | 240,381 | ||||||||||
Shares
outstanding at end of period excluding unearned ESOP
shares
|
112,913,084 | 111,221,512 | 21,299,209 | ||||||||||
Common
stockholders' equity per share (1)
|
$ | 3.48 | $ | 3.65 | $ | 13.51 | |||||||
Common
stockholders' tangible equity per share (1) (2)
|
$ | 3.40 | $ | 3.57 | $ | 12.99 | |||||||
Tangible
common stockholders' equity to tangible assets
|
8.73 | % | 8.65 | % | 5.87 | % | |||||||
Consolidated
Tier 1 leverage capital ratio
|
12.24 | % | 12.12 | % | 9.62 | % | |||||||
(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)
|
-
Tangible common equity excludes preferred stock, goodwill, core deposit
and other intangibles.
|
||||||||||||
(more)
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
7
ADDITIONAL
FINANCIAL INFORMATION
|
||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
Dec
31, 2009
|
|||||||||||||||||
LOANS (including loans held for
sale):
|
||||||||||||||||||||
Commercial
real estate
|
||||||||||||||||||||
Owner
occupied
|
$ | 515,093 | $ | 526,599 | $ | 509,464 | $ | 509,464 | ||||||||||||
Investment
properties
|
550,610 | 534,338 | 573,495 | 573,495 | ||||||||||||||||
Multifamily
real estate
|
134,634 | 150,396 | 153,497 | 153,497 | ||||||||||||||||
Commercial
construction
|
62,707 | 64,555 | 80,236 | 80,236 | ||||||||||||||||
Multifamily
construction
|
27,394 | 48,850 | 57,422 | 57,422 | ||||||||||||||||
One-
to four-family construction
|
153,383 | 174,312 | 239,135 | 239,135 | ||||||||||||||||
Land
and land development
|
||||||||||||||||||||
Residential
|
167,764 | 189,948 | 284,331 | 284,331 | ||||||||||||||||
Commercial
|
32,386 | 24,697 | 43,743 | 43,743 | ||||||||||||||||
Commercial
business
|
585,457 | 596,152 | 637,823 | 637,823 | ||||||||||||||||
Agricultural
business including secured by farmland
|
204,968 | 210,904 | 205,307 | 205,307 | ||||||||||||||||
One-
to four-family real estate
|
682,924 | 681,138 | 703,277 | 703,277 | ||||||||||||||||
Consumer
|
99,761 | 106,922 | 110,937 | 110,937 | ||||||||||||||||
Consumer
secured by one- to four-family real estate
|
186,036 | 189,291 | 191,454 | 191,454 | ||||||||||||||||
Total
loans outstanding
|
$ | 3,403,117 | $ | 3,498,102 | $ | 3,790,121 | $ | 3,790,121 | ||||||||||||
Restructured
loans performing under their restructured terms
|
$ | 57,273 | $ | 46,243 | $ | 43,683 | $ | 43,683 | ||||||||||||
Loans
30 - 89 days past due and on accrual
|
$ | 28,847 | $ | 18,242 | $ | 34,156 | $ | 34,156 | ||||||||||||
Total
delinquent loans (including loans on non-accrual)
|
$ | 180,336 | $ | 188,584 | $ | 248,006 | $ | 248,006 | ||||||||||||
Total
delinquent loans / Total loans
outstanding
|
5.30 | % | 5.39 | % | 6.54 | % | 6.54 | % | ||||||||||||
GEOGRAPHIC CONCENTRATION OF LOANS
AT
|
||||||||||||||||||||
December
31, 2010
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||||||
Commercial
real estate
|
||||||||||||||||||||
Owner
occupied
|
$ | 395,981 | $ | 65,808 | $ | 49,859 | $ | 3,445 | $ | 515,093 | ||||||||||
Investment
properties
|
399,586 | 101,500 | 43,406 | 6,118 | 550,610 | |||||||||||||||
Multifamily
real estate
|
112,526 | 11,665 | 9,926 | 517 | 134,634 | |||||||||||||||
Commercial
construction
|
44,803 | 9,289 | 8,615 | - - | 62,707 | |||||||||||||||
Multifamily
construction
|
19,352 | 8,042 | - - | - - | 27,394 | |||||||||||||||
One-
to four-family construction
|
76,893 | 72,421 | 4,069 | - - | 153,383 | |||||||||||||||
Land
and land development
|
||||||||||||||||||||
Residential
|
87,383 | 67,192 | 13,189 | - - | 167,764 | |||||||||||||||
Commercial
|
27,640 | 1,362 | 3,384 | - - | 32,386 | |||||||||||||||
Commercial
business
|
410,591 | 94,116 | 65,841 | 14,909 | 585,457 | |||||||||||||||
Agricultural
business including secured by farmland
|
97,651 | 45,384 | 61,927 | 6 | 204,968 | |||||||||||||||
One-
to four-family real estate
|
442,309 | 209,092 | 29,155 | 2,368 | 682,924 | |||||||||||||||
Consumer
|
71,013 | 22,797 | 5,951 | - - | 99,761 | |||||||||||||||
Consumer
secured by one- to four-family real estate
|
128,736 | 44,113 | 12,688 | 499 | 186,036 | |||||||||||||||
Total
loans outstanding
|
$ | 2,314,464 | $ | 752,781 | $ | 308,010 | $ | 27,862 | $ | 3,403,117 | ||||||||||
Percent
of total loans
|
68.0 | % | 22.1 | % | 9.1 | % | 0.8 | % | 100.0 | % | ||||||||||
DETAIL OF LAND AND LAND DEVELOPMENT LOANS
AT
|
||||||||||||||||||||
December
31, 2010
|
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
|||||||||||||||
Residential
|
||||||||||||||||||||
Acquisition
& development
|
$ | 43,810 | $ | 39,477 | $ | 5,058 | $ | - - | $ | 88,345 | ||||||||||
Improved
lots
|
27,050 | 20,873 | 1,075 | - - | 48,998 | |||||||||||||||
Unimproved
land
|
16,523 | 6,842 | 7,056 | - - | 30,421 | |||||||||||||||
Total
residential land and development
|
$ | 87,383 | $ | 67,192 | $ | 13,189 | $ | - - | $ | 167,764 | ||||||||||
Commercial
& industrial
|
||||||||||||||||||||
Acquisition
& development
|
$ | 4,855 | $ | - - | $ | 549 | $ | - - | $ | 5,404 | ||||||||||
Improved
land
|
10,546 | - - | - - | - - | 10,546 | |||||||||||||||
Unimproved
land
|
12,239 | 1,362 | 2,835 | - - | 16,436 | |||||||||||||||
Total
commercial land and development
|
$ | 27,640 | $ | 1,362 | $ | 3,384 | $ | - - | $ | 32,386 | ||||||||||
(more)
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
8
ADDITIONAL
FINANCIAL INFORMATION
|
||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Quarters
Ended
|
Twelve Months Ended | |||||||||||||||||||
CHANGE
IN THE
|
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
Dec
31, 2010
|
Dec
31, 2009
|
|||||||||||||||
ALLOWANCE FOR LOAN LOSSES
|
||||||||||||||||||||
Balance,
beginning of period
|
$
|
96,435
|
|
$
|
95,508
|
|
$
|
95,183
|
|
$
|
95,269
|
|
$
|
75,197
|
||||||
Provision
|
20,000
|
20,000
|
17,000
|
70,000
|
109,000
|
|||||||||||||||
Recoveries
of loans previously charged off:
|
||||||||||||||||||||
Commercial
real estate
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
|||||||||||||||
Multifamily
real estate
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
|||||||||||||||
Construction
and land
|
112
|
163
|
98
|
897
|
715
|
|||||||||||||||
One-
to four-family real estate
|
11
|
54
|
26
|
136
|
138
|
|||||||||||||||
Commercial
business
|
776
|
204
|
106
|
2,865
|
545
|
|||||||||||||||
Agricultural
business, including secured by farmland
|
36
|
9
|
10
|
45
|
38
|
|||||||||||||||
Consumer
|
79
|
77
|
60
|
284
|
275
|
|||||||||||||||
1,014
|
507
|
300
|
4,227
|
1,711
|
||||||||||||||||
Loans
charged off:
|
||||||||||||||||||||
Commercial
real estate
|
(1,575
|
) |
(1
|
) |
(1
|
) |
(1,668
|
) |
(1
|
) | ||||||||||
Multifamily
real estate
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
|||||||||||||||
Construction
and land
|
(11,811
|
) |
(11,802
|
) |
(12,302
|
) |
(43,592
|
) |
(64,456
|
) | ||||||||||
One-
to four-family real estate
|
(2,483
|
) |
(1,134
|
) |
(1,500
|
) |
(7,860
|
) |
(8,795
|
) | ||||||||||
Commercial
business
|
(3,211
|
) |
(5,802
|
) |
(2,249
|
) |
(15,244
|
) |
(11,541
|
) | ||||||||||
Agricultural
business, including secured by farmland
|
(460
|
) |
(492
|
) |
(692
|
) |
(1,940
|
) |
(3,877
|
) | ||||||||||
Consumer
|
(508
|
) |
(349
|
) |
(470
|
) |
(1,791
|
) |
(1,969
|
) | ||||||||||
(20,048
|
) |
(19,580
|
) |
(17,214
|
) |
(72,095
|
) |
(90,639
|
) | |||||||||||
Net
charge-offs
|
(19,034
|
) |
(19,073
|
) |
(16,914
|
) |
(67,868
|
) |
(88,928
|
) | ||||||||||
Balance,
end of period
|
$
|
97,401
|
|
$
|
96,435
|
|
$
|
95,269
|
|
$
|
97,401
|
|
$
|
95,269
|
||||||
Net
charge-offs / Average loans outstanding
|
0.55%
|
0.53%
|
0.44%
|
1.88%
|
2.28%
|
|||||||||||||||
ALLOCATION
OF
|
||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES
|
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
Dec
31, 2009
|
||||||||||||||||
Specific
or allocated loss allowance
|
||||||||||||||||||||
Commercial
real estate
|
$
|
11,953
|
|
$
|
6,988
|
|
$
|
8,278
|
|
$
|
8,278
|
|||||||||
Multifamily
real estate
|
3,718
|
3,870
|
90
|
90
|
||||||||||||||||
Construction
and land
|
32,129
|
38,666
|
45,209
|
45,209
|
||||||||||||||||
Commercial
business
|
22,556
|
23,114
|
22,054
|
22,054
|
||||||||||||||||
Agricultural
business, including secured by farmland
|
1,591
|
2,486
|
919
|
919
|
||||||||||||||||
One-
to four-family real estate
|
8,269
|
3,555
|
2,912
|
2,912
|
||||||||||||||||
Consumer
|
2,706
|
1,899
|
1,809
|
1,809
|
||||||||||||||||
Total
allocated
|
82,922
|
80,578
|
81,271
|
81,271
|
||||||||||||||||
Estimated
allowance for undisbursed commitments
|
1,426
|
1,534
|
1,594
|
1,594
|
||||||||||||||||
Unallocated
|
13,053
|
14,323
|
12,404
|
12,404
|
||||||||||||||||
Total
allowance for loan losses
|
$
|
97,401
|
|
$
|
96,435
|
|
$
|
95,269
|
|
$
|
95,269
|
|||||||||
Allowance
for loan losses / Total loans outstanding
|
2.86%
|
2.76%
|
2.51%
|
2.51%
|
||||||||||||||||
Allowance
for loan losses / Non-performing loans
|
64%
|
57%
|
45%
|
45%
|
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
9
ADDITIONAL
FINANCIAL INFORMATION
|
|||||||||||||||||||
(dollars
in thousands)
|
|||||||||||||||||||
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
Dec
31, 2009
|
||||||||||||||||
NON-PERFORMING ASSETS
|
|||||||||||||||||||
Loans
on non-accrual status
|
|||||||||||||||||||
Secured
by real estate:
|
|||||||||||||||||||
Commercial
|
$
|
24,727
|
|
$
|
17,709
|
|
$
|
7,300
|
|
$
|
7,300
|
||||||||
Multifamily
|
1,889
|
1,758
|
383
|
383
|
|||||||||||||||
Construction
and land
|
75,734
|
95,317
|
159,264
|
159,264
|
|||||||||||||||
One-
to four-family
|
16,869
|
17,026
|
14,614
|
14,614
|
|||||||||||||||
Commercial
business
|
21,100
|
24,975
|
21,640
|
21,640
|
|||||||||||||||
Agricultural
business, including secured by farmland
|
5,853
|
6,519
|
6,277
|
6,277
|
|||||||||||||||
Consumer
|
2,332
|
2,531
|
3,923
|
3,923
|
|||||||||||||||
148,504
|
165,835
|
213,401
|
213,401
|
||||||||||||||||
Loans
more than 90 days delinquent, still on accrual
|
|||||||||||||||||||
Secured
by real estate:
|
|||||||||||||||||||
Commercial
|
-
-
|
437
|
-
-
|
-
-
|
|||||||||||||||
Multifamily
|
-
-
|
-
-
|
-
-
|
-
-
|
|||||||||||||||
Construction
and land
|
588
|
1,469
|
-
-
|
-
-
|
|||||||||||||||
One-
to four-family
|
2,367
|
2,089
|
358
|
358
|
|||||||||||||||
Commercial
business
|
-
-
|
350
|
-
-
|
-
-
|
|||||||||||||||
Agricultural
business, including secured by farmland
|
-
-
|
-
-
|
-
-
|
-
-
|
|||||||||||||||
Consumer
|
30
|
162
|
91
|
91
|
|||||||||||||||
2,985
|
4,507
|
449
|
449
|
||||||||||||||||
Total
non-performing loans
|
151,489
|
170,342
|
213,850
|
213,850
|
|||||||||||||||
Securities
on non-accrual
|
1,896
|
500
|
4,232
|
4,232
|
|||||||||||||||
Real
estate owned (REO) and repossessed assets
|
100,945
|
107,314
|
77,802
|
77,802
|
|||||||||||||||
Total
non-performing assets
|
$
|
254,330
|
|
$
|
278,156
|
|
$
|
295,884
|
|
$
|
295,884
|
||||||||
Total
non-performing assets / Total assets
|
5.77%
|
6.05%
|
6.27%
|
6.27%
|
|||||||||||||||
DETAIL
& GEOGRAPHIC CONCENTRATION OF
|
|||||||||||||||||||
NON-PERFORMING ASSETS AT
|
|||||||||||||||||||
December 31, 2010 |
Washington
|
Oregon
|
Idaho
|
Other
|
Total
|
||||||||||||||
Secured
by real estate:
|
|||||||||||||||||||
Commercial
|
$
|
19,595
|
|
$
|
461
|
|
$
|
4,671
|
|
$
|
-
-
|
|
$
|
24,727
|
|||||
Multifamily
|
1,889
|
-
-
|
-
-
|
-
-
|
1,889
|
||||||||||||||
Construction
and land
|
|||||||||||||||||||
One-
to four-family construction
|
9,462
|
5,317
|
1,826
|
-
-
|
16,605
|
||||||||||||||
Commercial
construction
|
1,531
|
-
-
|
-
-
|
-
-
|
1,531
|
||||||||||||||
Multifamily
construction
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
||||||||||||||
Residential
land acquisition & development
|
24,925
|
13,423
|
1,788
|
-
-
|
40,136
|
||||||||||||||
Residential
land improved lots
|
2,813
|
5,414
|
131
|
-
-
|
8,358
|
||||||||||||||
Residential
land unimproved
|
4,841
|
2,100
|
-
-
|
-
-
|
6,941
|
||||||||||||||
Commercial
land acquisition & development
|
-
-
|
-
-
|
-
-
|
-
-
|
-
-
|
||||||||||||||
Commercial
land improved
|
2,455
|
-
-
|
-
-
|
-
-
|
2,455
|
||||||||||||||
Commercial
land unimproved
|
296
|
-
-
|
-
-
|
-
-
|
296
|
||||||||||||||
Total
construction and land
|
46,323
|
26,254
|
3,745
|
-
-
|
76,322
|
||||||||||||||
One-
to four-family
|
12,531
|
5,647
|
1,058
|
-
-
|
19,236
|
||||||||||||||
Commercial
business
|
15,534
|
4,629
|
769
|
168
|
21,100
|
||||||||||||||
Agricultural
business, including secured by farmland
|
600
|
832
|
4,421
|
-
-
|
5,853
|
||||||||||||||
Consumer
|
1,683
|
463
|
216
|
-
-
|
2,362
|
||||||||||||||
Total
non-performing loans
|
98,155
|
38,286
|
14,880
|
168
|
151,489
|
||||||||||||||
Securities
on non-accrual
|
-
-
|
-
-
|
500
|
1,396
|
1,896
|
||||||||||||||
Real
estate owned (REO) and repossessed assets
|
47,326
|
39,346
|
14,273
|
-
-
|
100,945
|
||||||||||||||
Total non-performing
assets at end of the period
|
$
|
145,481
|
|
$
|
77,632
|
|
$
|
29,653
|
|
$
|
1,564
|
|
$
|
254,330
|
|||||
(more)
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
10
ADDITIONAL
FINANCIAL INFORMATION
|
|||||||||||||
(dollars
in thousands)
|
|||||||||||||
Quarters Ended | Twelve Months Ended | ||||||||||||
REAL ESTATE OWNED
|
Dec
31, 2010
|
Dec
31, 2009
|
Dec
31, 2010
|
Dec
31, 2009
|
|||||||||
Balance,
beginning of period
|
$
|
107,159
|
$
|
53,576
|
$
|
77,743
|
$
|
21,782
|
|||||
Additions
from loan foreclosures
|
16,855
|
39,802
|
87,761
|
101,853
|
|||||||||
Additions
from capitalized costs
|
1,650
|
1,712
|
4,006
|
6,064
|
|||||||||
Dispositions
of REO
|
(19,095)
|
(17,094)
|
(51,651)
|
(42,709)
|
|||||||||
Transfers
to property and equipment
|
-
-
|
-
-
|
-
-
|
(7,030)
|
|||||||||
Gain
(loss) on sale of REO
|
(524)
|
(189)
|
(1,891)
|
(574)
|
|||||||||
Valuation
adjustments in the period
|
(5,173)
|
(64)
|
(15,096)
|
(1,643)
|
|||||||||
Balance,
end of period
|
$
|
100,872
|
$
|
77,743
|
$
|
100,872
|
$
|
77,743
|
|||||
Quarters Ended | |||||||||||||
REAL ESTATE OWNED- FIVE COMPARATIVE QUARTERS | Dec 31, 2010 | Sep 30, 2010 | Jun 30, 2010 | Mar 31, 2010 | Dec 31, 2009 | ||||||||
Balance,
beginning of period
|
$
|
107,159
|
$
|
101,485
|
$
|
95,074
|
$
|
77,743
|
$
|
53,576
|
|||
Additions
from loan foreclosures
|
16,855
|
25,694
|
17,885
|
27,327
|
39,802
|
||||||||
Additions
from capitalized costs
|
1,650
|
841
|
380
|
1,136
|
1,712
|
||||||||
Dispositions
of REO
|
(19,095)
|
(12,145)
|
(10,532)
|
(9,879)
|
(17,094)
|
||||||||
Gain
(loss) on sale of REO
|
(524)
|
(133)
|
(498)
|
(737)
|
(189)
|
||||||||
Valuation
adjustments in the period
|
(5,173)
|
(8,583)
|
(824)
|
(516)
|
(64)
|
||||||||
Balance,
end of period
|
$
|
100,872
|
$
|
107,159
|
$
|
101,485
|
$
|
95,074
|
$
|
77,743
|
|||
REAL ESTATE OWNED- BY TYPE AND STATE | Washington | Oregon |
Idaho
|
Total
|
|||||||||
Commercial
real estate
|
$
|
14,127
|
$
|
-
-
|
$
|
-
-
|
$
|
14,127
|
|||||
One-
to four-family construction
|
294
|
2,724
|
-
-
|
3,018
|
|||||||||
Land
development- commercial
|
4,125
|
6,065
|
225
|
10,415
|
|||||||||
Land
development- residential
|
18,544
|
22,286
|
6,905
|
47,735
|
|||||||||
Agricultural
land
|
329
|
-
-
|
1,660
|
1,989
|
|||||||||
One-
to four-family real estate
|
9,834
|
8,271
|
5,483
|
23,588
|
|||||||||
Total
|
$
|
47,253
|
$
|
39,346
|
$
|
14,273
|
$
|
100,872
|
|||||
(more)
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
11
ADDITIONAL
FINANCIAL INFORMATION
|
|||||||||||||
(dollars
in thousands)
|
|||||||||||||
DEPOSITS & OTHER
BORROWINGS
|
|||||||||||||
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
|
||||||||||
DEPOSIT
COMPOSITION
|
|||||||||||||
Non-interest-bearing
|
$
|
600,457
|
$
|
613,313
|
$
|
582,480
|
|
|
|||||
Interest-bearing
checking
|
357,702
|
359,923
|
360,256
|
|
|||||||||
Regular
savings accounts
|
616,512
|
618,144
|
538,765
|
|
|||||||||
Money
market accounts
|
459,034
|
481,689
|
442,124
|
|
|||||||||
Interest-bearing
transaction & savings accounts
|
1,433,248
|
1,459,756
|
1,341,145
|
|
|||||||||
Interest-bearing
certificates
|
1,557,493
|
1,687,417
|
1,941,925
|
|
|||||||||
Total
deposits
|
$
|
3,591,198
|
$
|
3,760,486
|
$
|
3,865,550
|
|
|
|||||
INCLUDED
IN TOTAL DEPOSITS
|
|||||||||||||
Public
transaction accounts
|
$
|
64,482
|
$
|
72,076
|
$
|
78,202
|
|
|
|||||
Public
interest-bearing certificates
|
81,809
|
82,045
|
88,186
|
|
|||||||||
Total
public deposits
|
$
|
146,291
|
$
|
154,121
|
$
|
166,388
|
|
|
|||||
Total
brokered deposits
|
$
|
102,984
|
$
|
144,013
|
$
|
165,016
|
|
|
|||||
INCLUDED
IN OTHER BORROWINGS
|
|||||||||||||
Customer
repurchase agreements / "Sweep accounts"
|
$
|
125,140
|
$
|
128,149
|
$
|
124,330
|
|
|
|||||
GEOGRAPHIC CONCENTRATION OF DEPOSITS
AT
|
|||||||||||||
December
31, 2010
|
Washington
|
Oregon
|
Idaho
|
Total
|
|||||||||
$
|
2,740,981
|
$
|
608,903
|
$
|
241,314
|
$
|
3,591,198
|
||||||
|
|||||||||||||
Minimum
for Capital Adequacy
|
|||||||||||||
REGULATORY CAPITAL RATIOS
AT
|
Actual
|
or "Well Capitalized" | |||||||||||
December
31, 2010
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||
Banner
Corporation-consolidated
|
|||||||||||||
Total
capital to risk-weighted assets
|
$
|
594,411
|
16.88%
|
$
|
281,659
|
8.00%
|
|||||||
Tier
1 capital to risk-weighted assets
|
549,743
|
15.61%
|
140,830
|
4.00%
|
|||||||||
Tier
1 leverage capital to average assets
|
549,743
|
12.24%
|
179,722
|
4.00%
|
|||||||||
Banner
Bank
|
|||||||||||||
Total
capital to risk-weighted assets
|
502,865
|
15.06%
|
333,986
|
10.00%
|
|||||||||
Tier
1 capital to risk-weighted assets
|
460,461
|
13.79%
|
200,392
|
6.00%
|
|||||||||
Tier
1 leverage capital to average assets
|
460,461
|
10.84%
|
212,444
|
5.00%
|
|||||||||
Islanders
Bank
|
|||||||||||||
Total
capital to risk-weighted assets
|
29,428
|
14.46%
|
20,354
|
10.00%
|
|||||||||
Tier
1 capital to risk-weighted assets
|
26,883
|
13.21%
|
12,213
|
6.00%
|
|||||||||
Tier
1 leverage capital to average assets
|
26,883
|
11.25%
|
11,944
|
5.00%
|
(more)
BANR –
Fourth Quarter 2010 Results
January
26, 2011
Page
12
ADDITIONAL
FINANCIAL INFORMATION
|
||||||||||||||
(dollars
in thousands)
|
||||||||||||||
(rates
/ ratios annualized)
|
||||||||||||||
Quarters
Ended
|
Twelve
Months
|
Ended
|
||||||||||||
OPERATING PERFORMANCE
|
Dec
31, 2010
|
Sep
30, 2010
|
Dec
31, 2009
|
Dec
31, 2010
|
Dec
31, 2009
|
|||||||||
Average
loans
|
$
|
3,458,400
|
$
|
3,570,143
|
$
|
3,829,717
|
$
|
3,607,151
|
$
|
3,900,569
|
||||
Average
securities
|
418,647
|
388,711
|
396,346
|
398,297
|
390,966
|
|||||||||
Average
interest earning cash
|
368,194
|
405,377
|
132,408
|
291,968
|
56,420
|
|||||||||
Average
non-interest-earning assets
|
254,242
|
276,261
|
235,007
|
262,888
|
212,126
|
|||||||||
Total
average assets
|
$
|
4,499,483
|
$
|
4,640,492
|
$
|
4,593,478
|
$
|
4,560,304
|
$
|
4,560,081
|
||||
Average
deposits
|
$
|
3,669,442
|
$
|
3,776,198
|
$
|
3,836,327
|
$
|
3,768,748
|
$
|
3,758,156
|
||||
Average
borrowings
|
344,906
|
334,700
|
378,376
|
350,636
|
400,596
|
|||||||||
Average
non-interest-bearing liabilities
|
(38,355)
|
(36,164)
|
(32,296)
|
(37,378)
|
(21,122)
|
|||||||||
Total
average liabilities
|
3,975,993
|
4,074,734
|
4,182,407
|
4,082,006
|
4,137,630
|
|||||||||
Total
average stockholders' equity
|
523,490
|
565,758
|
411,071
|
478,298
|
422,451
|
|||||||||
|
||||||||||||||
Total
average liabilities and equity
|
$
|
4,499,483
|
$
|
4,640,492
|
$
|
4,593,478
|
$
|
4,560,304
|
$
|
4,560,081
|
||||
Interest
rate yield on loans
|
5.67%
|
5.69%
|
5.70%
|
5.70%
|
5.72%
|
|||||||||
Interest
rate yield on securities
|
2.46%
|
2.91%
|
3.22%
|
2.91%
|
3.63%
|
|||||||||
Interest
rate yield on cash
|
0.26%
|
0.24%
|
0.24%
|
0.24%
|
0.24%
|
|||||||||
Interest
rate yield on interest-earning assets
|
4.88%
|
4.93%
|
5.31%
|
5.07%
|
5.46%
|
|||||||||
Interest
rate expense on deposits
|
1.03%
|
1.29%
|
1.83%
|
1.39%
|
2.21%
|
|||||||||
Interest
rate expense on borrowings
|
2.24%
|
2.40%
|
2.42%
|
2.28%
|
2.39%
|
|||||||||
Interest
rate expense on interest-bearing liabilities
|
1.13%
|
1.38%
|
1.88%
|
1.46%
|
2.23%
|
|||||||||
Interest
rate spread
|
3.75%
|
3.55%
|
3.43%
|
3.61%
|
3.23%
|
|||||||||
Net
interest margin
|
3.81%
|
3.63%
|
3.49%
|
3.67%
|
3.33%
|
|||||||||
Other
operating income / Average assets
|
0.67%
|
0.65%
|
0.48%
|
0.64%
|
0.96%
|
|||||||||
Other
operating income EXCLUDING change in valuation of
|
||||||||||||||
financial
instruments carried at fair value / Average assets (1)
|
0.73%
|
0.54%
|
0.61%
|
0.60%
|
0.68%
|
|||||||||
Other
operating expense / Average assets
|
3.62%
|
3.96%
|
3.00%
|
3.53%
|
3.12%
|
|||||||||
Efficiency
ratio (other operating expense / revenue)
|
84.88%
|
97.38%
|
79.11%
|
86.03%
|
75.47%
|
|||||||||
Return
(Loss) on average assets
|
(1.12%)
|
(3.65%)
|
(0.31%)
|
(1.36%)
|
(0.78%)
|
|||||||||
Return
(Loss) on average equity
|
(9.62%)
|
(29.97%)
|
(3.42%)
|
(12.94%)
|
(8.47%)
|
|||||||||
Return
(Loss) on average tangible equity (2)
|
(9.78%)
|
(30.49%)
|
(3.52%)
|
(13.21%)
|
(8.72%)
|
|||||||||
Average
equity / Average assets
|
11.63%
|
12.19%
|
8.95%
|
10.49%
|
9.26%
|
|||||||||
(1)
|
-
Earnings information excluding the fair value adjustments and goodwill
impairment charge (alternately referred to as operating
|
|||||||||||||
income
(loss) from core operations and expenses from core operations) represent
non-GAAP (Generally Accepted
|
||||||||||||||
Accounting
Principles) financial measures.
|
||||||||||||||
(2)
|
-
Average tangible equity excludes goodwill, core deposit and other
intangibles.
|
|||||||||||||
(more)